Penalties on Late Payments

People who default on their levies in sectional title complexes can expect to be harshly penalised with penalty interest and administration fees in accordance with Body Corporate policies as determined from time to time.

Levies represent the financial health of a Sectional Title scheme. Annual financial statements and debtors lists are becoming commonly requested by banks when determining the credit worthiness of clients for the particular scheme.

Too many owners are ‘piggy-backing’ off of the owners who do pay their levy timeously and are detrimentally effecting the financial statements and credit worthiness of buildings which in turn, decreases their investment.

Many complexes have adopted the approach of harsher penalties on non-payments due to the common trend of levies being last on the list of monthly payments to be made. Levies are prioritized far down the list as Owners feel the Body Corporate will not be in a position to take harsh action.

The principle of harsh penalties should be widely applied to ensure the Body Corporate can function optimally by making its monthly commitments and honor its monthly commitments.

This view is not contrary to any existing South African legislation including the National Credit Act.