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Is such a high special levy legal?

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01 Mar 2013

A Property24 reader asks:

A Property24 reader says her complex wants a special levy of R12k from each person for painting, which she feels is excessive. Is this legal?

My complex wants a special levy of R12 000 from each person for painting. There are 50 units. I feel this is rather excessive. I certainly do not have this kind of money. Is this legal? 

Leigh Maingard, Managing Director of Diamond Property Management, a property management business based in Cape Town, advises:

A special levy may be raised by the board of trustees for any unforeseen expenditure for which the body corporate has not made provision for in their annual budget or does not have sufficient surplus of funds available for (Management Rule 31.4). The sectional title act allows the trustees to make such decisions without consulting with the members of the body corporate beforehand. They are ultimately responsible for the management and maintenance of the common property. The trustees may also decide if the special levy must be paid as a once-off amount or if it can be paid over a period of time. The urgency of the matter normally determines this decision. 

However, at the annual general meeting of the body corporate the members of the body corporate may impose restrictions and directions on the newly elected board of trustees (Section 39.1 of the sectional Title Act). Should the members impose financial restrictions or directions on the trustees in terms of this section, the trustees may be obligated to call for a vote on unforeseen expenditure, which has not been budgeted for. In order to determine if the trustees are therefore acting within the Sectional Title Act and their powers as trustees, a review of the latest annual general meeting minutes would need to be done. 

Effective financial management and proactive maintenance planning of a body corporate will go a long way in preventing trustees from having to raise special levies for unforeseen expenditure. 

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.  

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