Body Corporate Special Levy

[boswald]

Hi Guys,

Wanted to know if anybody has some insight to this.

I have been in my complex for about 1.5 years now. Last month we were advised that there was a requirement for a special levy since somehow our estate municipality bill had hit a unpaid bill of just under 2 million.

1. Can the BC force owners to pay a special levy?
2. If we want to know who has paid and who has not can we ask this?
3. Clearly this amount has been building up and as a "new" owner, should I be just as responsible as anybody else to reduce this debt?

Thanks
B.

 

[Jladan]

Hmmm I would definately ask for full details of how this bill came about. As a member u have full rights to all financials etc of your complex. By the looks of things either whoever runs your finances has stuffed something up or some people have not been paying levies. I would insist on remedy from them first if that is the case.

Also if I understand correctly a special levy can only be implemented at an AGM or special meeting where a properly constituted quorum of members is present. At this meeting all of your questions should have been answered. I would def check if this meeting happened, if it did were u invited to attend?

 

[Mars]

Hi Guys,

Wanted to know if anybody has some insight to this.

I have been in my complex for about 1.5 years now. Last month we were advised that there was a requirement for a special levy since somehow our estate municipality bill had hit a unpaid bill of just under 2 million.

1. Can the BC force owners to pay a special levy?
2. If we want to know who has paid and who has not can we ask this?
3. Clearly this amount has been building up and as a "new" owner, should I be just as responsible as anybody else to reduce this debt?

Thanks
B.

Yes, yes and yes unfortunately. However the real question is how did it get into this position in the first place? How many units in the complex?
Also has anyone checked that the figures are accurate?

 

[boswald]

Hmmm I would definately ask for full details of how this bill came about. As a member u have full rights to all financials etc of your complex. By the looks of things either whoever runs your finances has stuffed something up or some people have not been paying levies. I would insist on remedy from them first if that is the case.

Also if I understand correctly a special levy can only be implemented at an AGM or special meeting where a properly constituted quorum of members is present. At this meeting all of your questions should have been answered. I would def check if this meeting happened, if it did were u invited to attend?

There was a meeting, but unfortunatly my wife went into labour that night so we rushed off to the hospital Bad timing, I know

 

[Jladan]

Hmmm if a properly held meeting with the required number of people present consented to this I'm afraid you are prettty much screwed. This is one of the downsides of sectional title

I would still ask for the details tho

 

[noxibox]

That's the downside of sectional title. In my opinion there aren't really any major upsides to it.

Definitely find out how they let this happen. I know some managing companies like Propel deliberately allow this to happen to get the body corporate into debt they can't get out of.

 

[chrisc]

The chairman of the body corporate should provide you with a list of the sectional titles, the levies for each of the titles and the payment history of each title. I have a flat in a similar building and the trustees keep a keen eye on the defaulters and slow payers and don't let them get into more than 3 months in arrear. The again, the managing agents are helpful too, they will notify the chairman if a particular section owner is not paying, or messing about (including inviting "ladies" into his flat at night). I mean you can't stop hanky panky but you don't want undesirabes wandering about the corridors.

I would approach the chairman first. It may be they have been soft on debt collection and you will be able to identify who it is who has not been paying. Then you can approach a debt collector or a kneecapper who will apply suitable pressure on the defaulters

 

[Billy]

The chairman of the body corporate should provide you with a list of the sectional titles, the levies for each of the titles and the payment history of each title. I have a flat in a similar building and the trustees keep a keen eye on the defaulters and slow payers and don't let them get into more than 3 months in arrear. The again, the managing agents are helpful too, they will notify the chairman if a particular section owner is not paying, or messing about (including inviting "ladies" into his flat at night). I mean you can't stop hanky panky but you don't want undesirabes wandering about the corridors.

I would approach the chairman first. It may be they have been soft on debt collection and you will be able to identify who it is who has not been paying. Then you can approach a debt collector or a kneecapper who will apply suitable pressure on the defaulters

If you read the post it is a Municipal bill. Tshwane suffered a spate of water meters not being read a couple of years ago. Our complex negotiated payment terms rather than a special levy.

