What action does the owner of a sectional-title unit take if he knows that he is about to default on his monthly levy

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Lake Properties

Defaulting on monthly levies in a sectional-title scheme is stressful — but it’s also very common, and there are clear steps you can take to protect yourself and your investment. Below I’ll explain, in plain language, what levies are, the legal framework, what your body corporate can and cannot do, and the practical actions you should take right now to avoid escalation. (I’ve sprinkled SEO phrases you can use: sectional title levies, levy arrears, default on levies, body corporate levy recovery, how to avoid levy default.)

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1) Quick background — what levies are and your legal duty

Levies (also called contributions) are the monthly payments owners must make to the body corporate to pay for insurance, security, maintenance, utilities for common areas, the admin fund and reserve fund. Under the Sectional Titles Schemes Management Act (STSMA) the body corporate is required to determine and collect contributions from owners — so paying levies isn’t optional.

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2) If you see a shortfall coming: immediate, practical steps

1. Call or email the trustees/managing agent straight away. Explain the situation honestly — many bodies corporate prefer a negotiated payment plan to expensive legal action.
2. Check your levy statement. Confirm the amount, make sure there are no mistakes (wrong charges, duplicated items). The STSMA and its management rules require bodies corporate to certify levy amounts and show payment status — use that to check accuracy.
3. Ask for a payment plan or an Acknowledgement of Debt (AOD). Propose a realistic split (small immediate payment + instalments). Trustees commonly accept structured repayment if you keep up with current levies.
4. If you’re renting the unit, consider asking the tenant to pay rent directly into a blocked account or agree on a temporary arrangement — in some cases CSOS remedies can direct rental payments to the body corporate if necessary.

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3) What the body corporate must do before it can collect (and your rights)

Bodies corporate must follow the Prescribed Management Rules (PMRs) — particularly the notice procedures (PMR 25) — when raising levies and collecting arrears. That includes issuing notices showing amounts due, the due date, interest and follow-up final notices. If you dispute a charge, you can refer the dispute to CSOS (Community Schemes Ombud Service) for mediation/adjudication. Don’t ignore notices — but do check them for accuracy and procedure compliance.

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4) What the body corporate can do if you don’t act

If you fail to pay and don’t engage constructively, the usual escalation path is: final written demand → instruction to attorneys → summons for payment → judgment → execution (attachment of movable property and possibly sale in execution). The body corporate can recover interest, collection and legal costs if properly incurred. In practice, this can result in a lien-like enforcement and — in severe cases — sale in execution of your unit if other creditors (including bondholders) allow it.

Two important legal limits to note:

• The body corporate may not lawfully cut off essential services or forcibly evict you without a court order — doing so would be unlawful. If anyone tries to disconnect water/electricity as pressure tactics, get legal advice and report it.
• If you sell, the conveyancer will normally require a levy-clearance certificate or confirm no arrears before registration — the Sectional Titles framework allows the body corporate to require proof that levy arrears are settled before transfer will be registered. That gives the body corporate a powerful lever at the point of sale.

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5) If you think the levy or the collection is unfair or incorrect

• Dispute the levy or charges in writing to trustees immediately and ask for proof (minutes / resolution raising the levy, budget, supporting invoices).
• Refer unresolved disputes to CSOS — CSOS offers a relatively low-cost dispute process for community schemes (mediation and adjudication). CSOS can issue orders which are enforceable. Use CSOS if you genuinely dispute the validity, calculation, or the way the body corporate has handled collection.

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6) Practical money options to consider (don’t delay)

• Temporary budgeting: cut non-essentials for a short period and direct any freed cash to levies. Levies affect communal services and property value — letting them fall behind often costs more later.
• Short-term loan / debt consolidation: speak to your bank or a reputable financial adviser about a short bridge loan or restructuring — make sure the cost doesn’t exceed the legal and interest charges you’re avoiding.
• Sell or refinance: if the debt is unsustainable, selling or refinancing the bond may be a last-resort option — but remember the levy clearance requirement on transfer (see above).

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7) What happens if the body corporate sues — the scary but real outcomes

If collection proceeds to court and judgment is granted, the body corporate can execute against movable and immovable assets to satisfy the debt. That can mean garnishee or attachment orders and ultimately sale in execution. This is why early communication and a written repayment plan are worth their weight in gold — legal fees and interest usually push the total owed far higher than the original missed levy.

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8) Checklist: what to do right now

• Call/email trustees/managing agent and ask for a payment plan.
• Get an up-to-date levy statement and check every charge.
• If you can, make a small immediate payment to show good faith.
• If you dispute amounts, lodge that dispute in writing and be ready to take it to CSOS.
• If the body corporate has already instructed attorneys, consult a lawyer or debt counsellor — don’t ignore legal papers.

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Lake Properties Pro-Tip

If you see a levy default coming, act early and get everything in writing. A quick honest conversation + a written repayment plan will almost always beat the cost and stress of debt collection and court action. Keep copies of every levy statement, notice, and agreement — and if you need help negotiating with your body corporate, get a professional (managing agent, lawyer or Lake Properties) to assist and ensure the terms are documented.

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