Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
Chris Renelce, MD of Renprop, explains that this is because the financial management of a complex will have significant impact on the property’s appreciation potential as well as levy amounts payable, future increases and the potential of special levies being implemented.
Before buying into a sectional title complex or apartment block, buyers should request a copy of the latest audited financials.
“These financials will give you a gauge as to how well the body corporate is doing its job, whether or not the common property will be well looked after and maintained, and will be indicative of how likely the implementation of a special levy will be in the future,” says Renecle.
He explains that the levies paid each month by homeowners in a sectional title complex are used for the maintenance and general upkeep of the property, as well as services such as security and gardening.
“Therefore it is essential to establish in the financial documents that the levies collected each month actually cover the costs of this upkeep and security. Properties situated within a well-maintained, secure complex or apartment block will naturally have a much better appreciation potential, and will therefore be a good investment option for buyers,” Renecle says.