Each month, this newsletter will address matters concerning sectional title and/or homeowners associations. As most people now live in some kind of community living scheme, it concerns a large portion of the population, who would love to know more about the issues that face them every day. Please feel free to pass these articles on to your family and friends.
In this issue, the difficult situation of conflict between trustees and between trustees and the managing agent is addressed, and we also share some news from the Jotam camp.
Conflict can be healthy, except when it is between the trustees/directors and the managing agent! In this newsletter, a very uncomfortable and distressing phenomenon is addressed, which is seldom discussed in any forum, but unfortunately lived in the real world, much too often.
The trustees/directors and managing agent need to be a team to successfully manage the scheme. If the relationship deteriorates, it spells trouble and all efforts should be made to address the causes thereof as quickly as possible.
Usually, and unfortunately, the trustees may have a problem with the way the managing agent executes (or not executes!) its duties. In this case, the matter must be taken up with the managing agent and pointed out, and if the breach is not corrected, the managing agent must be placed on terms. If it becomes clear that the managing agent is not cooperating and is negligent in its duties, it may be necessary to consider other options.
It may then be time to consider procuring the services of another managing agent. It is not something to leave for too long as the body corporate can suffer immense damages, and the longer the situation continues, the worse it will get. We have taken over schemes where the management of the scheme had deteriorated to such an extent, that losses could not be recovered, important documentation was not obtainable, important legal requirements were overlooked, levies were insufficient, which caused serious deterioration of buildings and infrastructure, etc. Another serious area of negligence is where arrear levies are not recovered speedily and effectively, which has a serious effect on the cash flow of the scheme. To get such a scheme back on track can cause a lot of hardship for owners.
However, sad to say, there are some other serious reasons for conflict! The legislation, whether directed at directors or trustees, both in sectional title and homeowners associations (HOA), are endeavouring to regulate as well as possible, the moral requirements of these office bearers, to use the powers bestowed on them, to serve the interests, not of themselves, but of those they represent and act for. (Management Rule 8 of the STSMA specifically address this in Sectional Title).
There is sometimes a tragic breakdown of the trust relationship, where trustees who seek control or are self-serving, causes great distress for managing agents. In such cases, the owners will probably not know what is going on and although the legislation requires the managing agent to inform the body corporate (all members together), of serious matters they should know about, to do so will be occupational suicide as it will put them on a collision course with the people who are in control of their continued managerial appointment! Auditors are also in the same position.
The sectional title legislation provides for managing agents to be appointed either by the body corporate (mostly by means of a general meeting), or the trustees. This is necessary from a legislative and sometimes practical perspective but can lead to a very bad outcome for the body corporate and the managing agent.
It is important for members to appoint trustees/directors that have the interest of the body corporate or HOA at heart – above that of their own, but how can they do that if they do not really know the persons being nominated? Most often in real life and politics, it is the person who speaks the most and can impress the meeting, that gets nominated or appointed. Unfortunately, character cannot be judged in that way! One of the most troublesome matters damaging relationships between trustees and the managing agent (if it is a trustworthy agent with integrity!), is the non-payment of levies or the breach of rules by trustees.
Sometimes it is just an innocent oversight by a trustee, that sets the dilemma in motion, for instance, non or late payment of levies being acted on by the managing agent per instructions. Sometimes it is not so innocent. What does a manging agent do if a chairman acts in breach of legislation or rules?
It should be reasonable to expect that a managing agent must point that out (in a VERY tactful way, as offense is taken easily). Should the fact that it is a trustee who accidentally paid his levy late, influence the processes of levy collection agreed upon by die body corporate, the relative legislation, or trustee resolutions, be ignored in the case of a trustee? It should not be the case and in the case of Jotam, the processes are followed without the staff dealing with the collection of levies, even knowing who are trustees and who not. An immediate confrontation on high level may immediately ensue, but more seriously, a sudden resentment towards the managing agent can develop, which will from then on colour the interaction of that trustee with the managing agent (the managing agent often not even being aware of it).
The moral guideline for anyone accepting the position of trustee or director can only be their own character, as rules and laws can only TRY to guide behaviour. To try and help trustees to comply with this aspect of their trust relationship towards those they represent, Jotam had compiled a Code of Ethics for Trustees/Directors, which can be obtained from Jotam.
To try and minimise this human weakness, I believe that a resolution can be included in the agenda and, therefore, the minutes of the Annual General Meeting, that trustees must sign the Code of Ethics and that owners must be informed by the managing agent, should a trustee not uphold the terms of the code, after being made aware of it and within a reasonable time to rectify the situation.
It can even be a requirement that trustees have debit orders in place to prevent accidental non, or late payments, which will put the managing agent in a position where the required processes have to be followed. The unfortunate part is that owners are often unaware of this conflict of interest and may not even know that it played a part in the decision of trustees to suddenly change managing agents, without substantial motivation and rationale behind their decision. They may want to obtain the services of a more ‘reasonable’ managing agent, to the detriment of the body corporate.
To prevent this from happening, a resolution can be taken by the AGM, that the services of the managing agent may only be terminated at a general meeting of owners. This will at least ensure a proper discussion and motivation by trustees, before enacting a difficult reversible decision by trustees, for the wrong reasons!
There is important news at Jotam!
I (Retha) will again be personally involved in the property portfolio management department of Jotam.
