select
|

What is special levy?

The notification of a special levy can evoke much anxiety among homeowners, says Cameron Jansen, Broker/Manager of RE/MAX Central, whose office services the Sandton and the surrounding areas. He notes that homeowners who live within a sectional title scheme already pay a monthly levy, so it can bring about confusion or even anger when they are required to pay an additional levy.

“To answer what a special levy is and who it is applicable to, it is best to first define what a basic levy is. A basic levy is generated by a homeowner’s association or body corporate and is used to pay for things such as security, rates on the properties themselves and general maintenance. A special levy is an additional amount of money that needs to be raised for a project, upgrade or extensive repairs that is outside the normal monthly expenditure of the complex. These projects could include a security upgrade or adding a feature such as a swimming pool or club house,” says Jansen. “Typically we have seen several complexes that have raised a special levy to give the development a fresh new look. In the case where a complex has not been painted for a few years, a levy could be introduced to get enough money together to get that kind of work done.”

So how does a special levy get implemented? Jansen says that in a body corporate there are trustees who have been appointed by the homeowners within a complex. These trustees are responsible for making decisions with regard to what happens within the development. Once the trustees have identified a need for a special levy to complete a specific project, they will hold a special general meeting addressing the issue, making a proposal to the homeowners in the complex. Ideally the proposal should provide the homeowners with a detailed breakdown of the expenditure involved, as well as an explanation as to why the special levy is necessary. The meeting is an opportunity for the trustees to present reports from contractors and experts so that homeowners understand the reasoning behind the project. For example, if unattended a leaking roof will cause damage to the ceiling and possibly the contents of the property.  A vote will be held with a quorum of 80% required for the interim special levy to be implemented. 

Once the special levy has been agreed upon, there is the matter of payment. According to Jansen payment of a special levy can be made as a once off payment, over a three month period, six month period, a year or even longer. This will depend on the general conscious of the homeowners.

This brings about the question, what happens to the payment of the special levy if the homeowner decides to sell their property? “It is important that the seller makes their estate agent aware of the fact that a special levy is being raised or is currently being paid. This information should be relayed to any potential buyers, so they are aware of the fact before they purchase the property,” says Jansen.  “The incoming owner is liable for the levies from the date of transfer. Where a special levy has been raised, the seller must settle any outstanding amount before the trustees will issue a levy clearance certificate. However, settling a special levy before transfer takes place is not the ideal situation for the seller. The seller and buyer are entitled to come to an agreement whereby each party is responsible for a pro-rate share of the special levy.”

He concludes by saying that buyers who are purchasing a property within a sectional title scheme should request a copy of the minutes from the latest annual general meetings held by the trustees to ensure that they are not caught unaware of any possible planned special levies in the future. 

For more information regarding property in the greater Johannesburg area contact Cameron Jansen, Broker/Manager at RE/MAX Central on 083 653 5878 or 011 217 6900.




  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 Jan 2018
      Many people only start thinking about home-ownership when they are ready to “settle down” or start a family, which is why first-time buyers these days are generally in their mid-30s, compared to those in the previous generation who were usually in their mid-20s.
    • 22 Jan 2018
      Moving away from the city to a country or coastal town and a slower-paced life is a frequent new-year resolution for South Africans, but thorough research should be done before you break free from the hustle and bustle, because making the wrong move could turn out to be a very expensive mistake, and even more stressful for you and your family than staying in the “big smoke”.
    • 22 Jan 2018
      Cape Town is home to many breathtaking and historic homes, but House Invermark designed in 1969 by South African architect Gilbert Colyn, with inspiration from two modernist icons: the Glass House by Phillip Johnson and Farnsworth House by Ludwig Mies van der Rohe is in a class of its own.
    • 22 Jan 2018
      2017 was a challenging year for the South African property market in general, despite small pockets of thriving activity in areas like the Western Cape. As we head into 2018, Tony Clarke, Managing Director of the Rawson Property Group, casts his eye forward to property trends and market influences that could make their impact felt in the New Year.
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK