Body Corporate Debt Collection – Can Levy Debt Expire? | Legal Articles

 

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Body Corporate Debt Collection – Can Levy Debt Expire?

Sectional title levies are collected by the body corporate and is what pays for repair and maintenance of the common property within the sectional title.

It is mandatory for owners or members of the scheme to pay their levies in full and on time to avoid placing the body corporate under unnecessary financial distress.

When levies are not paid, the body corporate is subsequently rendered unable to pay creditors or cover costs related to repair and planned maintenance.

body corporate debt collection

Body Corporate Debt Collection – Collecting Arrear Levies

Body corporate debt collection can be successful if the correct process is followed from a legal perspective. If not, the body corporate may suffer further financial strain.

Since the establishment of the Community Schemes Ombud Service (CSOS), bodies corporate also have the option to approach the CSOS for an order against the member in question to pay their arrear levies.

How to Recover Outstanding Levies – The Legal Process in South Africa

Prescription of Arrear Levies

According to the Prescription Act, it is in fact possible for arrear levies to be prescribed but only under certain circumstances.

The prescription of arrear levies applies after a period of three years has expired from the date that the levies became payable.

However, this period does not apply if the owner has acknowledged the fact that they owe levies at any stage during this period, or if the scheme has taken legal action to collect the outstanding levies.

Furthermore, the prescription period will extend for an additional year after the initial three-year period if:

  • The defaulting member is a member of the governing body of the association;
  • A trustee or director; or
  • If the debt is subject to an arbitration process

Van Deventer & Van Deventer Incorporated – Debt Collection and Civil Litigation

Successful body corporate debt collection for arrear levies depends largely on the support from debt collection attorneys.

For more information about our comprehensive legal services related to debt collection, please feel free to contact our attorneys.

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