PROPERTY & INVESTMENT
few of such debtors , we would not have a problem with that as all debtors are analysed individually in accordance with our model .’
Interest would be recovered from the defaulting owner through the legal process at the rate determined by the Body Corporate applicable to their outstanding levies .’
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Roos adds : ‘ The difference between the amount paid and the amount purchased is invoiced as cost ( Interest and Collection fees ) and as such the scheme knows beforehand what the cost of such collection and finance is .
‘ We would be responsible for the collection at our risk and additional cost , if applicable , and the scheme would not be responsible for interest on the amount received for the debtors .
Considering the cost
These types of loans could help community schemes but it ’ s important to evaluate whether the interest and costs involved are worth paying . Those managing the scheme would also have to ensure that paying off the debt is achievable . ‘ A crucial factor to consider is the credit policy of the financier . Incentives must be aligned , and overextended community schemes should not be unable to honour their obligations in terms of the loan agreement . Propell has a hierarchy of credit limits to protect both the community scheme and Propell .
‘ The purpose of Debtor Finance is to relieve the paying owners from the burden caused by non-payers . The community scheme should not get caught up in an agreement where credit is overextended , and the scheme is left with the same ( or worse ) problem – where paying owners are liable for the debt of non-payers ,’ adds van Schaik .
Angelique Ruzicka