Levies/Debtors Detailed Assessment Levies and Debtors Note to the user This assessment is intended to assist existing and prospective Trustees/Directors/Estate Management/Office bearers/Third Party Managers of Body Corporates/Home Owners Associations/Retirement Villages or Shareblock Schemes (Community Schemes) to identify the existing level of governance, areas of weakness/vulnerability and the risks in these bodies and to offer advice on how to better manage these risks and improve overall governance. This assessment will also assist in helping Trustees/Directors/Estate Management/Office bearers/Third Party Managers in carrying out their fiduciary roles and responsibilities. Levies and Debtors Body Corporate/Complex/Property Name/Home Owners Association Name of Responsible Party/Trustee/Director/Estate Manager: Are levies fair, justifiable, not discriminatory, applied equitably, not increased by more than 10% annually and does the levy increase process following laid the down regulatory and approval process? * Yes - we are very conscious of these issues/aspects Yes - to a large extent Yes to a lesser degree - we have at times been forced to increase levies higher due to circumstances No, not really - we have consistently been unable to not increase levies by more than 10%/we come off an unrealistic low base No - we have been very inconsistent here/been impossible to adhere to these criteria No, not at all - we do not abide to any of these criteria Don't know/Can't establish How affordable are the current levies/contributions for owners/lesssees/shareholders of the Community Scheme? * Easily affordable Affordable - good value for money Manageable Becoming increasingly unaffordable No longer affordable Don't know/Can't establish How well are levy increases accepted? * Very well Some resistance Quite a bit of resistance A lot of resistance Don't know/Can't establish How do levies compare with those of similar Community Schemes? * Well below the average/market Below the average/market In line with the average/very comparable Above the average/market Very much higher than the average/market Don't know/Can't establish How actively are debtors monitored (e.g. checking for arrears/arrears trends, checking for accounts staying within control limits, watching for concentration risk) by the Trustees/Directors/Estate Management/Office Bearers/Developers/Operators and/or the Managing Agents? * We are very weak in monitoring our debtors. Hardly ever/never done. We are quite weak at monitoring our debtors. It is not done regularly enough and we generally only look at it when we have a problem. We are fairly good in monitoring our debtors. We do it quite often and do it fairly well We are very good at monitoring our debtors. This is a key focus of ours and we look carefully at the debtors concentration, trends etc. Our debtors monitoring is excellent. Trustees/Directors/Estate Management/Managing Agents constantly monitor our debtors book and take action very quickly if we see or suspect a problem The Community Scheme is totally reliant on third parties/Lawyers/Collecting Agents/the Managing Agent for this. Don't know/Can't establish Are value added tools if any, being used to help in the collection of levies/outstanding dues/amounts? * Yes - we make use of an integrated accounting/statement/billing package and a wide range of banking tools to assist with collections Yes - but we are totally reliant on systems/processes used by Managing Agents/Third parties Yes, to a degree - but these are not consistently applied or utilised No, not really - systems and tools are in place but there is low usage and adoption Don't know/Can't establish No, not at all - we are totally reliant on old systems/processes and traditional ways of invoicing/collecting amounts Is interest being recovered on late and arrears levies? * Yes Yes but not applied Don't know/Can't establish No, not at all Are the full cost of collecting arrears and outstanding amounts recovered from defaulting debtors e.g. legal costs, associated admin costs etc.? * Yes Yes to some extent No, not at all Don't know/Can't establish Are any incentives being offered to owners or lessees to settle levy payments or contributions early/on time? * Yes Yes but not financial No, not at all Don't know/Can't establish What is the outlook for levies/contributions e.g. ability to implement increases, collectability, level of default, level of bad debts? * Very positive in all respects Good/positive in most respects Mixed - some areas will be worse than others Unfavourable in a number of respects Very poor in all respects No idea/Can't predict Does the Community Scheme have a levy subsidisation scheme or fund in place? * Yes - we pro-actively use this to manage and smooth levy increases for owners Yes - to some degree but we have not always been able to curb/cover the growth in levies No, not really. We tried this but it quickly became impractical due to the realities of our expenditure levels/unpaid/outstanding levies No, not at all/this would just complicate the existing situation we have with our debtors Don't know/Can't establish Never considered/know nothing about this Does the Community Scheme provide relief to owners for the late or non-payment of levies for any specific reason e.g. financial difficulties being experienced, health reasons, unemployment, non-payment of rental by tenants etc? * No, not at all No, very rarely - and only subject to a formal request where a specific repayment plan is provided/in tandem with arrangement with Managing Agents/Collection agents No, not really but very temporary relief is granted to known/long standing owners Yes to some degree - exceptions are made from time to time Yes, fairly often with lasting negative impacts on the Community Scheme Yes, consistently - as a result we have created precedents here resulting in collection complications/major operational problems/cash flow difficulties and even bad debts Don't know/Can't establish How vulnerable is the Community Scheme to the non or delayed payment of levies for whatever reason e.g. high bond costs, high rates and taxes charges, retrenchment levels of owners/tenants, rentability of units by owners, inability of owners/developer to sell units, illegally occupied units, inability to evict tenants, poor reputation of complex, lack of security, poor state of facilities, inability to maintain the assets of the Community Scheme to an acceptable standard etc.? * Not vulnerable at all Some vulnerability Fairly vulnerable - high reliance on current levy flows/levy boycott could cripple us Very vulnerable - we are totally reliant on current levy payments and failure of payment flows could well result in the collapse of the Community Scheme e.g. level of cash resources and balance sheet Don't know/Can't easily establish Do the Trustees/Directors/Estate Management know the state of arrears of owners in respect of bonds and/or municipal/local authority tariffs/utility charges e.g. rates and taxes, electricity/water/gas accounts where applicable? * Yes - fully aware of situation and pressures being faced and potential impact on the payment of levies, and monitor these closely Yes to a large degree - we try and monitor but are only really aware where legal action/delays in the transfer of certain sales is due to these issues Yes to a some extent - we have limited awareness of the situation/are aware that bonds are paid as a priority to levies etc. No, not really - we regularly get surprises/only really hear when summons have been served on owners/services have been suspended or cut off No, not at all. Situation of owners and impact on affordability/payment of levies however remains a big concern Don't know/Can't easily establish Doesn't impact us/not an issue at this stage/utilities all pre-paid Do the Directors/Trustees/Community Scheme/Estate Management/ Developer/ Operator/Managing Agent terminate, restrict access to or reduce the provision of any service (i.e. access to property/gym/facilities, provision of water/electricity/gas) to defaulting owners/tenants of units or sections in contravention of the prevailing law? * No - we are fully compliant with the law, despite the impact No to a large extent - we are largely compliant but have resorted to certain specific actions on occassions Yes - to a small degree as it is the only way we have been able to resolve the non-payment of services by habitual offenders/non-payers/abusers Yes - despite potential legal implications, we actively use this in order to resolve issues of non-payment/arrears Has become the norm for us as we have become desperate and are happy to face the consequences Don't know/Can't establish Has the Community Scheme suffered any major bad debts/the write off of amounts that were irrecoverable? * Yes - a number due to poor levy clearance controls/associated poor admin controls/irrecoverable legal fees Yes - a few related to sales in execution/complicated legal situations Yes - but largely associated with unpaid utilities/amounts due for services and facilities used Don't know/Can't establish No, not really - small amounts due to time delays/admin errors No, not at all Was the loss significant? * Yes - material/big impact Yes - large impact Yes - manageable/low impact Yes - but insignificant impact No - minimal/no impact at all Don't know/Can't establish If you are human, leave this field blank. 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