Due to some staff turnover, two new, very capable staff members have been appointed and will need assistance in getting to know the ropes at Jotam. For many years I could market Jotam Management Services, partially on the fact that our staff turnover was very low and that we had conscientious staff, who saw their work more as a calling than a job. This is still the case, and this fact has been proven yet again while in the process of losing two senior staff members, within months of each other.
I always knew that the time may come that another firm may notice their exceptional knowledge and competence, and make them offers that they could not refuse! They will both be joining the same firm, which will benefit from their skillset.
However, as this is an amicable parting with my support and blessing, they are both still available when needed, to help with the finalization of issues they were involved in, and where they can provide information on.
I believe the two new portfolio managers will impress our schemes and clients. In both cases, they have skills that they bring to the table, which will enhance their portfolio management functions.
We wish Ansie and Peter well and congratulate them on broadening their experience and advancing their careers. Ansie left us at the end of April and Peter will be leaving towards the end of August.
I am very excited to welcome Jan-Harm Nieuwenhuis and Jaco Kruger, our two new Portfolio Managers. Peter is currently busy with their orientation to the Jotam environment and bringing them up to date with current issues. You may soon have the opportunity to meet them at meetings, which they will attend with me, and otherwise.
The email address will still be firstname.lastname@example.org, which will be monitored and attended to by all three of us, until further notice. Life is never static and we embrace new opportunities and developments and love to see our colleagues get the acknowledgement they deserve!
Retha Malherbe (CEO)
Electricity Costs and How to Save
With new electricity rates kicking in from July, now is the ideal time for consumers to improve their knowledge of how electricity costs work, and how they can save energy – and money.
First, your charges will vary depending on where you live. If you get your power directly from Eskom, which is the case in many rural areas, you will be charged according to a different system than if you get your electricity from a municipality. Each municipality has its own billing system as well.
Second, it’s helpful to understand the incline block tariff (IBT) system. This means that the more electricity you buy in a month, the more you pay. In the case of prepaid customers, it has nothing to do with how much you actually use — the cost is purely based on how much you buy. This means that electricity is one of the rare cases where it’s really not a good idea to buy in bulk.
Franze says this means there are two ways to save electricity:
“The first thing to do is choose appliances with a lower power rating. For example, if you leave a 100W traditional light bulb on for a whole week, which is 168 hours, you’ll use nearly 17 units of electricity. If a unit costs 150c, then it works out to about R25.50 to keep that one light bulb burning for a week. If you change to a 4W LED energy saver bulb, you’ll use just over 0.6 units in the same week, and spend about R1.50. A saving of R24.”
The second way to save is to use each appliance for fewer hours. “Fridges, freezers and alarm systems are the only things in most houses that need to be on all the time,” says Franze. “With everything else, the less you use the more you’ll save. Switching things like TVs and DVD players off at the wall when you’re not using them is one of the easiest ways to save.”
De Meent To Let
Available immediately for the professional person.
3 Bedroom 2 bathroom double-storey unit with garage, lock-up carport and garden covered by an alarm system.
The living area leads to a private garden and patio with undercover braai. Main bedroom-en-suite on the ground floor, remaining bedrooms and bathroom upstairs.
Complex well looked after.
R11 000 negotiable. Phone Minari 072 588 8136
Alto for Sale
Alto is situated centrally to all amenities, including Unitas Hospital, all schools, shopping centres as well as highways.
It is a neat complex in a sought-after area. This top unit has a dining room area adjacent to the semi-open plan kitchen with built-in cupboards.
The spacious lounge area leads to the undercover balcony with a built-in braai. The modern kitchen cupboards are well planned.
The lighting through the unit attributes to the finishes of the unit. The main-en-suite has a shower, basin and toilet, and the guest bathroom has a modern bath, toilet and basin.
Your vehicle will be parked in your lock-up garage at your doorstep. The complex has a walled pool. Security guards at the gate and on patrol forms part of the security system at the complex. Selling price R 1.15 million. Phone Minari 072 588 8136
How to Attract Birds to Your Garden
Now is an excellent time to provide nesting, resting, feeding and breeding sites for birds in your garden.
The best feeding programme for birds is to plant shrubs and trees which offer nature’s menu. Aloes, watsonias, lion’s ear, red-hot pokers and wachendorfias will attract nectar-feeding birds such as the sunbird. Seed-eating birds are attracted to the seed heads of grasses and grains. Plant patches of mixed birdseed and you’ll be fascinated to see the response from local birds.
Established trees will naturally provide a source of shelter and roosting spots for many birds and a garden which is well planted with indigenous trees will attract numerous birds throughout the year. Good roosting sites are provided by the Henkel’s yellowwood, fever tree, karee, sweet thorn or buffalo thorn. Creepers such as the black-eyed Susan can be draped around the branches of trees to provide a secluded nesting site for robins or flycatchers. Grasses, including reeds and bulrushes, are valuable suppliers of nesting material to weavers who suspend their nests from trees.
Mulch and compost:
Leave fallen logs in the garden as these will provide a micro-habitat for various insects, grubs and worms, which will attract insect feeders such as Cape robin-chats, Karoo and olive thrushes as well as African hoopoes. These birds love the dense undergrowth of gardens where they turn over leaves and debris in search of grubs. Dead logs and tree trunks make ideal nesting spots for birds such as barbets and woodpeckers.