The Sectional Title Act states that one of the key functions of a body corporate is to set up a fund for the repair, upkeep, control, management and administration of the common property. For this reason, owners or members are required to make contributions to this fund called levies.
But what happens if these levies are not paid?
According to Martin Bester, the Managing Director of Intersect Sectional Title Services, who sits on the board of the Residential and Sectional Title Committee of SAPOA and is a committee member of the Sectional Title Regulations Board, he is often asked if a sectional title body corporate is entitled to charge compound interest on arrear levies?
“The simple answer is yes. Non-payment of the levy contributions is dealt with in prescribed management rule [PMR] 31 (5) & (6) which states that the trustees shall be entitled to charge interest on arrear amounts at such rate as they may from time to time determine.”
“It also states that an owner shall be liable to pay all legal costs, including costs as between attorney and client, collection commission, expenses and charges incurred by the body corporate in obtaining the recovery of arrear levies, or any other arrear amounts due and owing by such owner to the body corporate, or in enforcing compliance with these rules, the conduct rules or the Act.”
Bester also advises that the National Credit Act has no effect on the provisions of the Sectional Titles Act or the charging of compound interest of levy arrears.”
Publisher: eProp
Source: ISTS
