Housing in Southern Africa October 2015

News

Financials in sectionals

(as in fixed income earners such as pensioners or those struggling fi- nancially), or they will be resentful of having to pay a large amount upfront. The benefit of a special levy is that only the correct amount needed is collected from the own- ers, and there is no surplus paid in unnecessarily. The last resort is usually to apply for credit, and this solution can actu- ally be the best for the sectional title scheme. The downside to this option however is that there will be inter- est and fees charged to the scheme but this option can also be flexible and put the scheme in a strong ne- gotiating position with the service provider. This option makes a lump sum available and ready to be paid over for services rendered. This system helps fixed income earners budget for a smaller amount added to their levy eachmonth rather than one large lump sum, as in the special levy. Hanekom concludes that a sec- tional title finance company can pro- vide the funding to body corporates who qualify for finance and can step in and help maintain the financial health of a scheme. “The most important criteria that will be checked are the property val- ues and the percentage of non-payers in the scheme. If the checks show that the body corporate does qualify, we offer a finance facility for any even- tuality. It is easy to set up, is flexible and only incur costs when they are used. The facilities can remain in place indefinitely and the managing agent is able to do his job properly, which ultimately is to ensure that the scheme is run efficiently.” ■ registered on the database is that suppliers will only be required to register once when they do business with government, and will not be required to submit physical tax clear- ance and business registration cer- tificates to government departments. Suppliers in rural areas who do not always have access to computers will be assisted through the Thusong Service Centres, Small Enterprise Development Agency (SEDA) offices and the Post Office. ■

Financial problems in sectional title schemes should be dealt with swiftly says Mandi Hanekom of Propell, a sectional title finance company.

B udgeting, planning and cash flow mismatches and unfore- seen repairs often cause fi- nancial problems in sectional title schemes. However, if the managing agent or the trustees have contingency plans in place, there is no need for the sectional title scheme to have any financial difficulties. Hanekom says, “The other op- tions include having a reserve fund in place, raising a special levy or ap- ply for credit. While a reserve fund is useful, there are pros and cons. The owners of the scheme may not agree to pay a higher than necessary levy each month, purely to bolster the T he newly launched Central Supplier Database (CSD) will improve the way suppliers conduct business with government. Speaking at the launch of the CSD at the Industrial Development Zone (IDZ) in East London, in the Eastern Cape, Minister of Finance Nhlanhla Nene said that the database serves as the source of all supplier information for all spheres of government. The purpose of centralising gov- ernment’s supplier database is to

development’s reserve funds. Having a reserve fund does put the scheme in a strong negotiating position with service providers and the ability to draw funds immediately. It also helps the managing agent or the trustees deal with problems swiftly, but there are risks here of misuse and if an owner sells their unit, all the money that the owner paid into the reserve fund is not refunded.” Raising a special levy is another option when there are large projects to be undertaken, but this too, has its problems. According to Hanekom, the collection of the special levy is onerous as many owners either will not have the funds readily available reduce duplication of effort and cost for the supplier and govern- ment, while enabling the electronic procurement process. Suppliers can register on www.csd.gov.za Chief Director: Supply Chain Management ICT in the Office of the Chief Procurement Officer at National Treasury, Schalk Human, said that the CSD is an intervention to reduce the administration burden on business. Among the benefits of being

Database for suppliers

October 2015