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Special Levy

By Rita Badenhorst on Fri, 12 Jan 2018 at 14:37

Out of 62 units only 16 owners pitched up for the AGM meeting with 5 proxies we were a quorum. The building of a Office storage facility was dealt as
a special resolution We don't have a managing agent and the 5 Trustees are owners of units At Last years AGM it was approved that the Trustees can use R50,000 from our reserve fund to build this store room for keeping save office documents. The Trustees felt that they have to keep all these files in their home and needed to build a place on the common ground to store these documents ect. The problem I have is that this year they showed a plan for a building that consist of two toilets, a hall for meetings (we always have our meeting in a trustees garage or home) an office storage and a storage for our garden equipment like our grass cutter tractor ect. At the moment these items are stored in a smaller prefab room. The tabled price was R310,640 a lot of owners not present at the meeting is so upset about this and said it was stated R50,000 from reserve funds for a office storeroom.
The proposed special levy was approved on this condition 62 owners pays a special levy of R2,500 = R155,000 and R130,000 from our reserve fund The amount Of R25,640 will be collected as follows "a few owners are prepared to contribute a lump sum each without interest as payment of advanced levies. No names were mentioned as to who these owners are . My Question is -
Is all this legal? If not legal what can be done about it. The special Levy of R2,500 must be paid on or before the end of June 2018. Please note we are only 26 owners out of 62 living permanently in this complex we are all pensioners . The rest of the 36 units is the owners holiday homes. Sorry about this long "story" and I hope you and understand what I am trying to say.

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RE: Special Levy

Callie de Jager replied on Sat, 13 Jan 2018 at 18:17

Rita. Rather a long story than a short story lacking detail.
As members of the meeting you have already decided that there is a need for the storage facility, so based on the majority vote taken, you can proceed with the building of the storeroom. It is not a nice to have; there is a genuine need for it. But wait first!

If I was an owner in the complex I would oppose the thought of a Special Levy;...Show More

RE: RE: Special Levy

Rita Badenhorst replied on Sun, 14 Jan 2018 at 10:57

Thank you for your time this information helped a lot Rita

RE: Special Levy

Callie de Jager replied on Sat, 13 Jan 2018 at 20:20

Rita. Just reading I found this in the Government Gazette.
29. (1) The body corporate may on the authority of a unanimous resolution make alterations or improvements to the common property that is not reasonably necessary.
(2) The body corporate may propose to make alterations or improvements to the common property that are reasonably necessary; provided that no such proposal may be implemented until all members are given at least 30 days written notice with details of —
(a) the estimated costs associated with the proposed alterations or improvements;
(b) details of how the body corporate intends to meet the costs, including details of any special contributions or loans by the body corporate that will be required for this purpose; and
(c) a motivation for the proposal including drawings of the proposed alterations or improvements showing their effect and a motivation of the need for them; and if during this notice period any member in writing to the body corporate requests a general meeting to discuss the proposal, the proposal must not be implemented unless it is approved, with or without amendment, by a special resolution adopted at a general meeting.

RE: RE: Special Levy

Rita Badenhorst replied on Sun, 14 Jan 2018 at 10:58

Thanks for your time to reply now we know what to do Rita

RE: Special Levy

Frances Paton replied on Mon, 15 Jan 2018 at 14:19

From what you have described it appears that a relatively modest improvement deemed reasonably necessary by the body corporate has mushroomed into a major project that bears no resemblance to the original one and costs over six times the amount originally authorised by the body corporate. Prescribed Management Rule 29 contained in the regulations to the STSMA distinguishes between expenditure which is “reasonably necessary” and that which is “not reasonably necessary”. The latter requires a unanimous resolution by the body corporate before the trustees can proceed, and in my view the proposed improvements you have described would appear to be not reasonably necessary.
Even assuming that the expanded project is considered reasonably necessary, PMR 29(2) requires the trustees to give the body corporate 30 days written notice of the proposed improvements before implementing them. The notice must contain the details set out in this sub-rule. If any member of the body corporate requests a general meeting to discuss the proposal the trustees cannot proceed unless it is approved, with or without amendment, by a special resolution adopted at a general meeting (of which 30 days notice must also be given). If a special resolution was passed at your AGM you should have been given 30 days’ written notice of the proposed resolution prior to the AGM, containing the information specified in PMR 29(2) as well as the proposed wording of the resolution. If this was not done, the special resolution is invalid.
I would however challenge the decision on the ground that the proposed improvements are not reasonably necessary, particularly in view of the nature and composition of your body corporate, and that the project is therefore subject to PMR 29(1), which requires a unanimous resolution of the body corporate before it can be implemented. If you cannot get the trustees to concede this I would recommend you approach the Ombud to resolve the matter.

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