SECTIONAL TITLES: SPECIAL LEVIES
What is a special levy for? Is it really necessary? What if I can’t afford to pay?
If you are an owner of a sectional title unit these may be some of the questions you or someone you know has asked. No one likes unexpected expenses and special levies is no exception.
What is a special levy?
Unlike a general levy which is based on the scheme’s annual budget and raised at the annual general meeting (AGM), a special levy is raised by the trustees of a sectional title scheme for an expense that is necessary and which was not budgeted for and approved by the owners at the last AGM.
The Sectional Titles Act, 1986 (Act 95 of 1986) does not define the term “necessary” in as far as expenses are concerned and, leaves the owners and their wallets at the mercy of the trustees.
However all hope is not lost. At an AGM the body corporate has the power to impose restrictions and conditions on trustees or direct them to act in a certain way so long as these restrictions or conditions do not contradict the Act, Management Rules or Conduct Rules.
For example, the body corporate can restrict the power of trustees to raise a special levy to a certain amount. If the proposed special levy exceeds the amount, the trustees must first call a special general meeting and vote accordingly.
I am selling my unit, who is liable to pay?
Liability for the payment of a special levy varies from an ordinary levy. Special levies become due and payable on the date of passing of the resolution.
This means, that the registered owner of the unit at the time the levy is raised becomes liable and can only transfer such liability by agreement with the purchaser.
Owners of sectional title units need to be aware of the additional costs that they are legally obliged to bear. It is extremely important as an owner or purchaser of sectional title unit to take the time to become familiar with the rules, regulations, liabilities and responsibilities that are unique to this type of property.