Millions of rands worth of levies are being paid each year by the owners of the estimated 550 000 sectional title (ST) units existing in South Africa. With the possibility of corruption, trustees must do their homework on their appointed property managers and install the necessary financial checks and balances to protect members' interests, as well as understand how to work and interact with property managers.
This should include the following:
- Trustees must make sure that their property manager and the management company has a solid track record;
- They should not assume that an initial clean bill of financial health can be taken for granted going forward;
- Trustees need to keep control of the body corporate funds;
- The body corporate and not the property manager must hire the accounting firm that does the full annual audit of the books; and
- The trustees must insist that the property manager provide the body corporate with a monthly financial status report, including copies of actual bank statements.
Article on iafrica.com