A reader who owns a unit in a sectional title scheme wants to know what his rights are in accessing admin and financial information pertaining to the complex’s rates and taxes payments.
He says he has been advised by the body corporate to contact the managing agent in this regard.
In accordance with the provisions of the Sectional Titles Schemes Management Act, the body corporate is required to maintain an administrative fund that is reasonably sufficient to cover the estimated annual operating costs.
See the reader’s question here.
The regulations to the act state that the trustees are obliged to apply the body corporate’s funds in accordance with budgets approved by members at a general meeting.
The regulations also say that, at a general meeting, one of the agenda items to be considered for approval is the budgets for the administrative and reserve funds for the next financial year.
Accordingly, as the fund deals with the rates and taxes of the scheme and the meeting is required to address the budget for it, the reader should have full knowledge of the scheme’s financial obligations in relation to rates and taxes.
This is assuming meetings are carried out properly.
The rates and taxes paid for the previous financial year should be addressed in the annual financial statements, setting out the precise rather than anticipated expenditure.
Such annual financial statements are generally audited, thus ensuring their correctness.
Another regulation requires a body corporate to keep proper books of accounts that record all income, expenditure, assets and liabilities.
This should also contain all other information necessary to allow members to assess the body corporate’s financial situation.
The financial statements for presentation at the AGM require the recording of any amounts due by the body corporate to its creditors, which include the local municipality.
Even if the information required by the reader should be provided at general meetings, as a member of the body corporate he is entitled to request certain records and documents for his inspection.
Such documents, in accordance with regulation 27, include the budget and financial statements for the current and previous years. The regulations further provide that such a request should be fulfilled within 10 days.
A managing agent means anybody who provides management services to a body corporate for reward, whether monetary or otherwise, including anybody who is employed to render such services.
Such a managing agent is appointed by the body corporate and by special resolution to perform the functions and exercise the powers that would otherwise be performed and exercised by the trustees.
Accordingly, the managing agent is obliged to carry out the duties and obligations of the trustees of the body corporate in accordance with the provisions of the act and its regulations.
One of the duties of the managing agent is to report to the members of the body corporate how the scheme is administered.
This includes a report on the balance of each of the administrative and reserve funds of the body corporate on the date of the report and a reconciliation statement for each fund.
Again, this provides an up to date source of information specifically dealing with those items of concern to the reader.
It is clear that our reader is able to access the information that he requires, whether from the trustees or the managing agent.
As the managing agent steps into the shoes of the trustees to a large degree, he or she is obliged to comply with the same time periods applicable in providing the requested information.
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