By Jennifer Paddock


Liability for a special levyQ1: Who is liable for the special levy that was raised? Does the seller pay all upfront and does the new owner also have to pay this special levy?

A1: The answer to your question depends on who owned the unit at the time the special levy was raised. According to the Sectional Titles Act, 1986 (the Act) levies are due and payable on the passing of a resolution to that effect by the trustees of the body corporate and may be recovered from the persons who were owners of units at the time when the resolution making the levies due and payable was passed. This means that the person who owned the unit when the levy became due and payable is the only person from whom the body corporate may legally recover the levy.This can become a contentious issue when a special levy is raised and becomes due and payable after an owner has sold his unit but before the transfer of ownership has taken place. As soon as the unit has been transferred from the seller to the purchaser the seller may believe that he is not liable to pay the special levy because he is no longer the owner of the unit. But because the seller was the owner at the time the special levy was raised and became due and payable, the body corporate is legally entitled to recover that special levy only from the seller and has no legal entitlement to recover the special levy from the purchaser as the new owner. Similarly, if the day after transfer has occurred a special levy is raised for something that occurred ‘before the purchaser’s time’ – the purchaser as the owner at the time the special levy was raised and became due and payable is liable to pay the special levy.

To avoid disputes arising regarding levy liability, the seller may assign his levy liability obligations to the purchaser with effect from the date of transfer. Strictly speaking, the seller and the purchaser are not able to conclude such an agreement on their own. The body corporate must accept the benefits of such an agreement, releasing the seller from his statutory obligation and acquiring a contractual right to recover the outstanding levies from the purchaser. This can be achieved by way of a “tripartite agreement” entered into by the seller, purchaser and body corporate.

Removal of a chairperson

Q2: I would like to know the correct procedure for removing a chairperson and removing him from the trustees. I have valid proof for reasons to remove him for autocratic / dictatorial behaviour, not performing assigned tasks or ensuring that the maintenance and safety of the complex is completed. He has victimized people and is not enforcing rules with regard to the Act. Thank you.

A2: The chairperson of a sectional title scheme can be removed in one of two ways, either by majority vote of the trustees at a trustee meeting or by ordinary resolution (majority vote) of owners at a general meeting of the body corporate – provided that the intention to vote upon this removal has been disclosed in the notice calling the meeting.

Removal of the chairperson from the office of chairperson does not automatically remove him/her from the office of trustee. A trustee may be removed from office by ordinary resolution at a general meeting of the body corporate, provided again that the intention to vote upon this removal has been disclosed in the notice calling the meeting.
So in the situation you describe, where you would like to remove the chairperson from the offices of both chairperson and trustee, this would best be done by the body corporate in general meeting taking an ordinary resolution to the effect that the chairperson is removed from both offices. The intention to vote upon the removal of the chairperson from both offices would have to be disclosed in the notice calling the meeting for the removal to be valid.
The general meeting will need to be called by the trustees. You do not mention in your question whether or not you are a trustee. If you are and your co-trustees support you in your initiative – the trustees can call a special general meeting for this purpose. But if the trustees do not support this initiative and you are not a trustee, then you would have to rally the support of owners holding 25% of the quotas in the scheme and request in writing that the trustees call a meeting for this purpose. If the trustees fail to do so within 14 days of the request then the owners concerned will be entitled to call the meeting themselves.Trustee indemnity

Q3: What is the trustee indemnity? How does this indemnity work?
A3: Prescribed management rule 12 provides that every trustee, agent or other officer or servant of the body corporate shall be indemnified by the body corporate against all costs, losses, expenses and claims which he may incur or become liable to by reason of any act done by him in the discharge of his duties, unless such costs, losses, expenses or claims are caused by the mala fide or grossly negligent act or omission of such person.The indemnity is payable out of the funds of the body corporate.

According to Professor CG van der Merwe, the indemnity qualifies the strict fiduciary duty imposed on a trustee by virtue of the fact that he is entrusted with the management of the affairs of another. This indemnity was presumably inserted in the prescribed rules to encourage persons to act as trustees.

Section inspections
Q4: Does a building manager have the right to enter and inspect a privately owned apartment in a sectional title scheme without consent from the owners, especially if the owners are living there at the moment?A4: In terms of section 44(1)(a) of the Sectional Titles Act, 1986 (the Act) an owner in a sectional title scheme must permit any person authorized in writing by the body corporate, at all reasonable hours to enter his/her section or exclusive use area for the purposes of inspecting it and maintaining, repairing or renewing pipes, wires, cables and ducts existing in the section and capable of being used in connection with the enjoyment of any other section or common property, or for the purposes of ensuring that the provisions of the Act and the rules are being observed. The owner is however entitled to reasonable notice of the inspection except in the case of an emergency in which case no notice is required.

So if the building manager has been authorised in writing to inspect an apartment then he is entitled to do so at all reasonable hours for the reasons set out above. But the owner of the apartment is entitled to reasonable notice of the inspection, except in the case of an emergency.

Article reference: Volume 5, Issue 3, Page 6
This article is published under the Creative Commons Attribution license.