Levy Recovery for Bodies Corporate

Recovery of Levies for Body Corporate & Home Owners Associations

Definition: Levy recovery is the process which involves the collection of arrear levies from registered property owners in a sectional title scheme. This process is regulated by the Sectional Titles Schemes Management Act (STSMA).

According to the STSMA, any member of a body corporate is required to pay a proportionate contribution towards the levies as stipulated by the trustees. 

Should a member fail to make their monthly contribution in time or refuses to make payment, the legal process may then be initiated.

Legal Levy Recovery Process

There are certain steps that must be followed in the levy recovery process and if followed correctly, results may be achieved in an efficient manner.

Letter of Demand

Although not compulsory, it is advised that the plaintiff delivers a letter of demand as it informally allows the legal process of levy recovery to begin. It also allows the debtor the opportunity to make full payment within 14 days or possibly make alternative payment arrangements. It is imperative that the receipt of the letter by the debtor is confirmed.

Summons

In the case where the debtor does not respond within the period of time stated in the letter of demand, a summons is issued to the debtor on behalf of the body corporate so as to formally begin the legal process. The Magistrate’s Court who has jurisdiction over the area of the sectional title.

The summons must include the following at least:

• The body corporate’s details
• The debtor’s details
• Details of the unit in question
• Reference to sections of the STSMA which highlight the obligation to pay levies
• The outstanding amount

After the summons has been issued it is then delivered to the debtor by the sheriff of the court, after which the debtor has 10 days to defend the action. Failure to defend the action in any way may result in default judgement.

Default Judgement Application

Application to the court is made for default judgement and once received is sent to the Magistrate for consideration of such request. Should all the requirements for the application be met, the Magistrate will grant the default judgement. 

These requirements include:

• Sufficient completion of details of summons
• Particulars of the claim
• Legal service of relevant documents was made
• Absence of the defendant’s notice of intention to defend

Judgement

Judgement applies sufficient pressure on the debtor as it allows the debtor to become blacklisted, placing their creditworthiness at risk. Furthermore, judgement makes provision for the execution against moveable assets and can only be repealed one the full amount owing has been paid.

Execution Warrant

The plaintiff may issue an execution warrant against all moveable property or goods which belong to the debtor. The sheriff is required to issue to warrant at the debtor’s actual residential address. 

Should the debtor not make the necessary payment arrangements once receiving the warrant, the sheriff is instructed to remove all moveable assets which are sold at a Sale in Execution.

Other Methods of Levy Recovery

Should none of these steps prove successful in the full recovery of arrear levies, more drastic steps may be taken such as auctioning the property or an application for a garnishee order.

Van Deventer & Van Deventer Incorporated – Property Lawyers in South Africa

Our attorneys in Johannesburg and Cape Town are efficient and will assist you with all legal matters related to levy recovery.

Contact a Debt Collection Attorney here.
 

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