June 2007
News Bulletin –4/2007
NEW CREDIT ACT
One of our Free State members sent us the following e-mail. We would like to thank him for this input.
What is your experience in this regard?
Let us know by e-mail (namasa@mweb.co.za) and also your view on what Nama should do to address this problem.
E-MAIL FROM THE MEMBER
“With the new Credit Act coming into play on 1st July 2007 there seem to have been some changes.
As Managing Agents of a number of Body Corporate Schemes we are involved in the issuing of Levy and Insurance Certificates. Now we have found that the transferring attorneys are requesting a "Solvency Certificate" to be signed for submission to the banks (particularly ABSA) prior to them allowing the registration of the bond to take place.
We have attached a copy of such a certificate, which we have been asked to provide to one of the local transferring attorneys.
While we understand why the banks are doing this, and we fully support the reasoning behind it, with all due respect we feel that the Chairman of the Body Corporate is not in a position to make such a declaration as many of them do not have any accounting experience. We feel that to ask the Chairman to sign such a document under oath defeats the object of the exercise as although they may be presented with a bank statement with a positive bank balance from the Managing Agents and they may think that the Body Corporate is solvent, this would not show them what liabilities there are and in fact the Body Corporate could be insolvent unknown to the Chairman who has no accounting background.
We feel that if a Solvency Certificate is required the only person qualified and able to issue this is the auditor of the Body Corporate. It should be understood that this will involve the auditor doing a "mini audit" to produce a balance sheet at the time of the certificate being valid and there will be a cost (and time) involved.
Our Auditor will have no problem with the Body Corporates which we manage, but some of the other Managing Agents do not even post their own books and are not in a position to give you a month to month statement of any levy account, let alone know whether the body corporate is solvent or not!
Point 2 of this "Solvency Certificate" asks the Chairman, under oath, to swear that there are no interdicts in any Deeds Registry or Public Office against the Body Corporate - how is he expected to know this and swear this under oath???
We have tried to contact someone from ABSA Bank in this regard but have been unsuccessful in talking to anyone with any authority. We wonder whether you have any knowledge of this new system and would like your input as a matter of urgency as this will certainly hold up transfers of properties.”
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SOLVENCY CERTIFICATE
I, the undersigned,
NAME:
IDENTITY NUMBER:
in my capacity as Chairman of the Body Corporate of -------------------------------, do hereby declare under oath that:
1. On date hereof the Body Corporate is not insolvent and that the Body Corporate never was insolvent;
2. Any record or interdict in any Deeds Registry or any other Public Office, of the sequestration of the estate of a Body Corporate bearing the name -----------------------------, or a name similar to -------------------------- does not apply to -------------------------------------
___________________________________
The Deponent has acknowledged that he/she knows and understands the contents of this Affidavit.
SIGNED and SWORN to before me at ……………………………………………………..
on the …………… day of …………………………………………………………. 2007.
____________________________________
COMMISSIONER OF OATHS
CHANGE OF NAME : NEWSLETTER
As you will most probably notice, the name of our Newsletter has been changed to “News Bulletin”. This change was necessary in order to prevent any confusion between the Newsletter that will appear on the Web Page and the regular (now) News Bulletin from the Secretariat which will also appear on the Web Page.
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