Court finds withholding levies = grasping at straws

Most of us know that purchasing a unit in a community scheme would require the payment of levies. However, a defaulting unit owner attempted to justify the withholding of levies and contested the interest charged on the arrear amounts in a recent Western Cape High Court case. The court found that the defendant’s arguments amounted to “grasping at straws”.

In this video, Fausto Di Palma unpacks some of the reasons why the reported judgment in the case of Body Corporate of Nautica v Mispha CC[1] from the Western Cape High Court (7 December 2021) is relevant. The High Court held that:

1. the defendant unit owner had no reasonable justification for withholding payment of the levies due to the body corporate;
2. a body corporate such as the plaintiff has locus standi to sue for arrear levies as conferred on it by s 2(7) of the Sectional Titles Schemes Management Act[2];
3. a body corporate was entitled to levy compound interest on arrears;
4. the in duplum rule permits interest to run anew from the date that the judgment debt is due and payable (interest runs on and is limited to an amount equal to the whole of the judgment debt, including the portion which consists of previously accrued interest).”

Levies are crucial to sustain the well-being of your community scheme. The day-to-day management, maintenance and repairs of common property are paid from the levy contributions. Defaulting on levies is detrimental to paying unit owners and negatively impacts the entire community scheme and neighbouring areas.

[1] [2022] 1 All SA 399 (WCC).

[2] Act 8 of 2011.