 Well, this evening we're looking at the basics of community scheme living. We're still getting inundated with questions when it comes to community scheme living, how it's different from what we conventionally know, and also just what we need to bear in mind when we live in community schemes, and especially as more and more of us choose the community scheme life due to different factors, and of course security being a very big one, and really getting a good understanding of what we need to be aware of, mistakes we need to avoid, and what some of the potential implications of even the new property practitioners act has in how we live in community schemes. And to help us make sense of community scheme living, somebody who needs no introduction on the private property park cast is Zelenda Fanamarva, who is the co-founder and director at TVDM. Zelenda, good evening, and thank you so much for joining us on the show. Hi, ladies, I'm so lovely to be part of this again. Thank you very much for the invitation, and hello to all of your listeners this evening. Zelenda, it's always such a pleasure to have you join us. And of course, talking one of your favorite topics, I think if anything, you're one of those people who really does make making understanding community scheme living better, more accessible, and certainly puts us at ease because it can be very intimidating. There are so many different implications and legal implications when it comes to community scheme life. So it isn't just a, I have my property, I bought it, I have my rights, I can do whatever I want to do, which is an attitude many people tend to want to take, but unfortunately that isn't quite how it works, correct? Hundred percent correct. You know, you hit the nail on the head there when I have been dealing with clients lately, and I don't know if it's because of COVID and people may be spending a bit more time at home, or they're a little bit more vested in their interest in a community scheme. But that very issue of its mind, don't tell me what to do, is most certainly a lot more prevalent. It's reaches from, you know, noise disturbances in community schemes because more people are at home, perhaps the kids are at home and doing homeschooling, more people are working from home and not needing a bit more quiet when it comes to meetings being held remotely on Zoom or Microsoft Teams, and suddenly every single little noise around you, which never became, was a problem before suddenly becoming an issue, or, you know, the issues of maintenance not being undertaken in the scheme that you would normally not see if you were simply leaving in the morning and coming back in the evening, loss of tenants in community schemes is making investor owners a lot more wary of what is going on in the management of these schemes to ensure that, you know, levies don't go up and special levies don't be raised. I was recently approached by body corporates that has an owner that is requesting a 50% levy reduction because of her personal circumstances. And one has to remind body corporates that they're not businesses and they don't have various source of incomes. The levy contributions that are payable by every single owner is the only source of income. And if you are going to allow one owner to have a 50% levy reduction because of what is happening in their personal circumstances, you're going to have to allow everybody to do that. And the body corporate is very soon not going to be able to meet its expenses that, as you know, is constantly arising. So, you know, the situation that we're in currently is most certainly shedding a light on a lot more issues, new issues, and issues that weren't necessarily problems before, which is not necessarily a bad thing, but most certainly is necessitating us going back to the basics. So it's a very good topic this evening. Thank you. And you know, Zalinda, I think talking about how much of a great topic this is, something that's very clear, and you actually touched on it as you were talking. And I wanted to spend a little bit of time on it is around the maintenance of, you know, the body corporate or certainly the maintenance of the complex of the state that you're living in, and as an owner, not being happy with how the premises are being maintained and wanting to, you know, take to task perhaps the trustees or the managing agent. I want to split this question because I've been getting inundated, you know, with this specific question, especially during COVID, we saw in the early days that, of course, you know, some maintenance was an issue because of heart lockdown, you had to kind of arrange who's coming in, who's not coming in, but gone are those days. And so we don't have an excuse of certain kinds of work not being done because, you know, of COVID or the restrictions that we have. So my first question actually has to do with the inadequate running of a community scheme. And I make particular reference to if services weren't being paid for. I mean, we saw in social media in the past few weeks, city of Tuane and even, you know, city of Johannesburg closing down, you know, electrical or even water supply in certain buildings and even, you know, complexes where they'd say, you know, services weren't being paid for. And yet you as an owner were paying for your levies and owners who listically were paying for the levies and presumably HEM was being held annually. And, you know, you're getting a report only to find that you're now having a report that's being plucked up on the gate saying that actually this complex is X million hundreds of thousand rands in arrears because they weren't paying the city. In the event that owners are, you know, come to the complex or the estate, they see that what kind of root cause do they have? Because I'm seeing quite a number of those scenarios popping up. And owners don't know what to do because we know that if the city, you know, decides to block any kinds of services where you stay, you as an individual owner who's been paying on time and even holistically as a complex or estate, you've been paying. So it's not an issue of failure to collect levies, right? Levies are being adequately collected. It's the failure on the managing agent's part to play their role in making sure that services are being adequately paid for. Take us through what the trustees or certainly the members of the body corporate, what kind of recourse they would have in situations like that. So you touched on a very important point there about the managing agent not doing what they're supposed to be