When the new Sectional Title Management Act came into effect in October 2016, the number of valuers that claim to specialise in sectional title valuations increased considerably as this new market presented a lucrative new opportunity for many valuers.
In part 1 of this blog, we addressed the two funds – reserve fund and administrative fund – as well as how to differentiate between operational expenses vs capital expenditure. This blog focuses on routine maintenance vs preventative maintenance and how these definitions can be quite confusing.
We are often asked for guidance as to when expenses should be allocated to the administrative fund versus the reserve fund. As a result of overlapping areas, it seems to be an area where no-one has definitive answer. To assist bodies corporate and managing agents in allocating expenses to the correct fund, we have compiled some guidelines to help you make sense of it.
For many bodies corporate, this time of year signals AGM season. As managing agents set up annual general meetings (AGM) with trustees and other body corporate members, it is important that all the required documents and figures are ready for this important gathering.
Naturally, price plays a significant part when trustees appoint a valuer but experience and assurance are not always considered in equal measure. The unfortunate reality is that insurance valuations are susceptible to human error as they rely on the valuer’s personal experience and judgement.