Why It’s Important to Inspect the Scheme’s Financials Before Purchasing

Buying into a Sectional Title Scheme? Make sure you’re not just looking at the property — take a close look at the Scheme’s financials too.

Here’s why:

• Hidden Risks – A beautiful property can hide serious financial trouble. A Scheme with high arrears or cash flow issues may require special levies down the line.
• Clarity on Levies – Financial statements give insight into whether levies are realistic or if they may soon increase to cover shortfalls.
• Debt Transparency – You’ll see if owners are defaulting, which can affect service delivery and long-term maintenance.
• Maintenance Reserve Fund Health – In terms of the Sectional Titles Schemes Management Act, every Scheme must have a maintenance reserve fund. If it’s underfunded, that’s a red flag.

Before signing an offer to purchase, request the Scheme’s latest audited financials and budget from the seller.

ANGOR can help you understand what to look for.

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