Estate Living Magazine Develop - Issue 44 August 2019 | Page 24

I N V E S T & d e v e l O P WHAT DETERIORATING MUNICIPAL INFRASTRUCTURE MEANS FOR RESIDENTIAL ESTATES Not a day goes by without one hearing of some municipal crisis somewhere in the country. These range from banal but extremely annoying stories of billing crises, lack of budgetary control and bloated bureaucracies to the horror story unfolding in Emfuleni, where total collapse of the municipality as a functional entity has unleashed a tsunami of raw sewage flowing unabated along the streets and through the buildings, as it makes its way to the nearest river. Then there was the international headline-grabbing story of Day Zero as Cape Town faced the very real possibility of simply running out of water, and the disturbingly frequent violent confrontation on the streets as communities protest against lack of service delivery, or as striking municipal workers demand salary increases that have no bearing on productivity or affordability. In short, our municipalities are in crisis, but the implications are yet to be felt by every citizen of this country. One response has been the migration of people, typically in the middle- to upper-income bracket, into residential estates. The growth of these enclaves of relative calm and tranquillity has been in direct response to the rate of collapse of the municipalities as functional entities. So, what are the implications of this to both residents and owners of real estate in residential estates? Are homeowners associations (HOAs), bodies corporate (BCs) and managing agents (MAs) increasingly replicating the role once fulfilled by municipalities? As these roles change, what of the liability landscape that is emerging? What are the risks that lie invisible, but lurk ever present to trustees as they fulfil their fiduciary role, but without financial compensation to offset potential personal liability?