Navigating hidden levies when living in lifestyle estates.
Category Advice
There's no denying that living within a lifestyle estate complete with security and luxury amenities has more than just a few advantages. However, a communal estate does come with a few costs that are both vital, and sometimes, not always something that comes up when signing the final contract.
We take a closer look at what property experts say is both fair and legal, and possible avenues homeowners can take should they feel they're being overpriced on their levies.
What are levies and what do they cover?
Homeowners living within lifestyle estates have to pay a monthly levy that goes towards the overall maintenance and upkeep of the estate. These levies are meant to cover what is known as "common property" within the estate and comprise amenities such as communal pools, courts, security, and community centres to name a few.
Homeowners are thus required to ensure that each and every cost aspect is taken into account before making a final purchase.
According to Andrew Schaefer, Managing Director of Trafalgar Property Management, monthly levies remain a function of the managing costs and are meant to be fully mapped out within the estate's budget. These are usually tabulated at Annual General Meetings (AGMs) open to all property owners in the estate.
"Costs are linked to services and maintenance, so if you want levies reduced, look at where costs can be reduced," says Schaefer.
How fair are levies?
Depending on the estate, the board of trustees may request that homeowners pay special levies to cover emergency costs or extra work done around the grounds. These costs may cover aspects such as pool repairs or when damaged parts of the grounds require attention. Homeowners may often be reluctant to pay these surplus charges over and above their monthly contributions.
These hidden costs can be frustrating but once special levies are raised, they need to be limited in the future. This is thanks to the Community Schemes Ombud Act 9 of 2011 (CSOSA) which states that all schemes must set up a reserve fund to save up for any emergencies. However, it can take quite some time for some schemes to develop the funds needed which may cause unnecessary financial strain for homeowners.
Taking control of costs
While it's true that the board of trustees can approve and implement special levies without the approval of all homeowners, there are always ways to remain involved and manage what those costs will be.
Homeowners living within lifestyle estates need to keep abreast of all communal issues and attend AGMs so that they can review and add their input to the proposed annual budget and, more importantly, use their vote to have a say in important issues.
"Always insist on obtaining multiple quotes," adds Schaefer. "Choose reputable contractors, and consider installing cameras instead of having security personnel patrol the estate."
What's more, new members of the estate have every right to request that their Property Practitioner grant access to the minutes of AGMs, complex rules, levy statements, and municipal accounts. Having access to these fee structures gives potential homeowners insight into whether or not they can afford to live there.
Conclusion
While it's not possible to negate levies, all homeowners need to practice due diligence and involve themselves in the ongoing affairs of the estate as much as possible. Controlling overall costs by having a say in AGMs and voting alongside homeowners that share your interests is vital.
If you're a potential buyer looking to invest then be sure to always do your homework. The last thing you want is to find yourself in a financial predicament because you haven't factored in all costs involved.
Contact Ikonic Real Estate today
For Real Estate professionals you can trust and rely on for industry-related expertise, contact us below for more information.
If you are looking to live in Silver Lakes Golf and Lifestyle Estate, Silver Stream Estate, Lombardy Estate & Health Spa, The Ridge Estate, Six Fountains Estate, or Willow Acres Estate and surrounding areas then Ikonic Real Estate is your preferred property practitioner to assist you in all aspects of the selling and buying process.
Office Number: 083 452 5599
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Email: martin@ikonic.co.za
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Author: LV Digital