Can Levy Double & Non-paying Owners?

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07 Feb 2013

A Property24 reader asks:

A Property24 reader asks whether a special levy can be raised to cover the debt from non-payers in the scheme and if the levy can double.

My first question pertains to a special levy that our body corporate in our estate has imposed. They have decided that we should pay a once off special levy of R5 900 to offset the debt that was created through non-payments of the owners in the estate. Is this our problem? There was promise of an AGM to discuss this special levy which was never held. Is this allowed? 

My second question is with regards to our normal monthly levy. The body corporate have decided to increase our monthly levy contributions to more thandouble the monthly amount. The reason they gave was that there has never been an increase before (the estate is only a few years old). Can they so this? 

Phil Calothi, owner and Managing Director of a leading Cape Town based managing agent company, Land and Sea Development Services (Pty) Ltd, advises:

It is the responsibility of your trustees to collect outstanding levies from the persons who owe them, not from the other members as this will create a very dangerous precedent. 

If your trustees are unable to collect any levies, whether they are ordinary levies or special levies, they are obliged to take legal action against the members concerned and to employ a collection attorney to collect the outstanding levies on their behalf and charge all the costs to the defaulting members concerned. 

The attorney will issue a summons, obtain a judgment against the member if necessary and the sheriff will execute the judgment by attaching movables or fixed property if required in order to acquire the funds necessary to settle the levy debt and all the legal costs. 

Your trustees are required at the beginning of each financial year to draw up an estimate of the expenditure the body corporate is expected to incur over the next financial year and to calculate what levies will be required to be collected in order to fund the expenditure. They arenot permitted to raise levies in the nebulous manner that you refer to. 

It seems to me that (a) you need to vote in a new set of trustees and (b) you need to change your managing agent who should have been advising your trustees against taking the actions you described above. 

Readers may submit questions to Property24’s Guest Expert panel and/or comment below. We may not be able to answer all questions received, but all will be considered. 

About the Author
Phil Calothi

Phil Calothi

Phil Calothi is the owner and Managing Director of a leading Cape Town property management company, Land and Sea Development Services (www.lsds.co.za).

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