Everything you need to know about levies

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Everything you need to know about levies

In terms of the Sectional Titles Schemes Management Act body corporates are required to establish a fund to cover its expenses. These expenses include the upkeep, management and administration of the common property, payment of taxes and other local authority charges as well as insurance premiums. 
 

The approved budgets of estimated expenditure are normally divided amongst owners in accordance with the participation quota (PQ) of each owner's section.

In terms of the Act, the trustees may from time to time raise special contributions for expenses which are necessary but were not budgeted for. The trustees alone have the power to raise special contributions for genuinely necessary and unbudgeted expenses.

Special contributions are payable on the passing of a resolution to that effect by the trustees of the body corporate, and may be recovered from the persons who were the owners during the time the resolution was passed. If a unit is transferred during the period in which a special contribution is due, the new owner becomes liable to pay the contribution, pro rata, from the day of transfer.

This can become a contentious issue when, for example, a special contribution is raised and becomes due and payable after an owner has sold his unit but before the transfer of ownership has taken place. As soon as the unit has been transferred from the seller to the purchaser the new owner becomes liable for any unpaid portion of the special contribution.

An owner may not withhold contributions unless the matter has been adjudicated by a Community Scheme Ombud Service adjudicator or a judge.

Author: Prime Property Marketing