Levies On an Equal 'per Owner' Basis

EmailEmail Print Share

13 Feb 2013

Over many years of giving sectional title advice, I have seen a persistent theme of schemes charging levies on an equal "pro rata" basis, either for all expenses or for specified ones.

All common expenses, whether “special" or not, and whether they relate to “improvements" or not, must be recovered from owners in accordance with their participation quotas.

There are other strata title and condominium jurisdictions in which the default for recovery of scheme expenses is that each owner is charged the same amount, so we must accept that this is often seen as being “fair". Whereas the Australian jurisdictions from which we copied our early sectional titles statutes initially charged levies on the basis of the measured area of sections, this principle was shortly thereafter changed to one in which communal expenses are shared on the basis of the valuation of the various units in the scheme. So a third apparently “fair" system of sharing is to base levies on the value of each owner's investment in the scheme.

There is no one particular basis (measured floor area, equality or value) that is objectively “fairest". The Sectional Titles Act, No. 86 of 1986, provides that the default manner in which common expenses must be recovered from owners is in accordance with the participation quotas allocated to the sections they own. The only circumstances in which the scheme is entitled to depart from this expense–sharing formula is in accordance with a rule made under subsection 32 (4) of that Act, which allows for the modification of the effects of the participation quotas in specified regards.

What does all this mean in practice? All common expenses, whether “special" or not, and whether they relate to “improvements" or not, must be recovered from owners in accordance with their participation quotas.

When, for whatever reason, the body corporate decides that it would be more equitable for a specific type of expense to be recovered from owners on another basis, before implementing this alternative basis, it must:

(a)    make a rule under subsection 32 (4) of the Act, which requires a special resolution;

(b)    obtain the written consent of all owners who are negatively affected by that rule; and 

(c)    have the rule filed at the offices of the Registrar of Deeds.

Only then is the body corporate entitled, in accordance with that rule, to collect levies other than in accordance with the participation quotas. - Graham Paddock 

Professor Graham Paddock, is an authority on sectional title and HOA law and practice and is the head of Paddocks. For more information visit www.Paddocks.co.za.  

About the Author
Graham Paddock

Graham Paddock

B.A. LL.B (Cape Town) A.A Arb. Adjunct Professor at the University of Cape Town's Faculty of Engineering and the Built Environment (Department of Construction Economics and Management). Graham is a specialist sectional title and home owners’ association lawyer, an attorney, notary and conveyancer who has more than twenty-five years of experience in advising and training role-players in the sectional title and home owners' association industry. Graham is the head of Paddocks (www.paddocks.co.za), a firm that provides a number of courses, books and support services to the sectional title and HOA industry.

Similar Articles

When it comes to investing in a sectional title scheme,...

Buying property is more than an investment, homeowners and...

What you say to a seller and their agent can affect your...

View all articles

Top Articles

Whether you’d like to spend time on the glorious coast or...

St Francis Bay in the Eastern Cape is the ideal weekend or...

Overpricing your property usually results in it being sold...

View all articles
Top Articles
11 Feb 2016
Many families are migrating from Gauteng to Ballito for the lifestyle be...
11 Feb 2016
A UCT architectural student tackles social, economic and environmental i...
11 Feb 2016
With a big influx of people from Gauteng moving to the Helderberg Basin,...
10 Feb 2016
Morningside, Rivonia, Rosebank and Bryanston will see much residential d...
10 Feb 2016
Offering sophisticated retirement living, Lazuli Coastal Lifestyle Estat...
Newsletter
Get the latest property news.
Select your options:
Loading

Your browser is out of date!

It looks like you are using an outdated version of Internet Explorer.

If you are using Internet Explorer 8 or higher, please verify that your Internet Explorer compatibility view settings are not enabled.

For the best browsing experience, update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox.


Please contact our Property24 Support Team for further assistance. Tel. +27 (0)861 111 724