Written By Nawaz Peerbux
June 2020
The general term “syndicate” refers to a group of entities, being individuals, companies or corporates who share the same interest in protecting or enhancing their business. Any building with multiple apartments or units requires a Syndicate and in this case, the members of this non-profit organisation collaborate to maintain the upkeep and ensure that all aspects of the building are addressed.
How Is The Syndicate Formed?
The syndicate is commonly created prior to the completion of the development, whereby the promoter tends to appointed as the “President of the Syndicate’ and as the units are sold, the new owners become members.
Once there are sufficient members and AGM (annual general meeting) is held to discuss how to proceed with operating the syndicate and these decisions are voted with the “majority rule” principle implemented. The promoter does not have to be included in any further operations if they are not an owner and can be discharged of all their responsibilities.
A separate bank account for the Syndicate is opened which itemises all sums and values received on behalf of the building, as well as all those paid out of it. The authorising signature of this account initially tends to be the Promoter, purely as their name is on the legal documents, but this again can be changed at the discretion of the members in the AGM.
What Is The Role Of The Syndicate?
The fundamental purpose and objective of the Syndicate is to ensure the communal grounds and amenities of the complex are maintained.
- The Syndicate must keep all necessary records of the building, including the addresses and voting rights of owners, changes of ownership of apartments within the building, insurance and service contracts, and payments authorised and made
- The syndicate is obliged to maintain accurate and up-to-date accounting information showing all expenditure, income and arrears.
- The Syndicate needs to keep insurance records. These are both for claims and payments under the building defects liability insurance such as a leaking roof, cracking terrace or rotten drains
- An AGM is mandatory whereby, a copy of the accounts are provided prior to the meeting, along with an agenda and a budget for the coming year. It is imperative to acknowledge that any item not mentioned on the Agenda has no legal standing. Members are all invited to add any items to the agenda prior tot he AGM being held.
Whats Does The Syndicate Fee Cover?
Communal areas and amenities are covered by the Syndicate. In most cases, the following applies:
- Pool Maintenance
- Gardening and maintenance of the grounds
- Cleaning of communal areas e.g. corridors, staircases, outdoor facilities.
- Electricity charged for communal areas e.g. car park lighting, interior lighting for common spaces, swimming pool pump, water pump and lift.
- The water bill for the entire complex
- Lift maintenance contract.
- Building insurance
- Any remedial works required to common areas e.g electric gate.
- Decorating exterior and common areas.
How much Is the Syndicate Fees?
Every development is different and has different levels of expenditure, therefore the pricing depends upon the complexity of the building. The syndicate fees are calculated by the total expenditure required to cover the costs and dividing it amongst the number of units.
It is common to practise to allow an additional amount for unexpected costs which may arise. However, some Syndicates prefer to agree on the minimal fees and agree to contribute whenever an unusual expenditure arises.
Sunset Boulevard – Professional Syndicate Management
The operations of the syndicate can be assumed by an owner if the other members are all in agreement. Although this is practised in various complexes, it is not always the optimal solution. Due to the demanding nature of the role of the Syndicate, it may not be something which appeals to any of the owners. This being the case, there are professional Syndicate management companies such as Sunset Boulevard, that will take on this responsibility and alleviate the hassle and effort from any of the owners.
Sunset Boulevard is surrounded by a team of very valuable entities which can make the operating of a syndicate seamless and efficient. As the company was formed on the foundations of construction and management, it is endowed with all the necessary qualities to ensure a syndicate is operated with structure and fluency.
We have a network of maintenance workers to carry out the regular tasks which are required to uphold the standards of the building and the grounds. Contractors are also required at some stage to perform the heavier works such as fixing of leaks, redecorating of communal areas or drainage issues. Our attachment to the construction industry brings a very strong rapport with such trades.
The administrative duties of a syndicate can be very complex and time-consuming. At Sunset Boulevard we have the necessary skills to ensure accounts are all recorded accurately, all payments are executed and any arrears are chased.
Sunset Boulevard has formed a sturdy bond with legal representatives due to the continuous works which we cover on the real estate sector, and this provides tremendous support and efficiency if ever legal action is required to resolve any issues which may arise.
