Levies - pain or pleasure?

With the privilege of owning property, whether it is a full-title property or a sectional title property, comes responsibilities. 

When one owns a full-title property, it has to be insured against risks, security must be taken care of, there is likely to be a garden that must be maintained, and if something breaks – such as the gate motor – it has to be repaired. Improvements are likely to be necessary. You may want to pave, paint the exterior, or put in a pool. And for all this, only one person is going to be paying: you!

The purpose of the levy payable in a sectional title complex is to establish a fund from which similar expenses can be paid.

In terms of the Sectional Titles Act of 1986, a body corporate is legally obliged to establish an administrative fund to cover its expenses.

These expenses include things such as
• Maintaining existing recreation facilities, such as the swimming pool
• Maintaining gardens
• Security, whether it is electric fencing, an alarm system, and access-controlled gate or 24-hour guards.
• Building insurance
• Water, electricity and gas for the common property
• Municipal taxes for the common property
• Salaries of people that the body corporate employs, such as gardeners and cleaners, and also the managing agent’s fees
• A reserve fund to make reasonable provision for future repairs, maintenance and improvements

These are expenses that the full-title owner would mostly have to cover in any case. The advantage is that when a cost such as repairing the electric fence or motor gate is shared, it lightens the burden. Few full-title homeowners put aside money on a monthly basis to save for repairs and maintenance in the future, so that when  the gate motor breaks or the house has to be painted outside, it causes a huge hole in the pocket. In a well-managed complex, there will be a reserve fund – a savings plan to cover large, irregular expenses, such as painting the buildings, or unexpected major repairs.

The monthly levy is determined once a year after the AGM, which allows the owner to budget for a lot of the expenses related to the property. Be at the AGM, and have your say about the budget and the way your money is going to be spent there. And then relax,  the trustees and managing agents are probably using your small contribution for the greater good of all properties in your complex.

<< News
Powered By: LinProp