Question:
I have just received a letter from the managing agents advising that they are raising a special levy for six months to raise funds due to non-payment/arrear levies and high consumption of water in the apartment block.

Can the trustees decide on a special levy without consultation or convening a special general meeting? If some tenants aren't paying their normal levies, why would they pay the special levies?

Answer:
In terms of prescribed management rule (PMR) 31(4) the trustees are entitled to raise a special levy when it is necessary and the expense for which the special levy is being raised was not budgeted for in the budget approved by the owners at the last Annual General Meeting (Click here to learn more about the rules governing AGMs).

There is no obligation on the trustees to call a special general meeting to consult the owners before they raise a special levy and therefore the trustees are able to raise special levies without any input from the owners. Of course the trustees have to comply with the provisions of PMR 31(4), which means that the expense must be a necessary one and it must not have been budgeted for. If you believe that the trustees have not complied with the provisions of PMR 31(4) and that the special levy is therefore irregular in nature, then your recourse is to declare a dispute with the body corporate in terms of PMR 71. If it is not resolved within fourteen days you can refer it to arbitration for resolution by an arbitrator.

To answer your second question, the body corporate should be able to recover all general and special levies validly raised from owners who are currently in arrears.

The trustees and/or managing agent should demand the arrear amounts from the defaulting owners and if they do not comply with the demand then they should be handed over to a debt collecting attorney who will issue summons against them and follow the debt collection procedures in the magistrate's court.

The body corporate should also be able to recover all the legal costs incurred in the process of recovering these outstanding amounts from the owners concerned in accordance with the provisions of PMR 31(5). The trustees should also ensure that they have taken a resolution in terms of PMR 31(6), setting a rate of interest to apply to arrear levies so that the body corporate does not lose any money in the time that it takes to recover these arrear amounts.

I would also suggest in this case that the trustees investigate these high water costs.

In some schemes there are owners with common property gardens who use a huge amount of water which is paid for by all the members of the body corporate. This results in a number of owners, such as those on the higher levels without gardens, unfairly subsidizing the water costs that only benefit the owners on the ground level with gardens.

If this is the case then in terms of PMR 33(3) the majority of owners may request in writing that the trustees procure the installation of separate water meters at the body corporate's cost. This may help to reduce the high water bills currently being paid by all owners and may squash the need to raise special levies for this expense in the future.

www.paddocks.co.za

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