Fire Protection - Can a special levy be raised to cover costs? | Legal Articles

 

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Fire Protection - Can a special levy be raised to cover costs?

In the case of one complex, a newly appointed managing agent found out that there weren’t any fire hoses or fire hydrants located in the complex. 

Fire Protection

Because of this the complex was deemed non-compliant by authorities who said that in the event of a fire the insurance company might not pay out for damages. 

The connection fee was around R11,000 and each fire hydrant that was installed cost about R375. The total costs were added onto each of the 11 owner's levy statement and came to roughly R1375 each. 

However, as this was not discussed in a meeting with the owners, nor were they previously consulted about it, many questioned if this was allowed. 

Special Levy

It is understandable that a special levy can be raised by trustees in the event of an emergency. 

But, are the charges relating to the connection fee and hydrants allowed to be added on to the total monthly levy bill by the managing agents and trustees, or should these fees come out of the reserve fund of the scheme? 

In answer to this question it is worth considering the Sectional Title Act and the Prescribed Management Rules (PMR).

Section 37(1)(k) of the Sectional Title Act for states that complying with notices and orders given by a competent Authority regarding the repairs or work done in the scheme is one of the functions of the Body Corporate. 

Also, according to the Rule 31(4) of the PMR, trustees are allowed to raise a special levy to cover the costs which weren’t reflected in the approved estimates from the last AGM. 

The special levy can then either be paid in on lump sum or over by way of monthly installments. 

From the described scenario, it would appear that the managing agent and trustees are correct in their actions as the mentioned costs were not brought up in the AGM or any other meeting prior. 

And since the matter was of the utmost importance, ensuring that the complex could be covered for fire damage meant that the special levy had to be raised. However, it may not run concurrently with normal levies for any length of time. 

Van Deventer & Van Deventer Incorporated - Sectional Title Attorneys

Contact us for expert legal advice on your Sectional Title Scheme
 

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