Housing in Southern Africa May 2015

Housing

H owever, each entity can work together and concentrate on their own jobs. Collecting levies in a sectional title scheme is often problematic, in that many owners/tenants do not pay on time and some do not pay at all, said Hanekom. If trustees have to try and collect levies on their own, this often leads to friction within the scheme when a neighbour and possible friend becomes the debt collector. Having managing agents do this sort of work is preferable to the trustees doing this themselves, as a detached view on the matter is needed. Managing agents are there to ensure the effi- cient running of the scheme and not get personally involved. Working together When the trustees of a sectional title scheme decide to take on the services of a levy finance managementcompanymanaging agents are often pushed aside, saysMandi Hanekom,Operations Manager of Propell, a finacing solutions company.

of equitable share to municipalities due to the failure of honouring their financial commitments. The Consti- tution permits National Treasury to stop the transfer of funds to any organ of state that commits persistent and material breaches of their financial obligations. However, the DA will submit recommendations to Minister Gordhan to aid the recovery of these funds.Suggestions include that the revenue raised through electricity usage shouldbe ring-fenced for repay- ment to Eskom; and also used for the upgrading and maintenance of elec- tricity infrastructure. Residents who pay their electricity bills shouldnot be penalised because the municipality failed to pay Eskom. Delivery cannot be halted. ■ is to ensure that the day to day run- ning of the scheme is done efficiently and properly. Another major problem encoun- tered is where funds have been mis- appropriated, leaving the scheme in dire financial difficulties. “Using the various options avail- able, such as levy guarantees, arrear funding, a project loan or an overdraft facility helps the managing agent immensely in getting the scheme back on its feet. And, in this way, ensuring that the scheme maintains its financial stability and its property value,” said Sack. ■

However, says Hanekom, if there are people who are not paying their lev- ies, the managing agent sometimes has to call in the services of a levy fi- nancemanagement company to sort out the problemswith collections and the finances of the scheme. Len Sack from Property Manage- ment Services in KwaZulu Natal says that the combination works well where the levy collections are given to a company dedicated to ensuring that the income stream is steady. And that those who do not pay are dealt with accordingly. This leaves the managing agent to do his job, which

An equitable share

M inister of Coop- erative Gover- n a n ce a n d Traditional Affairs (COGTA), Pravin Gordhan, to dis- cus s Na t i ona l Treasury’s equi- table share cut to 60 municipalities who have continu- ously failed to pay their bills.

lend support to these municipali- ties. This will allow the Minister to d i -rect the respective Pro-

vincial COGTA MECs to ensure munici-

palities institute re- covery-plans and lend support by sending technical and financial advi- sors to these strug- gling municipalities. These municipalities owe Eskom R9 billion and Water Boards R3,6 billion respectively. According to Kevin Mileham, Democratic Alliance Shadow Min- ister of Cooperative Governance and Traditional Affairs, the National Treasury announced the withdrawal

The equitable share cut may ad- versely affect the delivery of es- sential services in these troubled municipalities. The DA is of the view that Minister Gordhan should invoke a section 154(1) interven- tion in terms of the Constitution to

May 2015