The importance of professional property management

What difference will a professional property manager make to your residential community scheme? Annetjie Terblanche, head of property management at Terblanche Properties, explains.

The basics of being a good neighbour

Are you a good neighbour?

 

Living next door to someone doesn’t make you a neighbour.  It makes you an adjacent homeowner.  One of the great opportunities we have in our communities here in Mossel Bay is the chance to build real, meaningful relationships with the people who live closest to us.

While I understand the desire for privacy, I think it’s important we realize that regular, helpful communication with our neighbours makes us both safer and paves a smooth road for difficult conversations we might face with our neighbours in the future.

Small gestures such as a nice note about landscaping, an invitation to a street barbecue, or an “all hands on deck” community improvement project allow us to get to know our neighbours.  This is vital when you consider the people around you are the most likely to spot smoke when your house catches on fire while you’re away, clue you in to suspicious activity, and have the opportunity to share vital local information.

What’s more, if you build a positive base with your neighbours, when the time comes to have a difficult conversation (such as a barking dog, kids running amok, or intrusive lighting issues), you’ll have a buffer of mutual respect and goodwill to draw on.

If your opening conversation with a neighbor is a complaint, you’re setting yourself up for a long, antagonistic relationship.  Who wants to live next to that?

It doesn’t take much to start off the right way.  Consider leaving a nice note in their mailbox, a small “thank you” gift for looking out for the neighbourhood, or some other “olive branch” act that will build rapport. My wife and I were pleasantly surprised when our neighbour brought us a homemade milktart when we had moved into our house in Dana Bay. From that day on we have not complained once about her noisy little dog.

I think a civil community depends upon our connection to our neighbours.  We all benefit when we depend on and trust one another. Mossel Bay will be better place for us to live in because of it.

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Warning: Body corporate without water and lights

Make sure your body corporate keeps its lights on

Trustees and managing agents must ensure that they collect enough money from members to keep the water and lights (and other services) connected.

The Supreme Court of Appeal recently dismissed an appeal brought by a body corporate in Durban against a judgment of the KwaZulu-Natal High Court, which held that a municipality may terminate a ratepayer’s water and electricity services based on an outstanding debt for municipal rates.

The court found in this case that the municipal rates bill was in arrears simply because of the body corporate’s admitted failure to impose levies on its members and collect from them a sufficient amount to enable it to pay the municipal charges (A copy of the judgement can be seen here.) A body corporate has a legal obligation under the Sectional Titles Act to impose levies on its members and to collect them to enable it to pay its expenses.

The SCA held that the Local Government: Municipal Systems Act empowers a municipality to terminate a ratepayer’s water and electricity services to enforce payment of arrear rates.

This judgement has important consequences for bodies corporate. Trustees and managing agents must ensure that levies are raised, imposed and collected from members. Levies are the lifeblood of any sectional title scheme.

Contact Terblanche Properties today for expert assistance and professional management services to ensure that your body corporate keeps its lights and water connected.

Win-win negotiations

Negotiation is about a win-win

In my mind, a successful negotiation is not where one side has pulverized the other. You don’t “win” a negotiation; you get the best possible outcome for your clients while doing the least harm. No one should leave a negotiation angry. After all, you never know when you might have to negotiate with the same people again.  When it comes to negotiating on behalf of Terblanche Total Property Solutions clients, I keep the following in mind:

Set the stage: I like a location that’s quiet, neutral, pleasant, and away from distractions and confusion.  It’s best if everyone turns off their devices, and refrains from calls or texts during negotiations.

Be prepared: I never enter without my homework. It astounds me to see how many estate agents “play it by ear”. I verify any outstanding facts before the negotiation begins. (Later fact-finding can cause a negotiation to bog down!)

Present a united front: As a property professional, I represent clients and have been hired to act on their wishes. At times I may not agree with their position, but I never share that with the other side. If I feel a client’s position is less than optimal, I only discuss it with them in private. Most people are quite reasonable if you provide them with facts.

Leave attitudes at the door: It’s very simple… treat everyone in the negotiation with respect, regardless of personal opinions. If anyone disagrees, disagree with the idea, not the person. Lose your cool and you’ve lost the business.

Watch non-verbal cues and body language: (Sorry, but I can’t reveal all of my secrets here… suffice it to say I take it all in!)

Hold something in reserve: I discuss concessions with my clients before hand and only offer these concessions when we absolutely need to concede something.

I don’t harp about points that don’t matter to my clients: Negotiations should never choke over a minor point.  I like to get agreement on major points such as price and terms and put lesser items aside to return to later. Again, if your only aim is to “win”, minor points could become potential deal breakers.

Never volunteer too much information: Knowledge is power in a negotiation. Telling the other side any information, however insignificant seeming, could weaken my clients’ position. On the other hand, I learn as much about the other side as I can.

If you ever need someone on your side in a real estate negotiation, feel free to contact one of the trained professionals at Terblanche Total Property Solutions.

Read all about it…

The TTPS Newsletter

One cannot open a newspaper anymore without some “expert” giving his two cents on the property market, it seems. Prices are going up, prices are going down, it’s the right time to buy, it’s the wrong time to buy, get in, get out, this area, that area…

It can be quite confusing. To help you make sense of it, our monthly electronic newsletter will provide you with the correct information when you need it. It is short, to the point and will help you to stay abreast of the latest developments in the property market. This is invaluable when you are looking to sell or let your property, or if you are looking to buy or rent property.

