{"id":278099,"date":"2018-10-20T07:40:09","date_gmt":"2018-10-20T05:40:09","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=278099"},"modified":"2018-10-20T07:40:32","modified_gmt":"2018-10-20T05:40:32","slug":"south-africans-living-in-complexes-need-to-watch-out-for-special-levies","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/278099\/south-africans-living-in-complexes-need-to-watch-out-for-special-levies\/","title":{"rendered":"South Africans living in complexes need to watch out for ‘special levies’"},"content":{"rendered":"

While recent legal changes have made it a requirement<\/a> <\/strong>for sectional title schemes to maintain a reserve fund for maintenance purposes, this new fund has not replaced other ‘special levies’.<\/p>\n

This is according to Andrew Schaefer, MD of property management company Trafalgar, who notes that any money held in a reserve fund account can only be spent in accordance with a 10-year maintenance plan that also details the repairs to common property that are expected<\/strong> to become necessary over time.<\/p>\n

“In contrast, special levies always relate to unexpected<\/strong> events and emergency expenditure that has also not been anticipated in the scheme\u2019s annual budget, such as urgent repairs to lifts, roofs or water mains,” he said.<\/p>\n

“And in terms of Section 3(3) of the Sectional Title Schemes Management Act (STSMA) and prescribed management rule 21(3)(a), the trustees of a body corporate are still empowered to decide when a \u2018special contribution\u2019 is necessary to fund this type of expenditure, and to recover this contribution from the current owners in the scheme.”<\/p>\n

In this the STSMA is really no different from the old Sectional Titles Act, he says, in that owners really don\u2019t have much say when it comes to the imposition of a special levy.<\/p>\n

“Provided that the unforeseen expense is really necessary and cannot be delayed until the next budget is compiled, they just have to pay their portion of it, usually in accordance with the participation quota (PQ) of their sections,” Schaefer said.<\/p>\n

Buying or selling<\/strong><\/p>\n

There is one very important difference between the two pieces of legislation,\u00a0Schaefer stated, namely the provision in the STSMA that the responsibility for payment of the special levy now passes automatically from owner to buyer when a sectional title unit is sold.<\/p>\n

Under the old Act, Schaefer said that the seller of a unit would usually have to settle any special levy amount to obtain a levy clearance certificate from the body corporate that is needed before transfer of ownership to a buyer can be registered.<\/p>\n

In these cases, special arrangements would have to be made with both the buyer and the body corporate if the seller wanted to deviate from this procedure.<\/p>\n

“Now, though, the STSMA stipulates that when a unit is sold, the new owner (successor in title) automatically becomes liable for the pro-rata payment of any special levy amount outstanding, from the date when change of ownership is registered,” he said.<\/p>\n

“So if the special levy is payable in 12 monthly instalments, for example, and the seller has only paid three of these by the time the unit is transferred, the body corporate is entitled to recover the remaining nine from the buyer.”<\/p>\n

\u201cThis can obviously become quite a contentious issue, especially if the special levy is imposed after the unit is sold but before the buyer has taken transfer, or very shortly after transfer has taken place, with the new owner feeling aggrieved about having to pay for events that may well have occurred before he even signed the sale agreement,” Schaefer said.<\/p>\n

What is more, the seller who is aware that a new special levy is imminent and deliberately denies this fact or fails to disclose it to the buyer before the offer to purchase is signed could find himself liable to the buyer for a \u201clatent defect\u201d, in much the same way as if he had deliberately concealed known physical defects in the property, he said.<\/p>\n

“For this reason, all parties involved in the sale of a sectional title home need to ensure that the sale agreement contains a clause that stipulates exactly who will be responsible for the payment of both ordinary levies and any special levy instalments that may already be due or become due after either the date of occupation or the date of transfer.”<\/p>\n

\n

Read: South Africans living in complexes are being forced to pay a new levy \u2013 for a service they don\u2019t want to use<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

South Africans living in complexes and other sectional title schemes are being blindsided by ‘special levies’. <\/p>\n","protected":false},"author":10,"featured_media":103729,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[26,12464],"class_list":["post-278099","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-headline","tag-trafalgar"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/278099","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=278099"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/278099\/revisions"}],"predecessor-version":[{"id":278561,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/278099\/revisions\/278561"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/103729"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=278099"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=278099"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=278099"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}