
Raising a special levy
Both the Sectional Titles Act and the prescribed rules leave the decision to raise a special levy to the sole discretion of the trustees. The Act says a special contribution, “becomes due on the passing of a resolution in this regard by the trustees” and the rule says “The trustees may . . . make special levies upon the owners”. It would be possible for owners to agree to fund an expense that they as a body must approve – such as an improvement to the common property – by special levy, but ordinarily owners don’t have a say, they must just pay.
Two requirements for trustees’ raising a special levy
The legislation does however make the trustees’ power to raise a special levy conditional on two requirements. The first is that the special levy must be necessary and the second is that a special levy cannot be raised to pay an expense that was already included in the budget approved at the last AGM. Necessary means that a special levy can’t be raised for an expense that can wait for inclusion in the budget for the next financial year. The budget restraint means that a special levy can’t be used, for example, to pay a maintenance expense because maintenance must be included in the budget. Special levies are for emergencies!
Liability provisions
The liability provisions for paying a special levy are slightly different to the provisions that govern the liability for the ordinary levy. The persons who are the registered owners of units in the scheme on the date the trustees raise the levy, whether it is the annual levy or a special levy, are liable to pay that levy. However, when a unit is transferred, the liability for the annual levy shifts pro-rata from the person who was owner at the time of the trustees’ resolution to the new owner.
The same is not true for the liability for a special levy, though. If a special levy is running at the time a unit is sold, the selling owner must complete the payment of the special levy before transfer of the unit to the new owner. An alternative could be an arrangement in the sale agreement that accommodates payment of the special levy. And the body corporate must be happy with the arrangement because that is a condition for the issue of a levy clearance certificate.
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
8 Comments.
Hi, Can a special levy be implemented after the work has been completed? For example, the block is painted and months later at the next AGM a special levy is implemented to pay for the completed work. Should the special levy not have been implemented BEFORE the paint job started?
Dear Adam,
Thank you for your comment. We are more than happy to help, however we do not give free opinions / advice. Please email us on consulting@paddocks.co.za with regards to your matter, and we can provide you with a no-obligation quote, so that we can assist you. Alternatively, join us on http://www.paddocks-club.co.za.
Kind regards,
Paddocks
Criteria and requirements to institute legal action against a member (owner) of a body corporate in a sectional title scheme to collect arrear levies and the funding of the legal costs thereof.
Good Day,
I bought a unit and I was not aware of special levy at the time of purchase. On my first statement I realize the special levy which was raised before the time of purchase/transfer in to my name. Since then(5/05/2017) I’ve been disputing that special levy is not my responsibility but the previous owner. I have consulted a lawyer too but the also said it will passes to me according to legislation 3(3) of the body corporate law. I’ve been summons and charged interest on all those amounts which I was disputing. According to what I read in above It is not my responsibility. Please kindly advise and I would be happy to use your service it this the case and I in fact have a case.
Hi Kami
Thank you for your comment. We would love to help but unfortunately do not give free advice. Here’s how we can help:
– We offer a Free Basics of Sectional Title 1-week short course. You’ll be able to ask your course instructor any related questions. Find out more here.
– We offer consulting via telephone for R390 for 10 minutes. Please call us on +27 21 686 3950.
– We have Paddocks Club, an exclusive online club, to help you get answers to your questions about community schemes. Find out more here.
Kind regards
Paddocks
Good day, I would like to know if the special levy can be raised for paying the Council’s service that the owners have already paid for to the managing agent, due to the managing agent did not pay the Council?
Good morning. A special levy was raised to sort out our water account that was in arrears with about R140000 at the Minicipality. The money was paid , and a few months later it was found that the municipality, made a mistake and the money was paid back into the reserve fund of the trustees account. My question. Should that money not be paid back to the owners , seeing that the money raised for this issue was not utilized for its intended purpose
Hi Leonard,
Thank you for your comment. Please note that our legal team would need to advise you on your query. Please email consulting@paddocks.co.za and the team will provide a no-obligation quote for their assistance.
Kind regards
Paddocks