The cost of not paying levies

It is often alleged that the trustees of sectional title schemes lack the power to enforce Body Corporate rules. Before embarking down this particular avenue, owners should know the complete scope of the powers of the Managing Agents and the Trustees.

Sub-rules (5) and (6) of Rule 31 makes defaulting owners liable for all legal costs involved in the collection of unpaid contributions as well as any legal costs incurred in forcing an owner or his tenants to abide by the Body Corporate rules.

Furthermore, the sub-rules specifically allow the trustees to charge interest on arrear amounts at a rate which is within their power to determine.

Rule 31 (6) permits the trustees to charge interest not only on the unpaid levies but also on the unpaid interest amounts. 

Defaulting Owners should bear in mind that the piggy-backing of paying owners is a dangerous and vulnerable situation to be in.

The provisions of the sub-rules above permit recovery of fees for collection (ie. Administration fees for ‘chasing’ the defaulting owner) as well as interest (ie. The Body Corporate has been deprived of these funds during its regular course of business).

A property is unable to transfer until a Levy Clearance certificate is issued by a person competent to do so. This means that your transfer could be significantly delayed if arrangements are not made to the satisfaction of the Body Corporate to ensure the recovery of funds.