As Sectional Title agents in Cape Town we are concerned at the increasing number of poorly managed blocks and believe from discussions with other principals that this may reflect a national trend.
It is typical in these complexes that owners seldom attend meetings and seem to hold an opinion that someone else will worry about their investment. As a result we are seeing more and more blocks where the managing agents are unmotivated with owners that are disinterested, trustees are reluctant and the Chairperson of Body Corporate is doing a thankless task and is demotivated.
When the rot sets in, a process of events can result in a significant loss of value in the property and in extreme cases owners may find themselves sitting with an investment that has turned into a liability where the only tenant the owner can get fits a high risk profile as more desirable tenants move out the block. The sectional title complex can become one where most professional agents will not ‘touch it with a barge pole’ let alone put up a For Sale board with their company logo on it!
We recently had a seller begging us to list their property in a block where we have decided it is no longer safe or viable to work even after we were offered 10% commission to sell it. We are after all business people and not here to put ourselves at any personal risk in a blocks that is unsafe to work in.
In my opinion, this is virtually always a process that starts with owners who are investors and are detached from the quality of life offered to those living in the complex. Their only concern is short term maximum rental returns and the quality of the tenant is of little interest and often left to an agent. The owner may thus never ever meet the tenant avoiding a hands off approach. Anyone can get a tenant and one that pays well (for a while) but that should never be the sole basis for choosing a tenant.
The other critical issue is not getting involved as the owner in the meetings of the Body Corporate and regarding it as a hassle for someone else. Shared ownership carries a great responsibility and a shared responsibility to each other as owners and in a sound relationship with the managing agents. If owners don’t care, don’t think the managing agents will. They do not own the property and to be frank many know that disinterested owners mean the chances they’ll get booted out are virtually nil!
So if you are the owner of a sectional title property, get involved. Many hands make like work as they say, but above all you will be looking after your best interests. An apartment can be sold for up to 50% more than another in a very similar size complex in the same suburb because of the administration, the ‘books’ and maintenance. Neglect is quickly self-evident. If you are really not interested in the responsibilities that come with a sectional title investment unfortunately it is not only you that will have to accept the consequences.
I am in favour of a Sectional Title Rating System and we encourage other sectional title agents in the Cape Town area to consider participating in such a project. Buyers would be able to benefit from objective opinion on the complex or 'block'. Buyers have a right to know and information on apartment blocks is not always readily available in the marketing process. Objective collective information will help buyers make a sound decision.