All you need to know about special levies - and how they can be avoided

While monthly levies are a part of life every month for those who call a sectional title home, special levies are a separate matter. Typical monthly expenses such as electricity and water accounts for the common property, general maintenance and security are covered by ordinary levies. When extensive repairs, an upgrade or the addition of a new feature to the property comes up, a special levy is likely to be called for.

The key to avoiding special levies

The Sectional Title Schemes Management Act goes a long way to helping body corporate members avoid the stress of special levies. The Act has created the need for the trustees of every sectional title scheme to establish a 10-year maintenance, repair and replacement plan (also called an MRRP). This plan is intended to cover the costs of maintenance, thereby removing the need to charge special levies. As the old saying goes, "prevention is better than cure", and in this case, preventative maintenance is far better than emergency repairs. The 10-year plan needs to be monitored regularly and updated as required. This puts a stop to scenarios in which trustees are forced to make a choice between implementing a special levy or allowing further neglect and deterioration of common property.

Members of the body corporate of any sectional title scheme should ensure that their trustees have drawn up an MRRP, which should note the following:

• Major capital expenditure expected to be needed in the next 10 years.
• Notes on the current condition of the building and facilities.
• Approximate timeframes of when maintenance and replacement of facilities will be required.
• Estimated cost of all maintenance, repair projects and replacements that will need to be undertaken.

How and when can a special levy be raised?

\While MRRPs will go a long way to removing the necessity for special levies, there may still be some circumstances in which a special levy cannot be avoided. The Sectional Title Schemes Management Act makes provision for this, and the issuing of a special levy needs to be approved only by trustees, and not by the body corporate as a whole. The decision to raise a special levy can be made at any normal trustee's meeting, provided that the proposed special levy is for a specific purpose. The trustees are required to be open and honest with all owners, telling them upfront the amount that needs to be paid, whether it will be a once-off payment or instalments and what the money will be used for.

Beware new owners — special levies could apply to you

If you are thinking of buying into a sectional title scheme, you may think that any special levies currently being paid will not apply to you because you were not a property owner at the time of the decision to put the special levy in place. Think again — the Sectional Title Schemes Management Act stipulates that in a situation in which ownership of a unit changes hands, the new owners will be responsible for continuing to make any monthly special levy payments. Before signing on any dotted line, make sure you've asked the relevant questions about the state of the sectional title's finances and found out whether there are any special levies currently in play — or whether there are likely to be any in the near future.

If you're thinking about buying property in a sectional title scheme, then chat to the team at Jawitz Properties. We'll make sure you know everything you need to know about levies, special levies and body corporates. We will also put our years of experience to work to find you a home that's perfect for you.