“So if the unit for sale has a PQ of 0,26, for example, the owner will be liable for 26% of the total levy contributions each month. And if the scheme doesn’t have separate electricity or water meters for each unit, that owner will also be responsible for 26% of the total municipal bill for these utilities.
“On the other hand, when it comes to the Annual General Meeting or any other meeting of owners that is called by the trustees, the ‘value’ of that owner’s vote will also be 26% of the total value of votes in the scheme.”
He notes that it is possible for the trustees and developers of Sectional Title schemes to decide to calculate levies and other charges according to a different formula, “but the majority continue to use the PQ schedule calculated when their scheme was built, which is why this is essential information for any prospective buyer – along with the scheme’s most recent audited financial statements, balance sheet and approved budget”.
In keeping with the disclosure requirements set out in the newly implemented Property Practitioners Act, all this documentation should be supplied by the seller or their estate agent, and if it is not, prospective buyers should not hesitate to ask for it, because the information it contains could very well influence their decision to make the purchase or not.
“For this reason, they should also not be satisfied with any excuses about certain information not being available from the trustees or managing agents, or with assurances that they will be provided with everything after they have signed the offer to purchase or taken transfer of the property.
“Indeed, if the information they need is not forthcoming, it should raise serious doubts about how well the scheme is being managed and funded, and about whether they should rather look at other developments.”
Courtesy of Gerhard Kotzé, MD of the RealNet & Private Property