Funding and treasury

In Community Schemes

There are a vast number of community schemes (body corporates and homeowner associations) in South Africa that struggle to operate functionally as a result of levy non-payment by unit owners. This often results in paying unit owners either having to subsidise non-paying unit owners levy amounts via special levies or doing without vital services and maintenance to the common property.

In some cases, the consequences of non-payment of levies are even more severe. This occurs when even necessary expenditure (such as basic utilities and municipal accounts) cannot be paid. In these cases, there is an immediate negative impact on ALL unit owner’s property values, daily living conditions and financial obligations to their community schemes.

What are the benefits of the STS Arrear Levy Funding facility?

Immediate and ongoing access to funding facility

Bespoke facility with no sign up or initiation fees

Fund up to 100% of arrear levies (no discounting applied)

Retain control and management of levy collections

Simple and easy application process

For Body Corporates And Homeowner’s Associations

Community schemes frequently face the challenge of needing to promptly address unforeseen service or project needs without having sufficient funds readily available to do so. The community scheme is then forced to raise a special levy to gain the funds necessary for the service or the project, thereby placing undue financial pressure on unit owners.

STS offers bespoke project funding packages that aim to provide community schemes and their unit owners with the flexibility to choose their funding period and ensure that it can commence with their property maintenance, repairs, improvements and efficient energy-related projects when required without delay.

In Community Schemes

STS specialises in facilitating loan funding to community schemes, offering various lending solutions to clients that have underlying levy debtor problems or require funding for municipal arrears, maintenance and/or capital projects, but whose unit owners cannot immediately raise the necessary upfront cash. Our primary goal is to understand the funding requirements of your unique body corporate (BC) or homeowner’s association (HOA) and provide trustees, directors and/or managing agents with the best possible finance solution.

While many community schemes are efficiently managed and are financially sound, many have levy defaulting unit owners and, as a result, struggle to function operationally, often leading to the general decay of a building and therefore unit value. STS works with its clients to achieve an operationally functional entity without prejudicing the paying owners within the body corporate. The STS team offers its clients specialist skills in both Sectional Title Law and funding structures, which has allowed us to put together unique funding packages for BC’s and HOA’s who require tailor-made solutions. Contact us to discuss a loan for your body corporate or homeowner’s association today!

In Community Schemes

By accessing adequate, flexible and long-term funding facilities, trustees/executive committees can ensure the financial sustainability of their community scheme, whilst arrear levies are being collected. This is a vital component of any sustainable financial management process, which aims to protect the paying unit owners from having to subsidise non-payment of levies, maintain property values for all unit owners and enable the community scheme to assist its arrear levy unit owners to retain their property asset and avoid expensive legal processes and fees. The burden of having to fund expensive legal fees, whilst the community scheme collects its arrear levies, as well as the assurance that funding is available for any unforeseen urgent expenses, is critical to any community scheme. STS aims to assist managing agents, trustees/executive committees in community schemes to adopt the correct financial management processes to ensure the financial security and legislative compliance of these entities.

The requirement for a robust and efficient Credit Control Policy in managing the financial affairs of the community scheme cannot be stressed enough. By adopting, adapting and improving how the community scheme manages its credit control policies, whilst being cognisant of the roles and responsibilities that have been legislatively and contractually imposed upon them, the trustees/executive committees and the managing agent can ensure the financial stability and sustainability of the community scheme. Together with STS, all community schemes can embark on a formidable approach to financial integrity and sustainability.

In Body Corporates

Sectional title bodies corporate are legislatively required to make provision for a reserve fund to cover the costs of future maintenance and repairs. This results in a well-managed and financially sound community scheme often investing significant cash reserves in low yielding cash and call accounts.

STS can assist in maximising the return on additional cash and reserve funds. In partnership with Anchor Capital, we provide community schemes with the opportunity to invest these funds into selected money market and income funds. These are specifically designed, low volatility investment products that attract higher interest rates than typical investment funds. Your capital is preserved while earning higher interest returns.