When do the levies of a sectional owner increase after an extension of their unit?
"I live in a sectional title scheme and pay levies according to the participation quota of my unit. However, a number of unit owners have recently extended their units and although the body corporate has approved such extensions, I know the sectional plans have not been amended. So now although their units are larger the owners are still paying the same levies. When must the body corporate increase their levies?"
In terms of the Sectional Titles Schemes Management Act 8 of 2011 a body corporate has to perform certain functions. One of these functions is to ensure that reasonably sufficient funds are available for the maintenance, repair and management of the common property.
Another function is to require owners of the sectional titles, whenever necessary, to make contributions to the fund by means of levy payments. Such contributions are determined by requiring the payment of levies from the owners in the sectional title scheme in proportion to the quotas of their respective sections, termed their participation quota. Accordingly, if a unit is extended, this should lead to an amendment of that unit's participation quota and consequently the levy amount to be paid by the unit owner.
The question though is when does such an adjusted levy become payable. In a recent Western Cape High Court case, the court found that such increased levies will only apply after the registration of the sectional plans of extension at the Deeds Office, and specifically only from the date of registration thereof.
Accordingly, even if units have been extended and the owners of those units should technically be paying an increased levy, such increased levies will only be enforceable from the date of registration of the extensions in the Deeds Office. However, nothing prohibits the body corporate from entering into agreements with the owners of the extended units in order to increase their levies before the date of registration of the sectional plans of extension.
In terms of the Sectional Titles Schemes Management Act 8 of 2011 a body corporate has to perform certain functions. One of these functions is to ensure that reasonably sufficient funds are available for the maintenance, repair and management of the common property.
Another function is to require owners of the sectional titles, whenever necessary, to make contributions to the fund by means of levy payments. Such contributions are determined by requiring the payment of levies from the owners in the sectional title scheme in proportion to the quotas of their respective sections, termed their participation quota. Accordingly, if a unit is extended, this should lead to an amendment of that unit's participation quota and consequently the levy amount to be paid by the unit owner.
The question though is when does such an adjusted levy become payable. In a recent Western Cape High Court case, the court found that such increased levies will only apply after the registration of the sectional plans of extension at the Deeds Office, and specifically only from the date of registration thereof.
Accordingly, even if units have been extended and the owners of those units should technically be paying an increased levy, such increased levies will only be enforceable from the date of registration of the extensions in the Deeds Office. However, nothing prohibits the body corporate from entering into agreements with the owners of the extended units in order to increase their levies before the date of registration of the sectional plans of extension.
Source: Seymore duToit & Basson inc.
28 Oct 2019
Author Pierre
Author Pierre
