Consequences of non-payment of Sectional Title Scheme Levies

Levies raised by body corporates of sectional title schemes are essential for the maintenance and management of the scheme. Various costs such as maintenance, insurance etc. are covered by these levies to maintain the communal areas and infrastructure. When owners fall in arrears with their levy payments, financial strain is created on the body corporate which affects all residents.

All owners in a sectional title scheme are obliged to pay these contributions. These amounts are calculated in accordance with an approved annual budget and each owner’s participation quota (size of unit).

In an effort to discourage non-payment, a body corporate may charge interest on overdue amounts. Non-payment may also result in negative listings with credit bureaus.

Initially, the body corporate will forward reminders and letters of demand to defaulters. If this fails, the body corporate may proceed to issue summons against defaulters and obtain a judgement from court. If a defaulter does not make payment in terms of the court order, emoluments attachment orders or attachment of assets may follow. Eventually, the unit itself may be attached and sold in execution.

Outstanding levy amounts cannot be written of by body corporate and is considered a secured debt against the property which must be paid even if the unit is sold.

It is important that a body corporate acts timeously in the collection of debts as levy debt prescribes after a period of 3 years. This means that the debt lapses if no effort has been made to collect same. If legal action is instituted within this timeframe, prescription is interrupted.

Owners of sectional title units must understand that their levy payment serves an important purpose of maintaining the scheme which they bought into for the benefit of all owners. In the event that an owner has difficulty in making payments, it is important keep the lines of communication open with the body corporate.