Occupation Levy

[James Cready]

Good day all
I have tried searching on the internet for information on "Occupation Levy" for a sectional title, but I have been unable to get the info I need. So if anyone has information on this I would appreciate. Perhaps it is sometimes called something else, so I will explain when "occupation levy" becomes due so you may identify it.

When an owner wants to extend a sectional title he needs to take a whole lot of steps which obviously include asking permission from the body corporate, getting municipal plans approved and registering the extension with the deed office. Now during the registration period (in other words, the body corporate agreed to the extensions and the municipality approved it, so basically the building is busy being erected and it will, in most cases, already stand whilst the registration with the deed office is still going on) such an owner is responsible for "occupation levy".

So my questions related to that is the following:
1. What is included in Occupational levy? Is the extended area covered by the insurance for instance?
2. Is the body corporate responsible for damages and maintenance to that extension when occupation levy is being paid?
3. Can you charge occupation levy on existing extensions which has not even been approved by the municipality? (nor given permission by the body corporate)
4. When you charge occupation levy, is it legal to inform the owner that, until the extension is lawfully registered, he may not be fully covered for damages on that extension or due to that extension, even though he is responsible for occupation levy? (reason we want to charge occupation levy is because some units are so much bigger now than it used to be, but those people are not paying any more levies than anyone else. Currently all the owners are actually paying levy on that as it is still part of common property)
5. Anything else I need to know about occupation levy?

Thank you
James

 

[WAslayer]

you might also get some answers from the following website dedicated to everything sectional title related..

http://www.sto.co.za/

 

[James Cready]

you might also get some answers from the following website dedicated to everything sectional title related..

http://www.sto.co.za/

Thanks. I will check it out. I have been to many of these types of site, unfortunately details on Occupation Levy etc is slim.

 

[Kosmik]

Sounds more like exclusive use area. A BC can use exclusive use areas as a means of charging a person more for their levies. Otherwise a standard levy is determined by the owners quotient in the sectional title scheme ie: 1/12 units.

 

[James Cready]

Sounds more like exclusive use area. A BC can use exclusive use areas as a means of charging a person more for their levies. Otherwise a standard levy is determined by the owners quotient in the sectional title scheme ie: 1/12 units.

I hear you, but surely a person is not just allowed to build on an exclusive use area. Actually, the way I understand it is that an exclusive use area is common property but a specific owner may restrict access to it etc. Yet it remains, legally, common property (pipes running underneath that which burst is the responsibility of the body corporate covered by the insurance on common property etc) so once a person build on that it actually is not just exclusive use, common property, area, it becomes the property of that person. Obviously if done without permission and in accordance with the law he basically stole that piece of property.

So surely it can't just be an exclusive use levy charged on that, there must be more (I mean I give people the benefit of the doubt that they will register it, but whilst registering they can't just pay a normal exclusive use type levy).

 

[Kosmik]

I hear you, but surely a person is not just allowed to build on an exclusive use area. Actually, the way I understand it is that an exclusive use area is common property but a specific owner may restrict access to it etc. Yet it remains, legally, common property (pipes running underneath that which burst is the responsibility of the body corporate covered by the insurance on common property etc) so once a person build on that it actually is not just exclusive use, common property, area, it becomes the property of that person. Obviously if done without permission and in accordance with the law he basically stole that piece of property.

So surely it can't just be an exclusive use levy charged on that, there must be more (I mean I give people the benefit of the doubt that they will register it, but whilst registering they can't just pay a normal exclusive use type levy).

You are correct, just I've never heard of an occupational levy ( I've only dealt with existing body corporates though, not developments so it might be there ). The basis of a scheme though is that a person is responsible for their quotient with regards to Levies, Rates etc. Common property costs are covered by the body corporate which recoups it's payment as part of the normal levy. To my knowledge, there are only a few ways to determine property in a scheme: section, common and exclusive use. Section is based off the quotient and levy calculated as such, common is shared equally amongst the sections and only exclusive use can be used to increase a proportional levy. If it's not part of a persons section ( which is what you originally described ie: a person grew their section) its either common or exclusive use.

 

[Kosmik]

On another note, regarding insurance:

1.Home owners comprehensive insurance is paid by the BC for the value of the entire property, sections not withstanding. Again, a persons section determines the quotient which should determine the value/portion of the insurance. In short, yes, it will be covered by the policy as the policy covers the entire property, not just sections.
2. Body Corporate is responsible for any common elements to repair and maintain ie: sectional walls, roof etc that abut multiple units. Not sure on housing schemes.
3. Levy is determined by the BC and can only be changed by a quorum of the owners which need to agree ( 75% ).
4. This whole item is very gray.
5. I'd consider getting proper legal advice regarding any changes to section or overall to the scheme.

 

[me_]

Previously I stayed in a ST scheme where the units differed greatly in size. Due to this, the levies were charged on a price per square meter, but if you don't already have this setup, you would have to call a special meeting and get agreement.

 

[Kosmik]

Previously I stayed in a ST scheme where the units differed greatly in size. Due to this, the levies were charged on a price per square meter, but if you don't already have this setup, you would have to call a special meeting and get agreement.

Square meterage will reflect in the quotient, should be the same.

 

[furpile]

Does your complex have a property management company? They should be able to assist with legal advice.

Occupational rent is normally charged when you buy a house, and you occupy it before it is registered. So I would think the occupational levy is exactly the same, you pay an extra levy for the increased area you are busy registering under your name. Once the registration is done, your increased area will automatically result in an increased levy. I would also assume that the new extension will be covered by the insurance from the body corporate, as long as they inform the insurer that extensions are being built.

How were people allowed to build on common property in the first place without approval?