Serious implications for sectional title property owners who don't pay levies

The levy account in each household in a sectional title scheme might not seem like an all-important account to pay, but as this is actually the lifeblood of the body corporate, any person who withholds their levies for any reason is actually doing it harm, says Johann le Roux, executive director of Propell.

Where Propell have been called in to assist in levy collections at sectional title schemes, there are various reasons given for the non-payments, he said.

"Owners often fail to speak to the trustees if they have problems with paying their accounts. There are ways of arranging payment plans with the body corporate and it is always better to arrange this before the amount outstanding becomes unmanageable. Withholding levies is sometimes also used as a leverage tool if the owner is unhappy with something within the scheme, but this is not a solution to any problem, in fact, it just makes the animosity worse," says le Roux.

A sectional title development which has levy collection problems will be unable to pay its creditors and keep the property maintenance up, which will eventually cause the property value to drop, and in turn, the owners' investments will decrease in value.

"So, in not paying the levy account, it is a form of self-sabotage, withholding the payment for any reason does not make sense," he says.

The body corporate, on discovering that levies are in arrears, will usually first send a reminder for non-payment of the levy account to the owner, but if he ignores this, a letter of demand will be sent. If this letter is ignored, it will be handed over to attorneys and this will end up in high legal costs and being listed as a bad payer on ITC.

If the levy account is handed over, the Sheriff will serve a summons or can pin the notice on the front door of the unit, which is legal as this would be the listed legal address of the owner of the account unless the body corporate has been notified in writing of a different address. The owner will have ten working days to respond to the summons and if he doesn't the Sheriff can then attach goods or continue with the proceedings to auction off the unit itself (if the sale of the goods is not enough to cover the amount outstanding).

Owners who do not pay their levies must realise, says le Roux, that the trustees of the body corporate must use the full strength of the law to collect outstanding levies and they have a duty to the other owners to protect them and the value of their units.

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