We respect your privacy and will never sell, share or disclose your email address. For more information about your privacy, check out our website.

So, if you want to impress people with your property knowledge or take charge of your property affairs, click here to subscribe!

Get professional assistance

If you think hiring a professional is expensive, wait untill you hire an amateur – Red Adair

How to set a body corporate budget

So you own a unit in a sectional title complex and those levies just seem to go up and up? Bearing in mind that petrol prices and interest rates seem to race each other to the top, it is understandable that people will question all their monthly expenses, including levies. This post may clear a few things up for you. It was posted in propertysouthafrica on October 28th, 2007.

“Whether we like it or not running a body corporate is like running a business”, so says Mike Spencer of Platinum Global in Bloemfontein.“Running a company needs proper planning and budgeting. To run a body corporate properly trustees need to plan what they are going to do during the forthcoming year (the year runs from the beginning to the end of the new financial year). What would they like to do (painting, major repairs, waterproofing etc) and do they have enough money in the reserve fund to be able to tackle these projects or will a special levy be necessary?”

Spencer says that In order to finance the normal running of the building and pay for any special projects the trustees need to budget carefully for each and every expense item on a month to month basis.

Why on a month to month basis? Spencer explains: “expenses do not stay the same right through the year. For instance municipal charges are usually increased in line with the local authorities’ budget – July for Bloemfontein for instance. Salaries need to allow for Christmas bonuses and relief workers.

“Most important is to have a realistic reserve fund allowance (usually expressed as so much per unit per month). Ideally trustees should get a rough quotation for undertaking the major repairs and maintenance which will have to be done in the future (after the current year’s budget) but this is often difficult because creating quotations cost a lot of time and effort by contractors and they are very reluctant to provide such quotations when they know that they are not going to be accepted.

“Trustees should estimate the current cost of such repairs and when they are likely to have to be done. By dividing the estimated costs by the number of years until they need to be done each expense will relate back to an amount that needs to be collected in the current year’s reserve. It is a good idea to actually have separately estimated amounts for each item as this makes it more clear to everyone why the reserve needs to be provided. Each item would be budgeted as 1/12th of the amount each month.

“The simplest and easiest way is to use a spreadsheet to calculate your levies. Have a column for each month of the year and a line for each expense. Group expenses by type such as municipal expenses (rates and taxes, water, electricity), maintenance items (maintenance, security, wages etc), and administration costs, (managing agent’s fees, bank charges, newsletter costs, audit fees). Each line should automatically provide an annual total, and each group should have a group total as a check.

“The total of all the expenses will give you the total annual levy. Divide this by 12 to give the monthly levy that must be collected to provide the running expenses for the body corporate.

“The owners, based on their participation quota, will then share this monthly amount. The new levy should be collected from the start of the financial year. It is a good idea for all owners to be invited to the trustees budget meeting so that they fully understand how the levy was calculated and to assist in accepting each budgeted figure. Practice has shown that far fewer complaints about high levies are received if all owners have an opportunity to be involved in the setting of levies.

“Most importantly the levy should never be changed just because the levy “seems too high” or “the increase is above the inflation rate”. Budgeting is a way to ensure that the body corporate is well financed and has money to do the things it needs to do, when it needs to do them, without, as far as possible, having to resort to special levies.”

At Terblanche Thomas Property Solutions we are experts at setting body corporate budgets. We understand how to run it like a business with proper cash flow and expense management, which basically means less worries for you. Leave it to us and we’ll help your investment grow faster than the interest rate or inflation.

Looking at levies

Cash is the life blood of any business, just ask any business owner. Similarly, a body corporate, which is responsible for the management of a sectional title scheme, also needs cash. It gets that cash in the form of levies. Then, like any other business, it pays expenses such as payments to the authorities for taxes and utilities and payments to service providers such as the cleaning company. This is slightly simplistic but it gives you an idea that levies are the lifeblood of a body corporate.

When the budget is done each year, the body corporate needs to make sure that budget makes provision for all the expenses that are necessary to keep the complex in good order and condition. If not, it will directly and negatively affect the value of everybody’s investment. Remember, we are talking about people’s homes, which are often the biggest investment they will ever make. The body corporate will approve such budget and the trustees will pass a resolution to give it legal effect. Thereafter, each owner will be liable for a levy (usually monthly) which is based on his participation quota. This is basically the size of his unit in relation to the total area of the complex.

Levies are not like normal debts. It has to be paid in full and on time so that the expenses of the body corporate can be paid on time. If levy payments are late, it basically means that those who paid on time are subsidising those that did not pay on time. Imagine the bank asks you to help pay your neighbour’s bond – this is similar! If it goes on for while, the body corporate will be unable to pay its expenses such as rates and taxes. The municipality will then be able to come and claim that unpaid amount from all the owners in the complex – even if you paid your levies!

There is much more to this topic and we will touch on it again in future. At Terblanche Thomas Property Solutions we have a strict approach when it comes to levy collections. It is in your interest that everybody pays the right amount on time. We make sure they do. Isn’t it great to have someone look out for you for a change?