In short, levies are payable for the upkeep and general day-to-day running of the common areas. Levies provide the Body Corporate with the funds required to meet monthly expenditure and, in most cases, also allows the Body Corporate to build up a Reserve Fund over time in order that funds are readily available should the Body Corporate need them.
The Reserve Fund is used either in the case of unforeseeable repairs (any items which may need to be repaired) or foreseeable property maintenance (ie. Painting of the building). By having a Reserve Fund, the Body Corporate is ensuring that maintenance or improvements to the building can take place without placing additional financial strain on the owners within the Sectional Scheme.
In order for a Body Corporate to maintain its financial health, Levies need to be received on time on a monthly basis in order for the Body Corporate to meet its monthly commitments in terms of expenditure.
Although many owners do not see the necessity of making monthly levy payments on time, it is very important that levies are paid on time monthly for the Body Corporate to function properly.
I hope you find this new section informative and look forward to receiving your questions for the next edition.