WHAT EXACTLY ARE 'LEVIES'
Category General Information
Levies are payable to the body corporate and/or homeowners association when owning a property in either an estate or sectional title development.
Monthly contribution
The levies are payable on a monthly basis and are often due in advance in which instance the levy for a particular month would need to be paid by the first of that month. When payments are not received in full and on time, interest is normally charged and in some cases a 10% late payment fee is added. Levies are normally increased on an annual basis after approval at an Annual General Meeting where members need to vote on the increase.
Levies cover day-to-day expenses
Levies are used to cover operational and administrative expenses such as staff salaries, upkeep and maintenance of communal areas, refuse collection and other expenses occurred in the daily running of the homeowners association. A part of the levy might also be allocated to capital projects including the repair of communal property. A special levy may need to be collected for unforeseen expenses but would need to be approved at a general meeting of members.
Levies are determined by the homeowners association by dividing the net budgeted expenditure by the number of levy paying units. In some cases the directors of the homeowners association may be entitled to differentiate the levies payable by a particular property based on the nature, extent of occupation, zoning and size of the property.
Body corporate levies
The levies collected by body corporates on the other hand are used to cover the external repairs and maintenance of units as well as building insurance and general upkeep of the premises.
In some cases, the owner of a sectional title unit may be responsible to pay not only a levy to the body corporate but if the scheme is situated within an estate, an additional levy to the homeowners association may be payable.
Speak to the property practitioner for detailed information about the levies payable in a particular estate and also request a copy of the financial statements for the estate and/or scheme.
Author: Ikonic Real Estate