Body Corporate – valuable pointers

How long does it take to do the accounts?

The Annual General Meeting must be held within 4 months after the end of the financial year, but many body corporates fail to do so and hold their meetings months or even years later. If you own a unit in a building where your AGM is not being held on time – do something about it. It may be holding many evils!

What can be done? Well, firstly talk to the managing agents and ask them why the meeting is not being held on time. Perhaps their accounts are in a mess. Perhaps they have not sent the accounts to the auditors yet and need to be pushed. Perhaps the Chairman is holding things up. Whatever the reason, it must be sorted out.

If you still cannot get it sorted out, start talking to other owners and perhaps other trustees, asking them if they are they finding the same frustrations. Remember, if you are unhappy with the situation and you can get 25% of the owners to sign a request in writing, then the trustees have to call a special general meeting to talk about the problems. If they refuse to do so then those owners are entitled to call the special general meeting themselves.

Well run body corporates create monthly reports of income and expenses which are done every month within 30 days of the month end. These reports should show owings and payments made by owners and what action has been taken against owners who have not paid their levies. It should also show the expenses for the month (for each expense there should be an invoice) and what profit and loss has been made for that month. Good managing agents will have balanced these accounts with the money in the bank and taken off the total cash and levies in advance, deposits, electricity in advance etc. so that the trustees and owners can see exactly how much money is actually useable. Remember this is not spending money but rather the body corporates savings (including the reserves).

Accounting is this way makes it easy to see how healthy the body corporates finances are. Accounts should be kept up to date. If they are, then it should be possible to have the accounts audited quickly. If not, then it could take years to have your accounts audited!

Article by: Mike Spencer of Platinum Global (Bloemfontein)

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