Property Law and Sectional Title

 

 

 

No, restricting access is also generally unlawful without a court order.  South African law protects an owner's right to use and possess their property.  Body Corporates cannot take the law into their own hands by preventing access as a levy collection tactic.  Such actions can be challenged in court, leading to legal repercussions for the Body Corporate.
 

No, absolutely not!  It is unlawful for a Body Corporate in South Africa to disconnect essential services like water, electricity, or gas to a unit as a means of forcing levy payment without a court order.  Doing so is considered "spoliation" and is illegal.  The Body Corporate can face legal action and be forced to reconnect services immediately, potentially incurring legal costs and damages.  Always follow lawful collection procedures, not illegal service disconnections.
 

"Arrear levies" are simply overdue and unpaid monthly levy contributions owed by a unit owner to the Body Corporate of their sectional title scheme. Levies are mandatory contributions from all owners to fund the scheme's operational and maintenance costs. When an owner fails to pay their levies by the due date, the unpaid amount becomes an arrear levy, representing a debt owed to the Body Corporate.
 

The owner remains ultimately responsible for levy payments, regardless of tenant rental payments (or non-payment). However, if the owner is renting out their unit, the Body Corporate can utilize Section 39(1)(f) of the CSOS Act to potentially recover arrear levies directly from the tenant's rental income.  This requires a CSOS order directing the tenant to pay rent to the Body Corporate until the arrears are settled. The tenant must be cited as a co-respondent in CSOS applications of this nature.

While owners are legally obligated to pay levies, Body Corporates, acting reasonably, may consider:

  • Payment Arrangements: Negotiating a structured payment plan to allow the owner to pay off arrears in installments.
  • Understanding Circumstances: While not obligated, understanding the owner's genuine financial hardship can inform a more compassionate and potentially workable approach.
  • Consistency and Fairness: Any payment arrangements must be carefully considered to ensure fairness to all owners and should not set a precedent for non-payment. Legal advice should be sought to ensure arrangements are legally sound and enforceable.

However, it's crucial to remember that Body Corporates have a fiduciary duty to all owners to recover outstanding levies and maintain the scheme's financial health.  Long-term non-payment cannot be sustained.

Show all FAQs in Category

Collection of Arrear Levies

"Collection of Arrear Levies" in sectional title schemes refers to the process undertaken by the Body Corporate to recover unpaid levies from owners who have fallen behind on their mandatory contributions. These "arrear levies" represent overdue payments essential for the financial stability and operation of the scheme, and their effective collection is crucial for maintaining common property and services for all residents in Johannesburg.

Collection of Arrear Levies in Sectional Title: A Guide for Body Corporates

Arrear levies are a critical threat to the financial health of any sectional title scheme in Johannesburg.  Unpaid levies directly impact the Body Corporate's ability to maintain the common property, provide essential services, and ultimately, preserve property values for all owners.  While levy collection can seem daunting, understanding the legal process and acting decisively is essential. Aucamp Attorneys provides Johannesburg Body Corporates with clear, expert guidance through each step of lawful and effective arrear levy recovery.

The Legal Process 

While navigating arrear levy collection can feel complex, having experienced legal representation ensures the process is managed efficiently and within the bounds of the law.  Here's a breakdown of the typical legal procedure for arrear levy recovery in Johannesburg, as governed by the Magistrates Court Act and the Sectional Titles Schemes Management Act (STSMA):

Phase 1: Formal Demand and Initial Action

Step 1: Registered Letter of Demand (Section 56 Demand)

  • This initial formal letter, drafted by Aucamp Attorneys, is sent via registered mail, Sheriff, hand delivery, or even email to the defaulting owner. Proof of receipt is crucial.
  • It clearly outlines the arrear amount, the nature of the debt (levies), the Body Corporate as the claimant, and the 14-day period for response, as per the STSMA.
  • The Letter of Demand serves multiple purposes:
  • Formal Notification Officially informs the owner of their overdue debt and the Body Corporate's intention to pursue legal action.
  • Initiation of Legal Process Formally starts the legal collection process, allowing for the claiming of legal costs and interest (currently 10.5% per annum) from the demand date.
  • Opportunity for Amicable Resolution Provides a window for the owner to make full payment or propose a payment arrangement, potentially avoiding further legal escalation and costs.
Phase 2: Formal Legal Action - Summons and Judgment

Step 2: Summons (Magistrate's Court)

  • If the owner fails to respond or make satisfactory arrangements within the demand period, Aucamp Attorneys will issue a formal Summons on behalf of the Body Corporate.
  • The Summons is issued through the Magistrate's Court with jurisdiction over the sectional title scheme's location in Johannesburg.
  • Service of Summons The Sheriff of the Court serves the Summons at the owner's unit address within the scheme (which acts as their domicilium citandi et executandi - legal address for summons and execution under STSMA Rule 4(a)). Service can be personal or by affixing to the unit if personal service is not possible.
  • Defense Period The owner has 10 business days to formally "defend" the summons by indicating their intention to dispute the claim with the court.

