The past couple months have been frustrating. Our new MA is 3 months in and already ruffling feathers – of the wrong kind. Our defaulters on levies owe a ridiculous amount. A small group owing over 3 years of levies each. Now it has to be said that allowing defaulters to get to the point of 3 years of non-payment boggles the mind and gives an indication as to the previous trustee’s priorities. A basic function of Trusteeship is to safeguard finances of the complex, one of which is to actively seek to bring defaulters to book and pay their due so that the budget can be properly serviced. For defaulters to get to such a point of debt tells a story. And what a story!
Our recently appointed MA adopts a strategy of using CSOS(sectional title onbudsman) to go after defaulters. As far as we know, remember we are the new kids on the block, this is the first time in a looooog time that someone is taking serious action. A CSOS judgment has the same authority as a court judgment. The trick is to understand the CSOS process to bring the defaulter to book – and our MA is aces! Over the past 3 months, they had recovered over R700k in debt! For your information, going the traditional route – debt recovery lawyers, is a frustratingly long approach with mostly ineffective recovery and a ridiculously crazy fee slapped on – 40% of the amount recovered is quite normal! CSOS is free….!
Our owner enters the picture around the time he is sent a communication to address his outstanding debt. All hell breaks loose. Instead of making the effort to settle a debt which any normal citizen and sectional title member should do, this owner goes on the offensive in more ways than one! He attends trustee meetings and accuses trustees of being negligent and not performing their duties – absolutely no substance to these claims. Bombards the MA and cc’s us on email almost daily demanding all sorts of information on finances, supplier contracts, how suppliers are appointed, and why payments are made. Joins a WhatsApp group and actively slanders trustees and calls for an SGM to have us voted out. What is really curious is the quotes from specific sections of the sectional title act being used in correspondence. The method of looking for dirt and quoting chapter and verse from the Sectional Title Act shows a suspicious amount of industry knowledge. Trustees themselves don’t know the Sectional Title Act to such a degree and are dependent on their MA to guide them as industry experts. It’s almost as if this owner is being guided on where to look. This owner looks for any excuse to annoy us and keep the MA busy having to answer questions every owner has the right to have addressed. Lodges 2 complaints at CSOS – again no substance to complaints. The amount of energy and effort put in on this campaign and efforts to have us removed make no sense. At the end of the day, any reasonable owner in sectional title knows that you have to pay the debt ie levies – it’s inevitable. If pursued with diligence, debtors eventually have to pay.
Then the penny drops. At a sister complex, our former MA, in an act of desperation, tries to convince owners there at an SGM called for their removal, that their removal from our complex was a mistake, an SGM was being called at our complex, we would be voted out and this MA would be re-instated! The chairman at the sister complex presented as part of the case to remove this MA, our high court judgment which stated their gross negligence in financial management. This is exactly around the time that on this owner’s Whatsapp group, it is announced that the numbers have been reached to call an SGM. The implications here are stupendous!
As a background to this, our current MA finds out from the CSOS application that the case cannot be heard against this owner as there was an application to the courts for a claim against this owner. The rules are that you cannot seek relief from CSOS and the courts. It’s either one or the other. They further find out that the MA in charge at the time(our former MA) made basic procedural errors when bringing this owner to book. The normal procedure is to issue timeous invoices and statements to an owner, send reminders in prescribed times for outstanding debt, apply interest and penalties according to law and when handing it over to a debt collection agency, present this evidence so that the courts can see the due process was followed. This former MA does not provide this information and the case is thrown out of court!
A reminder here is that this owner has not paid levies for over 3 years – I would argue that this is too….convenient. Would this scenario be too far-fetched? NOTE – this is just conjecture and solid proof would need to be obtained to qualify the following : A corrupt MA enters into an agreement with a defaulter. At a certain point, paying outstanding debt is far more than entering into an ‘arrangement’. Basically, compensate the MA in exchange for not having to pay a significant amount in debt? This would, however, fall apart if, at this time, the MA is removed and therefore cannot keep to this arrangement and ‘protect’ this owner from the pursuance of debt until prescription applies. Lo and behold, once our current MA applies to court for an urgent application(the next step), this owner applies for the prescription of his debt. So – working with the former MA to have us removed would very much be to both parties’ advantage. Having us removed would buy this owner time for the prescription to apply and possibly bury the questions around why this owner was never pursued for recovery of debt in the 3 years of owing. Lord knows what this owner was promised in return for spending the time and energy in riling up and canvassing owners in our complex to have us removed. Finding out why the former MA did not follow the procedure would also raise uncomfortable questions. Better to have us removed. This would also enable the former MA to resume ‘business’ as before. Win-win.
Too far-fetched? I would be willing to bet good money on the above scenario having a significant element of truth to it. What is scary here is that if any part of the above conjecture is true, it would certainly not be an isolated incident. Any trustee or owner reading this – beware!