Philip John Badenhorst – Candidate Legal Practitioner

Richards Attorneys

______________________________

 

The purpose of this article is to provide an overview on the process followed to collect outstanding levies from members to a Sectional Titles Schemes as outlined in the Sectional Titles Schemes Management Act 8 of 2011 and the Sectional Titles Schemes Management Regulations of 2016.

What happens if a member fails to pay the levies timeously?

In terms of regulation 25(1) of the Sectional Titles Schemes Management Regulations (hereinafter the “Regulations”) the Body Corporate must within 14 days, after the approval of the budgets at the Annual General Meeting, give each member written notice of the contributions and charges due and payable by such member to the Body Corporate. This notice must:

  • state that the member has an obligation to pay the specified contributions and charges;
  • specify the due date for each payment;
  • if applicable, the interest rate payable on overdue contributions; and
  • include details on the dispute resolution process to be followed on disputed contributions and charges.

 

If the contributions and charges is not paid by the member on the date specified in terms of the above notice the Body Corporate must in terms of regulation 25(2) send out a notice that states the following:

  • that the member has an obligation to pay the overdue contributions and charges and the applicable interest immediately;
  • if applicable, the interest that is payable in respect of the overdue contributions and charges at the date of this notice as well as the amount of interest that will accrue daily until these overdue contributions and charges have been paid; and
  • that the Body Corporate intends to take legal action to recover the overdue amount if it is not paid within 14 days after the notice has been given.

 

The notice in terms of regulation 25(2) is also referred to as the letter of final demand and it is usually sent by a law firm. It is important to mention that although it is not compulsory in terms of the Sectional Titles Schemes Management Act (hereinafter “the Act”) the Body Corporate will first send out 3 notices to the member requesting payment of the overdue contributions and charges. If the member then still fails to pay these overdue contributions to the Body Corporate the member will be handed over for legal action where the above notice in terms of regulation 25(2) will then be sent out.

This notice in terms of regulation 25(2) is the start of legal proceedings against the member. Once 14 days have lapsed to settle the arrears in terms of the regulation 25(2) notice a combined summons will be issued at court and be served on the member by the sheriff at the member’s domicilium citandi et executandi, which is the section in the Sectional Title Scheme registered in the member’s name. The member then has 10 days, from date of service by the sheriff, to defend the action. If the member defends the action it is advisable to get legal advice since the process of civil litigation will be followed. If the member does not defend the action, a Request for Default Judgement will be filed at court. A Magistrate will consider the facts and either grant the judgement or raise a query to get clarity on any uncertainties that may arise. A reply to the Magistrate’s query will be drafted and filed at court. If the uncertainties raised have been answered to the satisfaction of the Magistrate, judgement will be granted against the member. Once judgement has been granted a warrant of execution against movable property will be issued and served on the member by the sheriff. The warrant of execution against movable property will enable the sheriff to determine if the member has sufficient movable property to cover the judgement debt. If the member has sufficient movable property such property will be sold in a sale in execution held by the sheriff, alternatively an application will be brought to attach the unit and have it sold to settle the outstanding amount.

If at any point during the legal process a member settles the overdue contributions and charges the legal process will be stopped.

It is important to take note of Regulation 25(4) which determines that a member is liable for and must pay to the Body Corporate all reasonable legal costs and disbursements, as taxed or agreed upon by the member, which was incurred by the Body Corporate to collect the overdue contributions and charges or any other arrear amounts due and owing by such member to the Body Corporate.