doing. And I think this is a concept that comes up very often. I'm a member of a group on Facebook called sectional title living in South Africa. And there's almost 11,000 members to that group. And it's all owners and trustees and tenants and attorneys and managing agents and all sorts, you know, people that are really relevant in the industry. And, you know, this concept of the managing agent, it can do this or that or the trustees didn't do this or that, you know, anybody that lives in a body corporate or homeowner's association or any form of community scheme for that matter needs to remember that when something like this happens, it's not, it doesn't come down to the managing agent or to the trustees, it comes down to them as members. There's actually very little in terms of the sectional title schemes management activity focus on sectional title schemes for a second that is actually in the hands of the trustees decisions in regard to maintenance, the tenure maintenance repair and replacement plan, the reserve fund, the administrator fund, raising of special needs, well, not necessarily special needs, but we'll touch on that. It rests in the hands of the owners, you know, the trustees are responsible to put together the budget with the assistance of the managing agents. They're responsible to contract a relevant contractor if they can't do it themselves to prepare a tenure maintenance repair and replacement plan. And in my experience, it is better for a specialist to do that. I mean, you've got companies like Merphin and THC in the industry that are really well known and very professional when it comes to those types of things. So it is better for that to be outsourced. But ultimately, although these documents are prepared on the instructions of the trustees with the assistance of the managing agent, not on the instructions of the managing agent or the decision of the managing agent, they are presented to the members. And the members have the responsibility to consider the year past in terms of the audited annual financial statements. And they need to look at its in lights of the year going forward in terms of the estimate of income and expenditure of the budget. They need to look at that budget from both the administrative points of view for operational expenses and the reserve fund point of view in terms of the maintenance repair and replacement plan. If that isn't adequate, they need to give instruction to the trustees who in turn with the assistance of the managing agent will go back to the drawing board to ensure that there's adequate funding. Now, you use the example of a scheme that's levies are being paid. There aren't any, you know, naughty owners on paying their levies. That's a fantastic scenario. And unfortunately, it doesn't happen very often. But if that is the case and you're still not meeting your expenses, then you're going to have to look at either levy increases, which is why it's so dangerous in a sectional title scheme or any community scheme for that matter, to not raise at least a minimum levy increase on an annual basis because everything goes up. There's nothing in the world that doesn't go up. Unfortunately, the budget is always increasing. Therefore, the levies need to increase. No levy holidays or levy discount should be given in that regard. If a levy increase is not possible or a levy increase has already been raised and it's still not sufficient, you know, the body corporates by trustee resolution needs to look at raising a special levy. If the trustees don't feel comfortable in doing that, they should approach the members, at least for an ordinary resolution for that to happen. You have to look at the governance documents of any other type of community scheme, for example, a homeowner's association, to see whether or not such a special levy can be raised in sectional title, it's relatively easy. And if that is still not adequate, you have to look at other sources of funding, you know, companies like ZDFIN or StratoFIN, both of which you've had on your show before, and I'm sure it'll be a nice opportunity to get them back again, will be able to loan the body corporate monies. The level of resolution has also come down dramatically in sectional title from the sectional title schemes management act, because the reality is that living in a body corporate or community scheme is very expensive. Now, when it comes to the services that are not being provided, the only entity that can disconnect services is your local authority. And if those bills are not being paid, you know, you need to look at the reason for it, is it because the body corporate doesn't have the funds for it? And that's one of the first things that should be included in the budget and paid. Is it because the trustees weren't keeping track of the expenses? Is it because it was underestimated and then suddenly you got a lack of a bull that you should have made provision for? You know, there's situations where the trustees aren't able to make these decisions or present this information to the owners because the information is not being provided to them by their managing agents. You know, that's when the managing agents are being a bit naughty and need to give their trustees this type of information and involve the owners and transparency is key. You need to involve the owners from the first moment you have a problem and not only when they're arriving home to see a notice that they're suddenly not going to have service delivery. And at the end of the day when it reaches that point, you know, the recourse available to them is not to say, trustees, what happened here or managing agent, it's your fault. It's to immediately gather together to see how those bills can be paid and then deal with the repercussions of it afterwards. But it's a very scary situation. It's a very good example to raise. And I think talking off that scary situation, I see we've got questions and comments coming through relating just to this. Remember, you can send them on our Facebook page as you are watching. Also share the love with friends and family on your Facebook page. And to go to those comments, I can see Polina Nkosi checking in watching Lindy Chabela also checking in and watching Michael Addison saying Zalinda is brilliant. Of course, she is and Mike somebody who we have on the show in a very regular basis tuning in there. And we've got a question here coming through from Mallory Panther who says I belong to a board of corporate sectional title scheme. Most tenants pay but the managing agent is very