Make sure that your Body Corporate checks the meters regularly to avoid this sort of problem in future.

 

[Venomous]

They may only impose a special levy at an AGM or SGM(special) otherwise their special levy will/can land them in hot water..

I would suggest:
1. The bill should be queried (detailed statements of bills & payments)
2. Possibly have the books audited by am independent company.
If the managing agents have been mismanaging the complex funds they can be sued for the ''gone'' money(if there is such a suspision)

 

[creeper]

Hi Guys,

Wanted to know if anybody has some insight to this.

I have been in my complex for about 1.5 years now. Last month we were advised that there was a requirement for a special levy since somehow our estate municipality bill had hit a unpaid bill of just under 2 million.

1. Can the BC force owners to pay a special levy?
2. If we want to know who has paid and who has not can we ask this?
3. Clearly this amount has been building up and as a "new" owner, should I be just as responsible as anybody else to reduce this debt?

Thanks
B.

1.yes
2.yes
3. No

Body corporates can add a special levy it is written in the section title ac. Itis important to request there financials.

 

[noxibox]

The again, the managing agents are helpful too, they will notify the chairman if a particular section owner is not paying, or messing about (including inviting "ladies" into his flat at night). I mean you can't stop hanky panky but you don't want undesirabes wandering about the corridors.

What Propel do is quite sneaky. They collect the levies and fund any unpaid levies themselves. They keep doing this until the body corporate has effectively built up a large debt to Propel, which allows Propel to keep the body corporate locked in and they add interest to the 'loan' as well further increasing the debt. I've seen them let owners get years behind with levies.

 

[Brieuse]

Hmmm if a properly held meeting with the required number of people present consented to this I'm afraid you are prettty much screwed. This is one of the downsides of sectional title

I would still ask for the details tho

The trustees can decide on the special levy without the other owners.

In addition to the levies determined after an annual general meeting the trustees may, when necessary, require owners to pay special levies. They can call on owners to make special contributions for any common expense that was not included in the estimate of expenses approved at the last annual general meeting. If the trustees resolve that a special levy is payable by owners, they may determine whether it is payable in one lump sum or in installments.

The trustees do not have the power to raise a special levy when a budgeted expense exceeds the estimate approved at the last annual general meeting. They can only raise a special levy for unexpected expenses that were not included in the budget. While they can allow owners to pay a special levy in a number of installments they cannot provide for an ongoing special levy that runs concurrently with ordinary levies over an extended period.

 

[Brieuse]

They may only impose a special levy at an AGM or SGM(special) otherwise their special levy will/can land them in hot water..

I would suggest:
1. The bill should be queried (detailed statements of bills & payments)
2. Possibly have the books audited by am independent company.
If the managing agents have been mismanaging the complex funds they can be sued for the ''gone'' money(if there is such a suspision)

An AGM or SGM is not required for the trustees to raise a special levy.

The municipal account should have fallen under the budget approved at the AGM, as such the trustees are not allowed to raise a special levy for it.

Unless,

It can be argued that an extraordinary circumstance caused the municipal account to reach an unexpected amount.

 

[Brieuse]

3. Clearly this amount has been building up and as a "new" owner, should I be just as responsible as anybody else to reduce this debt

If the clearance was issued without a clause stating the previous owner is responsible, then the current owner is responsible.

 

[boswald]

Thanks for all the help. Guess I got to sit back take it like a man and hope things get sorted

Sent from my MB525 using Tapatalk

 

[Tigerman]

Advice for buying sectional title units

Bit late to put in my two penny's worth but .....

