The Sectional Titles Schemes Management Act, 2011 (STSMA) places various obligations on the Trustees of the Body Corporate as to how to properly raise levies and how to notify owners. 

A failure by a Body Corporate to raise levies and comply with the obligations listed in the legislation below can have disastrous consequences for the Body Corporate as a Court may rule that the levies have not become due, owing, and payable and that the owner does not have to make payment.

This can further result in the levy obligation of the particular owner prescribing in which case the Body Corporate can lose its claim against the owner completely.

STSMA references to raising levies

The STSMA in Section 3(1)( e) states that a Body Corporate’s functions include “to determine the amounts to be raised for the purposes of the administrative levy fund and the reserve levy fund”.

Section 3(1)(f) of the STSMA states that it is a Body Corporate’s function “to raise the amounts so determined by levying contributions on the owners in proportion to the quotas of their respective sections”.

Section 3(2) of the STSMA states that “liability for contributions…accrues from the passing of a resolution to that effect by the Trustees of the Body Corporate…”.

Section 3(5) of the STSMA provides that “the body corporate, must annually or whenever there is a change in levy, certify in writing:

1. the amount determined as the contribution of each owner;
2. the manner in which such contribution is payable; and
3.  the extent to which such contribution has been paid by each owner”.

The Regulations to the STSMA and specifically Annexure A of the Prescribed Management Rules (PMRs), in PMR 25(1) states that “the body corporate must, as soon as possible but no later than 14 days after the approval of the budgets referred to in rule 17(6)(j)(iv) by a general meeting, give each member written notice of the contributions and charges due and payable by that member to the body corporate, which notice must-

1. a) state that the member has an obligation to pay the specified contributions and charges;
2. b) specify the due date for each payment; and
3. c) if applicable, state that interest at a rate specified in the notice which will be payable on any overdue contributions and charges; and
4. d) include details of the dispute resolution process that applies in respect of disputed contributions and charges”.

PMR 25(2) also states that “If money owing is not paid on the dates specified in the notice referred to in subrule (1) above that the body corporate must send a final notice to the owner, which notice must state-

1. that the member has an obligation to pay the overdue contributions and charges and any applicable interest immediately; and
2. If applicable: i) The interest that is payable in respect of the overdue contributions and charges at the date of the final notice; and ii) The amount of interest that will accrue daily until the payment of the overdue contributions and charges; and
3. The body corporate intends to take action to recover the amount due if the overdue contributions and charges and interest owing are not paid within 14 days after the date the final notice is given”.

The High Court, Johannesburg, during the latter part of 2021 was presented with appeals by three different Bodies Corporate from the Magistrates Courts, where Magistrates had refused to grant Bodies Corporate default judgments for arrear levies on account of the Bodies Corporate non-compliance with certain of the provisions set out above.

In all three cases, the Bodies Corporate had not sent out a PMR 25(1) and/or PMR 25(2) notice to the owner concerned as called for by the PMR’s.   In each of the cases, it was determined that the Body Corporate has an obligation and must send out the PMR 25(1) and (2) notices.

However, the three judgments also made clear that should the Body Corporate have failed to send out these notices but have properly passed a resolution raising levies on the owner, in terms of Section 3 of STSMA, that the Body Corporate is still entitled to judgement against the owner in respect of arrear levies.

Source:  Alan Levy Attornies, Notaries & Conveyancers (edited)

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