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Roofing shouldn’t be a continuous cost

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The cost of current and future maintenance for property is a big slug of levies that owners need to pay.

Roofs are one item that is ongoing and expensive.

When working out the 10-year reserve plan, it is essential to budget well for future repairs.

At the very least you need to allow for the regular maintenance of valley gutters, replacement of flashings and sealing of ridge tiles.

Not only can this be expensive to do but seldom looks good.

We frequently come across body corporates where tiles are not of the quality that they need to be and it is necessary to replace a large percentage of them or even replace a roof completely.

Before contemplating replacing a roof with the same type of tile – and likely having the same problem later – it might be better to look at the alternative roofs that are available, many of which are zero or near zero maintenance.

Our offices were renovated when we bought them in 1987 using a coated steel roof.

Since then our roof maintenance bill has been R0 – yes zero.

If redoing flashings and servicing a single unit roof costs R2 500 per three years we are looking at a reduction of the levy by R70 per month – every month.

If you really have to replace a roof, consider replacing one at a time when really necessary.

The beauty of a coated steel roof is that it actually looks like tiles even to the trained eye.

By using undamaged tiles from a roof that has been replaced to repair other roofs in a complex, it is possible to delay the time when another roof needs to be replaced by years – a real cost saver.

And because it is a very light roof it will not need extra brandering.

Harvey Tiles, for example, come in a variety of colours to match most existing roof tiles.

In the same way it is advisable to replace wooden windows over time with bronze aluminium windows, even double-glazed ones to take away that continual maintenance that wooden windows need.

As windows get replaced the amount of maintenance is reduced, which allows more windows to be replaced until they are all done and there is no more window maintenance.

  • Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.

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Property

Sectional title is communal living . . . you won’t always get your way

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When buying into a sectional title scheme it is important to remember that while you are buying ownership of your flat or townhouse, you are also automatically becoming a member of the body corporate.

The body corporate is essentially all the owners acting together.

At an annual general meeting (AGM), the owners will elect trustees who represent the body corporate and these people are the scheme’s connection to the real world.

While in practice the managing agents will handle much of the day-to-day affairs of the body corporate – paying accounts, buying cleaning materials, handling the sending out of accounts and collection of levies and service fees – this is done under the eye of the trustees.

The trustees can manage the decisions that need to be made between general meetings.

They can, for instance, approve repair work that needs to be done, approve dismissal and hiring of cleaners, approve minor quotations and the like.

They run, through the managing agents, the day-to-day work of your schemes.

For major decisions, they should always refer to all the owners – after all, everyone is an owner of a part of the whole common property and any decisions, other than normal day-to-day decisions, should be made by everyone. 

When calling an AGM or special general meeting (any general meeting other than the AGM), trustees must give proper notice of the meeting and add items that need to be discussed and decided on by all owners.

The agenda should have full disclosure about what is to be discussed and should include any information that is relevant.

So, if the trustees think that it is a good idea to build additional parking bays, then they should motivate for it with reasons why they think it would be a good idea and include how much it is going to cost and how it is going to be funded – does the body corporate already have the money to do the work or will there be need for a special levy?

They should also set out the benefits – for example, will rent be charged for the parking bays and will this cover the cost in the medium or long run?

Each decision should be voted on by the owners.

While the Sectional Titles Act says that voting is done on a participation quota (PQ) basis, in most cases it is for practical reasons done by a show of hands.

The majority decides which way the vote goes.

In reality, there is often a consensus (when just about everyone agrees) but occasionally one or two owners will not agree.

The majority has the say – you may not like it, but you have to live with the decision.

One word of caution though is that decisions have to be logical.

For example, you cannot decide to raise a special levy based on an equal basis – it must be done on a PQ basis.

You cannot, for example, decide not to include an owner living on the ground floor from paying his/her share of a special levy to repair the lift.