incompetent. What can we do there? So the issue of dealing with an incompetent managing agent Zalinda, I think it's one that comes up in different shapes and forms. And oftentimes, even the trustees themselves don't quite know how they can fire a managing agent and what the process is. They'll tell you that they've tried to fire them before, but there's always an issue or they sometimes don't want to hand over, you know, their documents or whatever relinquishing the power essentially, they don't want to do so. So what would be, you know, the most efficient way to get rid of an inefficient managing agent? I always cringe when I read comments or receive comments about incompetent managing agents or inefficient managing agents. I mean, Zama, you know that I used to be a managing agent myself and that's how I started my career. And I would never give that time back for the world because now I can actually understand the practical realities behind the black and white of the legislation. And it's not as simple as what the legislation sometimes says. One also has to remember that a managing agent doesn't only manage one scheme with one owner. It's hundreds of owners and, you know, multiple schemes, you know, different types of community schemes. I'm not giving excuses or making excuses at all, but the managing agent is a contractor and the managing agent acts on instructions and the managing agent gives advice. I always used to say to my colleagues as managing agents when they go to meetings and they give advice and the trustees ignore that advice or the owners ignore that advice to make sure that they put it in writing, to put it in the minutes, to send an email. And very often when the trustees or the members have to approve those minutes, they conveniently take out what the managing agent has said because who are they to be included in the minutes? They're simply a contractor. I remember myself as a managing agent, how often my advice was shoved under the rug because who was I just a managing agent? But that being said, it is a reality that there are not perfect managing agents out there. And I don't believe that anybody is a perfect person. Need to learn a perfect managing agent, but they are most suit, they are most certainly suitable managing agents suitable to a scheme. And that's the first question. And I know your question was about the termination of it and we'll touch on that. But when a managing agent is appointed for the scheme, very often the trustees and the owners look at what is the lowest fee that they possibly can obtain? What is the least amount of services that can possibly be offered? And that's not necessarily the right way to get the right managing agent or right portfolio manager for your scheme. So that's something to take into consideration. If the relationship has failed, that we always talk about irreconcilable differences like a divorce and you need to terminate the managing agent, you first have to look at the contract. If there is no contract in place, which is very often the case, scary you so, you have to look at the provisions of contract law. And of course, you look at the sectional title schemes management act in sectional title, you look at the constitution or the memorandum of incorporation in the HOA. And of course, you have to look at sometimes the title deed restrictions because some managing agents when they're appointed by the developer, they're actually bound to that association in perpetuity. So that's also very important point to look at. But if we look at the simple route of there being a contract, then in terms of the sectional title provision or position rather, a managing agent contracts can be terminated simply on a trustee resolution provided that determination period that is set out in the act is followed. So if there's a breach clause to follow that, give notification, give an opportunity to rectify a breach alternatively terminate with a notice period, whatever that might be, normally a month or two months, sometimes three months. And then of course, if the trustees aren't able to make that decision, or if the members wish to direct the trustees to make that decision, a simple ordinary resolution taken at an annual general meeting or a special general meeting is required bearing in mind that an ordinary resolution cannot be taken in writing, it actually has to happen at a meeting. And then if there is no contract or if the contracts, if the trustees or owners are wishing to terminate the contract, not in terms of its terms, then you would need a special resolution of the members, which is a 75% vote at a special general meeting or at a general meeting called for a special business or including special business. And then the managing agent requires a two month notice period in the same way the managing agent can also give notice to the community scheme. It's not very often that you hear about a managing agent giving notice to a scheme and when you do hear about it, then you immediately ask the question of oh no, what did the community scheme do? Because a managing agent is just generally tuned into take quite a bit of abuse. And when it gets really bad, then they'll give notice. But that's the process of terminating a managing agent when you believe that there is no other option available to you. You've mentioned the records of the scheme. So in terms of the sectional title schemes management act within 10 days of the termination, the managing agent has to provide the records to the body corporates. If they do not do so, an application can be brought to the community schemes on the service for an order that those records need to be handed over. And really because the industry is so small, it's never advisable for a managing agent to do that rather have a nice clean break. And very often when that's the case, you'll find in a couple of years that that community scheme will actually come back to you when they find out the grass is not necessarily greener on the other side. And that's exactly where we're going to leave it this evening. So Linda, thank you so much for joining us on the show. Thank you, Zama. Thank you for the opportunity. And that is Zalinda Panamadva, who's a co-founder and director at TVDM Consultants, wrapping up the Thursday edition of the Private Property Podcast with myself, Zaman Dunwoa Khumaalom. Well, we'll be back on your screens tomorrow evening at 7 p.m. It's a Thursday. You can look forward to Malino on the farming podcast at 8 p.m. Until then, from us and the team, hoping you're staying home and staying safe.