When must I pay my increased sectional title levy?

Sponsored Content

BUSINESS NEWS - Body corporates charge levies and unit owners are obliged to pay such levies. But what if a body corporate increases levies? When does the unit owner become responsible for paying such increased levies?

The body corporate of a sectional title scheme has certain functions and responsibilities in terms of the Sectional Titles Schemes Management Act (“STSMA”), one of which is to require the owners of the scheme to contribute to the funds of the scheme by way of normal and special levies, in order to maintain the scheme.

STSMA also provides that levies in the scheme becomes due and payable on the passing of a resolution by the body corporate. The Prescribed Management Rules (“PMR”), promulgated as part of the regulations under the Act, state that the body corporate must provide written notice to the owners of any obligations to pay a new increased levy or any overdue levy as well as the interest that will be charged should the levy not be paid in due time.

From the wording, it seems that the STSMA and the PMR have conflicting provisions as to whether the body corporate must first provide written notice to the owners of the scheme before they can take legal action against an owner for not paying their levies, or, whether the levy is due and payable on the date that a resolution imposing a levy is passed by the body corporate.

The uncertainty was fuelled by our lower courts that refused orders for arrear levies where no notice was given to owners. The presiding magistrates were of the view that although the liability to pay levies arose from the passing of a resolution by the body corporate, payment only became due and payable once notice was delivered to the owner who was in arrears.

In two recent cases, the High Court had the opportunity to consider the situation and provide clarity on the apparent conflict between STSMA and its PMR.

The High Court found that the lower courts had erred in their interpretation. The High Court determined that STSMA was the primary legislation, with the regulations and rules, such as the PMR, being secondary legislation. Accordingly, the primary legislation will take priority and the levy was therefore due and payable by an owner in each consecutive month after the passing of the resolution.

The High Court found that the obligation to give notice that was created in the PMR, was purely an administrative procedure to assist in the good management of the scheme.

Importantly, it does not mean that a body corporate need not comply with the PMR. A body corporate must still send out the necessary notification to owners to ensure that they are aware of the increase and the management of the scheme runs smoothly. But the obligation to pay any increased levy starts from the date of the body corporate resolution.

If you have any questions regarding the payment of levies to your body corporate, contact Jaco Lötter at 044 – 220 0240 for a free consultation. We’d love to talk to you - we speak property fluently.

Tonkin Clacey Inc. Mossel Bay: