Written by: Eugene van der Walt | Afrikaanse weergawe
Sectional title living comes with shared costs and shared responsibilities. When one owner stops paying their levies, it is not just an administrative inconvenience, it affects every other owner in the scheme. Here is what the law allows the body corporate to do about it.
What Are Levies and Why Do They Matter?
Every owner in a sectional title scheme is required by law to pay monthly levies. These contributions fund the day-to-day running of the scheme: security, garden maintenance, building insurance, cleaning, repairs to common property and contributions to the reserve fund. When levies go unpaid, the body corporate either runs short or the remaining owners effectively subsidise the defaulter.
The Sectional Titles Schemes Management Act 8 of 2011 and its Prescribed Conduct and Management Rules govern how levies are set and recovered. Non-payment is not a grey area: it is a clear breach of every owner’s statutory obligations.
What Can the Body Corporate Do?
The body corporate has several tools available, ranging from administrative steps to court action.
- The first step is a written demand for payment, usually sent by the managing agent or the body corporate’s attorneys, setting out the amount owed and a deadline to pay.
- The Prescribed Management Rules allow the body corporate to charge interest on overdue levies. The rules and the scheme’s management agreement will specify the applicable rate.
- Depending on the scheme’s conduct rules, access to amenities such as the pool, gym or parking may be suspended for owners who are in arrears.
- For smaller amounts the body corporate can bring an action in the Magistrate’s Court to recover the debt without needing to follow full High Court procedures. This is often the fastest and most cost-effective route.
- Larger or more complex matters may warrant a High Court application. Once judgment is obtained, the body corporate can proceed to execution against the owner’s assets or, in extreme cases, against the unit itself.
- The body corporate has a statutory hypothec over every unit in the scheme. This means levy arrears effectively constitute a charge against the property and can be recovered from the proceeds of a sale.
What About the Owner’s Bond?
Where an owner’s unit is bonded, the body corporate can also notify the bondholder of the arrears. Banks have a strong interest in ensuring their bonded properties are not sitting in schemes with deteriorating finances, and notification often prompts swift action.
What If the Owner Disputes the Levy Amount?
An owner who genuinely believes their levy has been incorrectly calculated may refer the dispute to the Community Schemes Ombud Service (CSOS). The CSOS provides a low-cost dispute resolution mechanism for sectional title and homeowners association matters. Filing a CSOS dispute does not, however, entitle an owner to withhold payment in the meantime. The obligation to pay continues until the dispute is formally resolved and any adjustment ordered.
What Owners Should Know
If you are an owner falling behind on levies, communicate early. Trustees and managing agents deal with genuine hardship differently from owners who simply ignore correspondence. A payment arrangement agreed in writing is far better than a default judgment and a damaged credit record.
Van der Walt and Associates Inc assists bodies corporate, sectional title owners and homeowners associations with levy recovery, CSOS applications and community scheme disputes. Contact us for an initial consultation.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.