Everything You Need to Know About Levies on Property in South Africa

Body corporates, trustees, levies, rates, and taxes – the list of responsibilities seems to be endless for sectional title owners in South Africa. However, one aspect that probably involves the most confusion is the levy.

What Is a Levy?


All owners of a sectional title property, for instance, a unit in a townhouse complex or flat in a high-rise building, will pay levies. These levies or fees are required to pay for services within the boundaries of the complex. Facilities such as security, repairs in communal areas, and general maintenance are covered by levies.


One of the body corporate duties is to collect levies from the complex owners. When purchasing a unit or apartment, you automatically become a Body Corporate member and participate in selecting Trustees at an Annual General Meeting to administer all relevant matters.


What Purpose Do Levies Have?


As briefly noted above, the short answer is to pay for all shared services and maintenance of communal amenities. However, this subject deserves some in-depth scrutiny.


Shared Amenities


When it comes to maintaining shared amenities, it’s pretty simple to understand what your levy will be used for. Shared amenities include parking areas, security services, roads, gardens, swimming pools, fitness centres, and utilities that all owners access, share and utilise.


So, say, for instance, the complex experiences a heavy downpour, and the pool turns green – the levies will cover the expense of enlisting a service to get the pool back in shape.


Administration


Levies are also used for covering administrative costs of managing the complex, such as banking fees, compensation for gardeners and other workers within the complex or building, telephone and internet expenses, etc.


These duties are ordinarily the responsibility of Body Corporate members assigned or voted for by the owners.


Insurance


The more complex and often misunderstood purposes of levies relate to building insurance. Levies are usually reserved for insurance premiums on shared amenities, such as perimeter walls, safety fencing around the swimming pool, and any shared building upkeep like the clubhouse. However, homeowner’s insurance will be the responsibility of every owner individually.


For example, the cost will be yours if you leave the bathwater running and your unit is covered in water.


Utilities


Utilities like electricity and water used in each unit will also be charged to owners via a monthly bill from the local municipality. Levies cover only electricity and water used in common areas.


Rates and Taxes


As for rates and taxes, you will also pay for any municipal service such as sewerage, streetlight maintenance, and rubbish removal in addition to your levy as levies do not cover these utilities.


As you can see, owning a property or unit in a complex can involve some hidden costs and may catch you off guard if you neglect to budget for everything. Nonetheless, do keep an eye on our blogs for more information on owning property.