If you are really unhappy with a decision made by your body corporate and feel that the decision is unfair or prejudices a particular owner then you can make a complaint to the Community Schemes Ombud Service tribunal which will look at the merits of your complaint.

  • Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.

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Property

Avoid the rent trap

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Owning your own home is very important.

Even though it may seem not so key to some people for now, when you retire you will realise the importance.

Those that plan well should, by the time they retire, have bought their own home and paid it off.

Can you imagine the stress of retiring and having to continue paying rent at the risk – no certainty – of annual rent increases.

It must be hell.

When you are paying rent, you are simply allowing somebody else to pay off an investment property.

By the time they retire, not only will they own an unbonded home of their own but they will own one or more unbonded properties that they let out for an income.

That is the position that you would like to be in.

Buying is more expensive than renting, for now.

To buy you need to pay the levy, rates and taxes and maintain the property instead of just paying rent.

The price of the property is fixed and the bond should be paid off over 20 years – you should pay more to reduce that time.

At the end of that time, your bond falls away and you only pay rent and levy.

Yes, bond rates, and thus your bond payment, can change over time.

We are likely to see a one percent increase in rates over the whole year but on an amount of R500 000, the extra is just R316 per month.

If you have followed my earlier advice, you will already have paid off lots off your bond.

The increase would only be based on the balance owing.

The reality is that your rental is likely to have been R5 000 per month on that place anyway and that with increased inflation the increase could well be 10 percent anyway – i.e. R500 per month and that will happen every year whereas for the owner interest rates that go up are just as likely to go down!

There is no doubt that the person that retires with a fully owned property is sitting in the pound seats.

If nothing else in our example they would have R5 000 a month tax-free extra money to spend compared to “Mr Rental”.

Does it make sense to you to own your own property now?

Should you need advice about buying or selling property, you may contact me via phone number 082 881 4711 or email address mike@platinumglobal.co.za

  •  Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.

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Property

You buy what you see

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Buyers are not always experienced and should therefore rely on their estate agent to guide them through the process.

It is however important that the buyer understands that they are buying what they see.

A previously owned house, like a second-hand car, will seldom be perfect and will have a few years of use, wear and tear on its clock.

Buyers must understand that they are buying a second-hand house and not a new one.

New houses come with an expectation that the builder is responsible for the first three months after moving in for minor repairs like loose tiles, cupboard handles and sticking sliding door.

For the first year they are responsible for roof leaks and for five years for major problems such as cracking foundations and badly designed or constructed roof structure.

This is not the case for resale houses.

The seller’s obligation is to tell the buyer about any serious faults that the buyer may not see easily.

They do not have to point out, for instance, that you have to wiggle the toilet handle to make it work, but would have to let you know about dampness on the wall behind the bookshelf or the garage door motor that sticks if it rains.

Other than that, it is up to the buyer to look at the property that he is buying and decide that he is happy to buy it with the minor faults that come with any property that you buy.

If there is something that you think needs to be fixed, that’s fine.

Just add it as a special condition in your offer.

An example might be “subject to the seller replacing the cracked window pane on the lounge window”.

The seller can then decide to accept the offer with this condition or not and if he/she does then they must arrange for the window pane to be replaced, the frame around the pane to be repainted, etc.

This would be done at his cost and not the buyer’s.

You cannot expect the seller to fix problems that appear when you move in.

It is not the seller’s responsibility to fix toilets that are not flushing, taps that are dripping, doors that leak when it rains hard from a particular direction or the like.

Everyone who moves into a property expects to spend the day doing small repairs and washing walls.

So, take time to look carefully at the property you want to make an offer on.

Either put in those items that you want the seller to fix into the contract as a special condition or adjust your price down a bit to allow you to do those repairs yourself.

The seller is not obliged to accept your special conditions and could reject them or adjust the price upwards to cover the cost of these repairs.

The more complicated you make your offer the less likely you are to have your offer accepted or for the seller to accept a competitive offer.

Often it is easier just to arrange to do those odd jobs yourself.

  • Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.

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