[Question] Refusing to pay Levies

[Dientjie]

Not sure if this is the right form to post in....

We stay in a sectional title complex and have a company as a body corporate. Problem is they don't do anything, we haven't had a AGM in the three years we have lived there, units need to be painted and they are not responding to my enquiries about this, the gate is always broken, the cctv cameras have not been repaired, the intercom system is still faulty and so the list goes on....

Can I refuse to pay my levies based on the fact that they are not doing their job?

[Phil Cooper]

No - if you do, you are legally in the wrong.

HOWEVER - in terms of the Sectional Title Act they MUST hold an annual AGM, present accounts, etc., and committee voted for.

Contact the Managing Agents and advise them you will lay Charges in terms of the Companies Act if no AGM is called inside a rweasonable period - say 30 days....

Point out that in terms of the Act the Trustees can be held liable IN THEIR PERSONAL CAPACITIES if there is anything untoward.

[sterne.law@gmail.com]

And call for the financials.
By company as a body corporate are you referring to a management agent?

[Citizen X]

Not wise, as they will initiate legal proceedings.

The problematic statutory provision is section 37(1)(b) and section 37 (2) of the Sectional Titles Act which provides:

A body corporate referred to in section 36 shall perform the functions entrusted to it by or under this Act or the rules, and such functions shall include -

to require the owners, whenever necessary, to make contributions to such fund for the purposes of satisfying any claims against the body corporate: Provided that the body corporate shall require the owner or owners of a section or sections entitled to the right to the exclusive use of a part or parts of the common property, whether or not such right is registered or conferred by rules made under the Sectional Titles Act, 1971 (Act No. 66 of 1971), to make such additional contribution to the fund as is estimated necessary to defray the costs of rates and taxes, insurance and maintenance in respect of any such part or parts, including the provision of electricity and water, unless in terms of the rules the owners concerned are responsible for such costs;

and

Liability for contributions levied under any provision of subsection (1), save for special contributions contemplated by subsection (2A), accrues from the passing of a resolution to that effect by the trustees of the body corporate, and may be recovered by the body corporate by action in any court (including any magistrate’s court) of competent jurisdiction from the persons who were owners of units, holders of exclusive use areas and holders of real rights of extension at the time when such resolution was passed: Provided that upon the change of ownership of a unit, exclusive use areas and real rights of extension, the successor in title becomes liable for the pro rata payment of such contributions from the date of change of such ownership

[tec0]

Not wise, as they will initiate legal proceedings.

The problematic statutory provision is section 37(1)(b) and section 37 (2) of the Sectional Titles Act which provides:

A body corporate referred to in section 36 shall perform the functions entrusted to it by or under this Act or the rules, and such functions shall include -

to require the owners, whenever necessary, to make contributions to such fund for the purposes of satisfying any claims against the body corporate: Provided that the body corporate shall require the owner or owners of a section or sections entitled to the right to the exclusive use of a part or parts of the common property, whether or not such right is registered or conferred by rules made under the Sectional Titles Act, 1971 (Act No. 66 of 1971), to make such additional contribution to the fund as is estimated necessary to defray the costs of rates and taxes, insurance and maintenance in respect of any such part or parts, including the provision of electricity and water, unless in terms of the rules the owners concerned are responsible for such costs;

and

Liability for contributions levied under any provision of subsection (1), save for special contributions contemplated by subsection (2A), accrues from the passing of a resolution to that effect by the trustees of the body corporate, and may be recovered by the body corporate by action in any court (including any magistrate’s court) of competent jurisdiction from the persons who were owners of units, holders of exclusive use areas and holders of real rights of extension at the time when such resolution was passed: Provided that upon the change of ownership of a unit, exclusive use areas and real rights of extension, the successor in title becomes liable for the pro rata payment of such contributions from the date of change of such ownership

and is why i am staying away from a such properties, you have very "limited" options. However speak to your lawyer about property devaluation due to neglect it is a whole other can of worms and can backfire mind you... So be aware of that. But if i am not mistaken if the request "basics" are already paid for by all parties and work is not being done then surly some responsibility must be taken by the responsible party. '

dare i use the words "audit" to clarify where the money is going? It is not unreasonable request but i would strongly advise that you speak to a lawyer that knows her/his property laws. They will normally know what you can do within your rights.

[Citizen X]

dare i use the words "audit" to clarify where the money is going? It is not unreasonable request but i would strongly advise that you speak to a lawyer that knows her/his property laws. They will normally know what you can do within your rights.

Tec0, you are not wrong in what you state, what you state can be reconciled with section 37(3)

(3) The body corporate shall, on the application of an owner or mortgagee of a unit, or any person authorized by such owner or mortgagee, certify in writing -

(a) the amount determined as the contribution of that owner;

(b) the manner in which such contribution is payable;

(c) the extent to which such contribution has been paid by the owner; and

(d) the amount of any rates and taxes paid by the body corporate in terms of section 51 and not recovered by it.