Navigating Unpaid Levies in Sectional Title Schemes: A Strategic Approach
Category Community Schemes (ST & HOA Scheme)
Navigating Unpaid Levies in Sectional Title Schemes: A Strategic Approach
Body corporates play a vital role in the seamless operation of sectional title schemes. The financial backbone of these operations is the levies collected from property owners, crucial for maintaining property values and ensuring community compliance. However, when owners default on their levies, it poses a challenge for the body corporate, necessitating a strategic approach to resolution.
The Importance of Levies:
Levies are not optional; they are a legal obligation that owners must fulfill promptly and in full. Failure to pay levies can strain the maintenance and operations of a sectional title scheme, requiring the recovery of these costs to sustain the community.
Legal Process for Unpaid Levies
In the event of unpaid levies, it is not a straightforward process for sectional title schemes to evict defaulting owners. There is a legal procedure that must be adhered to, and unfortunately, it is often intricate, lengthy, and costly, not always resulting in the expected outcomes.
Resolution Strategies
When faced with unpaid levies, body corporates have two main routes to consider. The first recommended approach is to seek resolution through the Community Schemes Ombud Services (CSOS), an entity specifically designed for conflict resolution in community schemes. Alternatively, some opt for the court route, although this is not the preferred method due to its greater time and financial burden.
Benefits of CSOS: Approaching the CSOS offers a more expedited and cost-effective solution compared to the courts. The CSOS procedure for recovering unpaid levies is designed to be faster, and if successful, the resulting payment order is legally binding, similar to a judge's ruling in the Magistrates' Court.
Consequences of Non-Compliance: In cases where owners fail to comply with a CSOS payment order, their movable and immovable assets may be attached to cover the debt. This underscores the seriousness of meeting financial obligations within the sectional title scheme.
Professional Assistance
Given the time-consuming and specialized nature of the collection process, seeking professional assistance is advisable. Professional collection agents or attorneys can enhance the chances of resolving the issue outside of court. Managing agents often have resources to recommend suitable debt collectors or handle debt collection services internally.
Unpaid levies can pose significant challenges for body corporates, requiring a strategic and well-informed approach for resolution. The CSOS emerges as a preferred avenue, offering a faster and more cost-effective solution, ultimately ensuring the financial stability and compliance of the sectional title scheme.
Author: Safcom Properties
