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SECTIONAL TITLE FUNDING [Lending Money] – DO’S AND DON’TS

When Complexes need to do a major overhaul, maybe it is a drainage issue or something massive that is not covered by the insurance, yet you do not have the sufficient cash in the bank to do this, it can be very stressful.

1. TO LEND MONEY

1.1 If this is something that happens to your Complex and you need to lend
money, here are some things to keep in mind:
1.2 Take out a loan where the correct process is being followed.
1.3. Always make sure that [The Community] – this means all the Owners and the
Trustees, give their written authorization and permission.
1.4 Never let Trustee and/or other Owners “bully” you into making a decision
that is not in the best interest of the Complex or [The Community] Owners.
1.5 Never lend funds without properly double checking the Terms and Conditions
of the Loan Documents.

2. SUMMARY

2.1 Always check the Rules and follow the Processes that are in place.
2.2 Do not be ashamed to ask for Advice – and Listen to the plans and ideas that
your fellow Trustees and Residents give you.
2.3 Contact a Professional person to advise you of the best and safest options
available – that suits your circumstances.
2.4 Always make sure that you have the correct, signed Resolution, giving you
permission to borrow money on behalf of the Sectional Title Scheme.

3. DON’T:

Lend money from an Institution or person, that is not registered and not listed
on the Financial Services Board Act

4. DO:

4.1 Your first best option is to obtain permission from all the Owners and Trustees
to implement a monthly Special Levy, if the amount is small enough per unit.
4.2 Always make sure things are open and transparent, with no hidden dealings.

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