Property owners must not withhold levy payments

It sometimes happens that a sectional title unit owner will become disgruntled with the way trustees are running their scheme and withhold their levy payments as a way of getting their message across.

What they do not realise is that in doing so they can do their scheme harm, in putting it in a state of financial risk, says Mandi Hanekom, operations manager of the levy funding company Propell.

The receipt of the full levy amounts from each owner each month is the lifeblood of all sectional title schemes and if one owner does not pay their levies, for whatever reason, it upsets the financial balance that the trustees work hard to maintain, she said.

Any sectional title scheme that has levy collection problems will not be able to pay its creditors in full and if the situation continues maintenance of the scheme might be reduced or postponed, which results in the value of the property being affected negatively, and could even result in the value dropping.

If the body corporate finds that any owner is in arrears, they usually send a reminder for the non-payment but if the owner chooses to ignore this, a letter of demand should be sent to him. In turn, if this letter is ignored, they should hand the matter over to a collection agency or an attorney as soon as possible. The non-payer will then be listed as a bad payer on ITC but this affects the body corporate negatively as well because they will have to cover the legal costs of recouping unpaid levies in the meantime, said Hanekom.

The processes of recovering unpaid levy amounts, if it becomes extreme, is a drawn out one, because once the account is handed over they then have to wait for the Sheriff of the court to serve a summons (he may pin the notice on the front door of the unit as this is the legal listed address of the owner of the unit). Once the summons has been issued the owner has ten working days to respond and if he doesn't the Sheriff can then attach goods to the necessary value. If he does not find value in the items in the unit, they may have to continue with proceedings to repossess the unit itself to sell at auction, which, too, is a lengthy process.

The owners that do not pay their levies must realise that the trustees of the scheme are not acting out of "spite" or nastiness but they are merely doing their jobs in using the full strength of the law to collect the outstanding money. If they do not do this they are letting the other owners (who are regular payers) down in not protecting their assets' value, said Hanekom.

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