French journalist, writer and politician, Françoise Giroud once said: “Nothing is more difficult than competing with a myth.” While the wise lady certainly had a point, I welcome the challenge to “bust” some common sectional title related myths by using the ultimate weapon in the battle against myth: fact.
In last month’s Paddocks Press article, we investigated certain myths that we often come across in practice, namely that the owner who caused damage to a unit is liable for the insurance excess payable to get the unit fixed; that owners may withhold their and their tenants’ personal information to protect their privacy and that owners have an unqualified right to deny others access to their private property – all of which were proved to be popular, but false statements often made by members of bodies corporate. In this article, we will take a closer look at 2 more common myths body corporate members tend to swear by.
- “The trustees need my consent to raise a special levy.”
As members’ contributions are based on budgets duly approved by ordinary resolution, it comes as no surprise that most members assume that the raising of special contributions would require their consent too. However, this myth is busted by section 3(3) of the Sectional Titles Schemes Management Act (“the Act”), which reads as follows:
“Any special contribution becomes due on the passing of a resolution in this regard by the trustees of the body corporate levying such contribution and may be recovered by the body corporate by an application to an ombud, from the persons who were owners of units at the time when such resolution was passed: Provided that upon the change of ownership of a unit, the successor in title becomes liable for the pro rata payment of such contributions from the date of change of such ownership.”
This section of the Act makes it abundantly clear that the only people who have to agree to the raising of a special contribution (or “special levy” as it is commonly referred to) are more than half of the trustees serving on the board at the time. Their power to raise such contribution is qualified only by the fact that the special contribution needs to be required to cover a necessary expense that cannot reasonably be delayed until it can be included in the next financial year’s budget, but this function remains squarely within the trustees’ power and does not require the approval of any member.
- “I did not agree to the interest charged on my overdue levies, therefore I do not have to pay it.”
This ever-popular myth is often used as a shield by owners who find themselves in arrears with their contributions payable and feel overwhelmed by the addition of interest to their already sizable debt owed to the body corporate. Popular as it may be, this myth is busted by Prescribed Management Rule 21(3)(c), contained in Annexure 1 to the Regulations to the Act, which reads as follows:
“The body corporate may, on the authority of a written trustee resolution charge interest on any overdue amount payable by an member to the body corporate; provided that the interest rate must not exceed the maximum rate of interest payable per annum under the National Credit Act (2005) Act No 34 of 2005), compounded monthly in arrears;”
The decision to charge interest on any overdue amount therefore lies solely within the powers of the trustees and no owner’s consent needs to be obtained in order for the body corporate to legally charge the agreed upon interest. While this myth does not provide a valid argument against the charging of interest by the body corporate, there may be others. For example, if the trustees failed and/or neglected to pass and sign an ordinary written resolution authorising the charging of interest, or they are charging interest exceeding the maximum rate prescribed in the National Credit Act, such interest is not being validly charged.
What I find interesting about both myths unpacked above is that they are often utilised when members of the body corporate feel that the trustees’ actions are somehow unfair or illegal and, while the arguments above are pure myth, there are other valid, legal arguments against these actions in certain circumstances. For example, it is illegal for trustees to raise a special levy if the expense they intend to cover with such levy is not necessary or if they are charging interest on your overdue amounts owed to the body corporate without the necessary written trustees resolution.
When you suspect that the trustees are acting unfairly or illegally, refrain from grabbing at common myths and rather turn to the Act to find the protection you desire. Should you require any assistance with this, contact us at consulting@paddocks.co.za for a no-obligation quote.
Article reference: Paddocks Press: Volume 14, Issue 01.
Specialist Community Scheme Attorney (BA (Law) LLB), Ané de Klerk, combines her work experience as a Portfolio Manager with knowledge of conveyancing and community scheme law.
This article is published under the Creative Commons Attribution license.
Recent Posts
Recent Comments
- Graham Paddock on Body Corporate Functions: Insurance
- Graham Paddock on Spending body corporate funds
- Graham Paddock on The Levy Clearance Certificate: The Body Corporate’s Cheap & Effective Weapon
- Graham Paddock on The benefits of online sectional title meetings
- Heinz Wiesner on The benefits of online sectional title meetings
Archives
- January 2025
- December 2024
- November 2024
- October 2024
- August 2024
- July 2024
- June 2024
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- March 2009
- February 2009
- February 2008
- February 2007
2 Comments.
Very clearly & succinctly written
Great article!! Here is a myth that I’ve heard. The story goes along the lines of the owner was asked to sort out a leak in her unit by the Body Corporate. The owner first ignored the request, then told the Body corporate that she will attend to it within the next week as her preferred plumber was not available. The leak was so bad by this time that it was causing damage to the unit below and needed to be repaired urgently. Body Corporate, got a plumber in to fix the leak and sent her the bill, which she now refuse to pay and says the Body Corporate Illegally entered her unit. I’m sure you can shorten this story. 🙂