Con­cern over ex­ces­sive levies

Business Day - Home Front - - HOMEFRONT -

NO EX­TRAS Th­ese days, es­tate agents ad­vis­ing home buy­ers and buy-to-let in­vestors on prop­erty will of­ten rec­om­mend that they go for gated vil­lages and se­cu­rity com­plexes. The rea­son­ing be­hind this is that, as the crime rate re­mains high in South Africa, se­cu­rity com­plexes are likely to be bet­ter pro­tected than free­stand­ing homes — and will al­most cer­tainly ap­pre­ci­ate in value at a faster rate. “This think­ing is sound,” says Nancy Todd, from Raw­son Prop­erty Group. “How­ever, it has to be pointed out that many prop­erty buy­ers are now re­sist­ing sec­tional ti­tle op­por­tu­ni­ties be­cause the monthly levies ap­pear to be very high and, even more wor­ry­ing, are pos­si­bly not jus­ti­fied.” Todd says that she had come across cases where the own­ers are paying levies of around R1 500 per month on units that com­mand rentals of less than R5 000 a month. This means that a very high pro­por­tion of the land­lord’s in­come is sim­ply never re­ceived.

Todd adds that while it is true that levies of this size usu­ally in­clude the ex­ter­nal main­te­nance of the build­ing and the up­keep of the grounds, all too of­ten they do not in­clude any other worth­while ex­tras.

“In my ex­pe­ri­ence, too-high levies of­ten fol­low on the ap­point­ment of a man­ag­ing agent… What we are find­ing is that a fairly small mi­nor­ity of man­ag­ing agents will go in on what ap­par­ently seems a very low and rea­son­able fee, but will then add numer­ous ex­tras which will make the re­mu­ner­a­tion ex­ces­sive. By way of con­trast, in our ex­pe­ri­ence, good man­ag­ing agents tend to charge higher but tend to be very re­luc­tant to charge ex­tras.

“It is time, there­fore, that body cor­po­rate mem­bers started tak­ing their trustees to task when they agree to ex­ces­sive man­age­ment fees.”

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.