Understanding levy statements and accuracy in sectional title schemes

In the realm of sectional title schemes in South Africa, accurate levy billing is crucial for maintaining financial transparency and fostering trust among owners. Levy statements, which outline the contributions required from each owner to support the scheme’s financial health, can sometimes lead to disputes if they are inaccurate. Here are the key considerations regarding levy statements, including the legal framework surrounding them and how owners can address inaccuracies.

Accurate billing of levies is essential for the effective management of a sectional title scheme. It ensures that the body corporate has sufficient funds to cover ongoing operating costs, maintenance, and reserves for future repairs. Inaccuracies in levy statements can create significant challenges for both owners and the body corporate, leading to disputes and potential financial strain.

The Sectional Titles Schemes Management Act 8 of 2011 (STSMA) outlines the obligations of bodies corporate regarding levy statements. Specifically, section 3(5) mandates that the body corporate must provide written certification of the contribution amounts determined for each owner, the payment methods, and the payment status of each owner. Additionally, the Prescribed Management Rules (PMRs) require that the body corporate notify members about contributions and charges, including due dates and dispute resolution processes (although this notification requirement is not necessarily a pre-requisite for levy debt enforcement).

Key provisions include:

• Section 3(5): Certification of contributions and payment details.
• PMR 25: Timely notification of contributions due, including information about overdue payments and interest charged on arrears.

If owners believe they have been incorrectly billed for levies, they should first attempt to resolve the issue internally with the body corporate. If these efforts fail, the next step is to file an application with the Community Schemes Ombud Service (CSOS) for dispute resolution. Under section 39(1)(c) of the CSOS Act 9 of 2011, owners can seek relief by contesting the determination of their levies. Additionally, under section 39(1)(e), owners could seek relief for the repayment of a contribution or any other amount. The CSOS does not charge a fee for dispute resolution and the process can lead to enforceable adjustments in the billed amount or payment method for a levy contribution.

To further support a dispute regarding incorrect levies, owners can request an audit of the body corporate’s accounts under section 39(1)(d) of the CSOS Act. An audit can provide clarity and assurance that the levies are calculated accurately, ultimately fostering greater trust among owners. The audit itself will probably come at a cost.

Documentation is vital when addressing levy disputes. Owners should maintain records of all correspondence and attempts to resolve the issue with the body corporate. Evidence demonstrating discrepancies in billing can strengthen the case when applying for dispute resolution with CSOS.

In serious cases, such as disconnection of utilities due to alleged non-payment of levies, owners may need to seek urgent relief from the High Court. It’s essential to assess the governing rules of the community scheme, as they may allow for such actions in specific circumstances.

Professionalism in interactions with administrative personnel is crucial, even when facing challenges. Documenting inappropriate communications can provide supporting evidence in any formal complaint or dispute resolution application.

Owners should also be aware of the Protection of Personal Information Act 4 of 2013 (POPIA). If administrative staff have unlawfully processed personal information, it may be a contravention of POPIA. In such cases, owners can gather evidence and lodge a complaint with the Information Regulator.

Accurate levy statements are fundamental to the smooth operation of sectional title schemes. Understanding the legal framework, addressing inaccuracies promptly, and maintaining thorough documentation are essential steps for owners to protect their rights. Should disputes arise, seeking assistance from legal professionals and utilising resources like the CSOS can help ensure a fair resolution.

For further information, please refer to the Community Schemes Ombud Service (CSOS)

By staying informed and proactive, owners can navigate the complexities of sectional title living and advocate for their interests effectively.

Got a legal query? Don’t hesitate to reach out to our experienced Legal Advisory team!