Global pandemic does not automatically exclude you from Community Scheme levies

The pandemic continues to bite hard on consumers and businesses and is set to be with us for a while still. While countries across the globe are coming to terms with relaxing restrictions in their own ways, South Africans are still reeling from the effects of COVID-19.

The question in community schemes, often asked, is whether or not levies are still payable, especially as homeowners struggle through job losses and reduced income resulting from the lockdown.

Managing director of property managers WatchProp, Craig Coetzee, says that the short answer is yes. He provides some detail with regards to legislation that governs community schemes and levy payments.

The payment of levies is legislated in the Sectional Title Schemes Management Act. Section 3(1)(c) states that contributions (levies) are to be paid by owners in a body community scheme. Sanctions for non-payment are left for decision by the trustees and can result in exclusion from voting at the AGM (subject to a Court order or adjudication order having been issued against such an owner in arrears; however, they are allowed to vote at a special general meeting). The trustees may also invoke more stringent measures to recover levies from non-paying owners in terms of an approved arrears management process.

Why are levy payments vital in community schemes?

Coetzee says levies, paid by each owner in a community scheme, generally on a monthly basis, are to cover expenses related to common property. This includes expenses such as electricity, water, gate expenses, day to day maintenance, financial and administration costs.

Levy payments are placed in an administrative fund and a reserve fund. The administrative fund is for the payment of day-to-day expenses while the reserve fund is for the payment of future maintenance costs as defined in the maintenance plan. Unexpected costs may also be drawn from the reserve fund.

Special levies may be raised to cover unforeseen, necessary costs that cannot be delayed.

Lockdown does not mean levy payments are on hold.

COVID-19 and the resultant lockdown led to an increase in job losses and in many cases significant pay cuts, which still affect homeowners and tenants and their ability to meet their commitments.

Coetzee further says that owners are obligated to pay levies in full at all times, irrespective of disputes, which can be challenged through the right channels including the Community Schemes Ombud Services (in the event of a dispute) or relevant court. Failure to pay constitutes a breach in terms of the agreement between the homeowner and the community scheme. So, levy contributions remain payable as directed by the community scheme, despite the difficult circumstances homeowners and tenants face due to the pandemic,

Coetzee says it is advisable to contact the managing agent of the scheme or trustees when faced with a struggle to meet the payment obligation. In nearly all cases, these challenges are resolved amicably with some relief options, if any, available to suit the owner or tenant, such as a suitable payment holiday or repayment plan.

It is important to note that failure to seek assistance results in the probability that the body corporate could institute legal action to recover the outstanding debt.

WatchProp can be contacted on 021 914 6660 or email info@watchprop.co.za.