Buying into Sectional Titles units is like living next door to your mother-in-law live - constant conflict and interference. A bit of caution for would-be buyers, though. If you're seriously opting to buy a unit, BEFORE you make your offer-to-purchase, you MUST insist on:

1. Copy of the most recent audited financial statements (previous year year would be useful too);
2. Copy of the house/body corporate (BC) rules to see if you can live with the conditions. If you're not happy with some e.g. pet etc, ask if they may be waived or relaxed. Ito the law, no reasonable request can be refused once you're an owner.
3. An inspector's report of the structural soundness of the unit (same applies to all property purchases). You might have to pay someone to do this for you. In the past the seller had to supply an electrical clearance certificate.
4. After scrutinising the AFS (ask an accountant if its Greek to you) to determine the financial management soundness of the BC, ask about unrecorded or contingent liabilities (eg the debt mentioned at the start of thread, litigation etc), provisions (eg. new building or maintenance work or other costs contemplated within the short-medium i.e. 0-2 years) and the need to raise special levies in the near future.

If the BC's financials or any aspect of the management are in a mess or troublesome, WALK AWAY, WALK AWAY! If the queries in point 4 above appear clear, get a written confirmation of this from the BC. If they hassle, make excuses or won't give you the info, WALK AWAY. You're the buyer and have that right.

If you're happy and think you'll buy, get an written exemption from the BC for special levies for a minimum of 18 months from date of transfer. This should protect you from paying levies for a past event that you had no responsibility for. If they've given a written undertaking (verbal is not worth the paper its written on) and you buy but there is a problem afterward, you have a civil claim against the BC.

People don't pay attention or simple things or all the advice out there and often land up in situations they can avoid. Sh*t still happens, but we can minimise it by being careful.

 

[GPSJane]

Please don't just sit back - get involved and ask questions. Take a look at the accounts and find out why the BC owe so much money to the municipality.

Pay the special levy but make sure that non-payers pay their levies. Use a managing agent and their lawyers to get the money and get tough with the people.

Also, if the reason you suddenly owe money is because of people not paying levies that means the people managing the complex and money have not been doing a good job. Do not be afraid to change managing agents - you have every right. Do not be afraid to ask for all the accounts and to ask how this happened.

Remember you have every right to ask and to get the information you require. Remember also that you actually have a responsibility to be involved.

 

[Fuma]

I am in sectional title myself, and if I knew what I was getting myself into, I would have rented instead.

Make sure that the chairman is active/or get rid of him. You can get id of your property admin as well since he doesn't seem to be doing his job properly.

We are in the process of getting rid of HUURKOR in PTA.

 

[Jongi]

The again, the managing agents are helpful too, they will notify the chairman if a particular section owner is not paying, or messing about (including inviting "ladies" into his flat at night). I mean you can't stop hanky panky but you don't want undesirabes wandering about the corridors.

What Propel do is quite sneaky. They collect the levies and fund any unpaid levies themselves. They keep doing this until the body corporate has effectively built up a large debt to Propel, which allows Propel to keep the body corporate locked in and they add interest to the 'loan' as well further increasing the debt. I've seen them let owners get years behind with levies.

The BC is at fault as they should be receiving monthly statements and adjusting accordingly.

 

[Jongi]

Hmmm if a properly held meeting with the required number of people present consented to this I'm afraid you are prettty much screwed. This is one of the downsides of sectional title

I would still ask for the details tho

The trustees can decide on the special levy without the other owners.

In addition to the levies determined after an annual general meeting the trustees may, when necessary, require owners to pay special levies. They can call on owners to make special contributions for any common expense that was not included in the estimate of expenses approved at the last annual general meeting. If the trustees resolve that a special levy is payable by owners, they may determine whether it is payable in one lump sum or in installments.

The trustees do not have the power to raise a special levy when a budgeted expense exceeds the estimate approved at the last annual general meeting. They can only raise a special levy for unexpected expenses that were not included in the budget. While they can allow owners to pay a special levy in a number of installments they cannot provide for an ongoing special levy that runs concurrently with ordinary levies over an extended period.

Special general meeting or extraordinary general meeting required for a special levy. Unless the complex rules have been changed to give the trustees carte blanche.

What it generally means is that it is better to buy into a complex with few members. People have less room to hide and delinquency is easier to see. I would never buy into a complex with more than 50 units max. Hopefully closer to 20.