Homes built in an estate are generally managed by a Body Corporate which requires home owners to pay levies. These levies fund the day-to-day maintenance and management of the Estate.
Levies pay for:
- Estate management
- Maintenance team salaries
- 24 hour security and electric fencing
- Generators where applicable
- Refuse collection
- Maintenance for common property
- Access control
- Surveillance camera’s
- Insurance of the common property
- Building insurance for sectional title units.
Levies do not cover any maintenance which fall within the area of an owner’s individual unit. For example, if a unit has a damaged wall inside the unit, or a leaking pipe, it is the owner’s responsibly to resolve the problem. Each owner is responsible for all necessary maintenance within their own unit.
All requests from owners in the estate that involve costs (may it be upgrading, repairing common property) are paid by the levy contributions. If homeowners do not pay levies, this hinders the upkeep of the estate and those paying are affected.
Sectional Title Reserve Fund:
Sectional title owners are used to contribute levies towards the body corporate’s administration fund, to cover the estimated annual operating costs for repair, maintenance, management and administration of the common property, including reasonable provision for future maintenance and repairs of the common property. This has not changed.
In terms of section 3(1)(b) of the Sectional Titles Schemes Management Act 8 of 2011 and Regulations, which came into operation on 7 October 2016, a body corporate has the duty to establish and maintain an additional fund, a reserve fund, sufficient to cover the cost of future maintenance and repair of the common property. As the administration fund already makes provision for estimated costs for repairs and maintenance, the purpose of the reserve fund is to make provision for unforeseen costs of maintenance and repairs, which have not been budgeted for.
The Act authorises a body corporate to collect these contributions from the unit owners, whenever necessary.
The Act and Regulations do not prescribe the minimum value of a reserve fund. It is determined in the Act that the reserve fund should be “reasonably sufficient to cover the cost of future maintenance and repairs of the common property (for the coming financial year)”.
What if I refuse to pay levies?
A debt collection process will be implemented if levy payments are not received on time. Withholding levy payments is not a solution to anything. Trustees will have to take action against those who do not pay with all the tools they have, including applying for a Section 66. This gives Trustees authorisation to sell the unit in execution to recoup the unpaid levy amounts.
Annual AGM’s give you the opportunity to dispute, question or query any levy contributions. Please look out for these notices ahead of time