Step 3: Application for Default Judgment

  • If the owner fails to defend the Summons within 10 business days, and upon instruction from the Body Corporate, Aucamp Attorneys will apply for Default Judgment.
  • The application is submitted to the Court Registrar, who forwards it to the Magistrate for review.
  • Granting of Default Judgment If the Magistrate is satisfied with the Summons, proof of proper service, and the lack of defense from the owner, Default Judgment will be granted in favor of the Body Corporate. This Judgment is a formal court order confirming the debt is legally owed.
Phase 3: Enforcement and Recovery of Debt

Step 4: Warrant of Execution Against Movable Property

  • Once Judgment is granted, Aucamp Attorneys will proceed with issuing a Warrant of Execution against the owner's movable assets.
  • Sheriff's Attachment The Warrant is delivered to the Sheriff, who will attempt to execute it at the owner's residential address. Initially, this is often the unit within the scheme.
  • Tracing and Asset Identification If the Sheriff cannot locate sufficient movable assets at the unit (e.g., if it's tenanted or not the owner's primary residence), a tracing agent may be employed to locate the owner's current residential address. The Warrant is then re-issued to this new address.
  • Asset Attachment and Sale The Sheriff, upon visiting the owner's residence, demands payment. If payment is not made, the Sheriff will identify and attach movable assets of sufficient value to cover the debt. These assets may be removed and sold at a Sale in Execution to recover the arrear levies. Owners often make payment arrangements at this stage to avoid asset removal.

Step 5: Section 66 Application (Immovable Property - Unit Executable)

  • If the sale of movable assets does not fully satisfy the Judgment debt, Aucamp Attorneys will proceed with a Section 66 Application to the Court.
  • Declaring Immovable Property Executable This application requests the Court to declare the owner's immovable property - their unit within the sectional title scheme - to be executable.
  • Sale in Execution (Unit Auction) If the Section 66 Application is successful, a Warrant of Execution against Immovable Property is issued, allowing the Sheriff to attach the unit itself. The unit is then sold at a Sheriff's Auction to recover the outstanding arrear levies. This is generally a last resort and owners typically take action to settle the debt before this stage.

Step 6: Sale by Sheriff's Auction and Transfer

  • Once the unit is sold at auction, a conveyancing attorney manages the transfer process.
  • Settlement of Arrears Outstanding levies, legal costs, and other scheme debts are settled from the proceeds of the sale. Clearance figures are issued to facilitate the property transfer.
     

Important Considerations Throughout the Collection Process

  • Owner Responsibility It is crucial to emphasize that unit owners are legally obligated to pay levies, regardless of whether tenants are paying rent or if they perceive issues with the Body Corporate's management. Owner's cannot withhold levies as "set-off" for perceived debts without a court order.
  • Cost Recovery Legally, all reasonable legal costs incurred by the Body Corporate in the arrear levy collection process are recoverable from the defaulting unit owner.
  • CSOS Dispute Resolution While the Magistrates Court route is outlined above, the Community Schemes Ombud Service (CSOS) offers an alternative, often more cost-effective, dispute resolution pathway for levy disputes. Aucamp Attorneys can advise on the most appropriate forum based on the specific circumstances.
  • Unlawful Practices to Avoid Body Corporates cannot resort to unlawful tactics such as:
    • Illegal Disconnection of Services Water, electricity, and gas cannot be disconnected due to non-payment without a court order. Doing so can lead to "spoliation" claims and legal repercussions for the Body Corporate.
    • Restricting Access Preventing owners or tenants from accessing their units or the scheme without a court order is unlawful.
    • Public Shaming/Defamation Publicly listing or shaming owners in arrears is unlawful and unethical.
       

Aucamp Attorneys: Your Partner in Arrear Levy Recovery in Johannesburg

Effective collection of arrear levies is vital for the financial well-being of your sectional title scheme.  Aucamp Attorneys provides Johannesburg Body Corporates with comprehensive legal services for arrear levy recovery, ensuring a lawful, efficient, and results-driven approach. From initial Letters of Demand to final Sale in Execution (if necessary), we guide you through every stage of the process, protecting your scheme's financial stability and the interests of all compliant owners. Contact us today for expert legal assistance and proactive solutions for arrear levy management.