The economic crunch in South Africa means many schemes, bodies corporates, share-block companies and homeowners’ associations, are under intense financial pressure, primarily as a result of escalating levy arrears within schemes.
ZDFin, a team comprising of Financial and Property Management experts, have first-hand experience and understanding that that levy arrears are one of the biggest challenges when setting budgets for scheme maintenance and the costs associated with the overall running of a scheme.
“Levies are a function of the scheme’s expenses, the non-collection of levies is detrimental to the effective day-to-day running of a scheme,” says ZDFin managing director, Michael Schaefer. “Rising indebtedness means schemes are often in need of the legal expertise to remedy their cash flow constraints.”
“There are various factors at play. Unfortunately, most scheme executives or trustees don’t have assistance in this regard, which can be counter-productive at best. They certainly aren’t prepared, nor do they necessarily understand, the lengthy delays associated with trying to recover levy arrears through an overloaded and cumbersome legal system.”
“We have seen it in practice,” Schaefer adds, “Buildings imploding due to spiralling levy arrears and in instances where some owners have stopped paying levies altogether. Trustees often feel overwhelmed, unable to find a solution to a problem that cannot be ignored.”
With this in mind, ZDFin has adapted their levy collection offering to include a levy collection without finance product suited to schemes who require aggressive management and assistance in the collection of arrear levies but do not require or prefer not to take the Levy funding option.
ZDFin’s in-house legal team takes over and manage the collection of the Levy Arrears. ZDFin manages both the pre-legal and handed-over collection and uses their practical experience (from working in both Litigation and Property Management) to manage the external panel of attorneys to collect the levy arrears as quickly and as cost-effectively as possible. ZDFin report to the Scheme Trustees/Directors on a monthly basis when they submit legal fees to them for their approval and payment.
This product is suited to Schemes that have reserves in their admin account and are in a position to meet the monthly expenses of the Scheme with funding the legal action or alternatively, where the arrears of a unit within the Scheme exceed the underlying value. In the latter instance Levy Finance should be avoided as taking finance would ultimately result in a debt trap situation where the Scheme ends up repaying the financer huge amounts of money back.
ABOUT ZDFIN – https://zdfin.co.za/
ZDFin is a professional Executive Managing Agent and specialist finance company providing smart solutions for Sectional Title Bodies Corporate, Home Owners’ Associations and Share Block companies. ZDFin has a wealth of practical experience in property and financial management. We understand these challenges and our range of targeted financial products can be tailored to meet the specific needs of each individual scheme. Schaefer was previously a director and shareholder at Trafalgar, the country’s biggest residential property administration company, started by his father over 50 years ago.