Can You Withhold Your Levies When Involved In A Dispute With The Body Corporate

Can You Withhold Your Levies When Involved In A Dispute With The Body Corporate

A sectional title is a form of property ownership used mostly in apartment blocks and townhouses. It includes ownership of a specific section and a joint or shared ownership of all other common areas.

An owner of a sectional title will automatically sit on the Body Corporate of the sectional title scheme. The Body Corporate will inter alia be responsible for maintaining the common property and to insure same. The Body Corporate will raise funding through the levies, payable by each owner.

The budget for the sectional title scheme must be approved by the Body Corporate. There are prescribed minimum amounts that must be budgeted for reserves, calculated on the anticipated cost of providing for the repair, maintenance and replacement of the scheme’s major capital items over the next 10 years.

Disputes between the owners are common. People live in close proximity of each other and often have different ideas and priorities.  Like most other things in life, disputes mostly arise in relation to money.

Withholding your levies when involved in a dispute is not the answer. It will not aid in resolving the dilemma, in fact, it will only cause more problems.

Despite the existence of the dispute, the Body Corporate, through the Trustees, will still be obligated to recover the overdue amounts from the defaulting owner as quickly as possible.  This can also lead to an application of the Community Scheme Ombud Service and a Court Order. The defaulter may also be responsible for all legal cost involved. Not only will the defaulter be liable for unnecessary legal costs, it will also sour the relationship with the remainder of the Body Corporate members. This tainted relationship will not aid in resolving your initial dispute with the Body Corporate.

The above is true even if your initial dispute is related to the levies itself. A dispute regarding the levies may for example exist when you are not in agreement with the amount of your levies or, when you are not in agreement with how the levies are being used in general.

Whatever the reason for the dispute, going to Court should be avoided as it is costly and may be dragged out for several years. During this time, the usual business conducted by the sectional title scheme must continue. You can imagine how difficult this could be if you are involved in acrimonious litigation and, on top of that, are being chased for your outstanding levies.

Withholding your levies during this time may also jeopardise the financial position of the scheme which will, in the long run, jeopardise the defaulter as an owner in that scheme.

Try to discuss the issue and, in that manner negotiate an appropriate solution. If the discussions fail, arbitration is still the best and most cost-effective manner to handle disputes between owners in sectional titles.

Whilst in negotiation or arbitration, you may also try to approach the Trustees and Body Corporate for an agreement that you may pay your levies into a Trust and that same shall be payable to the board once a resolution is found. This can show your good will. However, it is advisable that this be agreed upon before you withhold the levies for purposes of paying same into the trust.

Before buying into a sectional title, make sure that you have done your due diligence. Understand how the scheme has been operated and decide whether it is possibly something that you may want to become involved with. If you are not in agreement with the past operations of the scheme, chances are that you will have disagreements in the future.

 

Michelle Soutter

Practicing Attorney