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No levy due?
I have been advised that no levies are payable until the budget is approved at the Inaugural Meeting. Is this correct? It has taken the developer more than 18 months to arrange this meeting. In the meantime I have been incorrectly charged for my levy and even a Special Levy has been charged without a first meeting. The Special Levy is for a Municipal Account (R22000-00)that has not been paid - reasons unknown. (Block of 11 units. 9 developer owned, 1 new owner and myself who bought 12/2008) I would greatly appreciate advice on these two levy issues.
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RE: No levy due?
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RE: No levy due?
I would also like to know peoples thoughts on this. I have a similar situation where no inaugural meeting has been held for 2 years, and the Municipal account alone is over R200,000. No levies have been raised so far, but somebody needs to pay the R200,000.
The inaugural meeting should be held within 60 days of the transfer of the first property other than the developer, so theoretically, this situation should not happen. In practice however, it will often be the case.
RE: RE: No levy due?
Please read PMR 50(2)under the Library Section.
If the developer is found guilty of commiting an offence and is liable when convicted to a fine ot to a term of imprisonment for failing to convene the Inaugaral General Meeting within 60 days after the first unit has been registered into the name of a person other than the developer.The first sate of registration can be established at your local Deeds Office.
RE: RE: RE: No levy due?
Thank you - I have read PMR 50(2)as suggested and it would appear that is now time for me to seek the assistance of an attorney. As a single mother it is going to be difficult but necessary. Please confirm that I am understanding correctly? I would be most grateful.
RE: RE: RE: RE: No levy due?
IMO, if your facts are 100%, you could file a criminal charge without incurring any cost.
RE: RE: RE: RE: RE: No levy due?
Thank you very much.
RE: No levy due?
Hi Theresa,
I have looked at sections 36 and 37 of the Act as well as PMR4. I include them here:...Show More
S36(1) With effect from the date on which any person other than the developer becomes an owner of a unit in a scheme, there shall be deemed to be established for that scheme a body corporate of which the developer and such person are members, and every person who thereafter becomes an owner of a unit in that scheme shall be a member of that body corporate.
S37(1) A body corporate referred to in section 36 shall perform the functions entrusted to it by or under this Act or the rules, and such functions shall include‐
(a) to establish for administrative expenses a fund sufficient in the opinion of the body corporate for the repair, upkeep, control, management and administration of the common property (including reasonable provision for future maintenance and repairs), for the payment of rates and taxes and other local authority charges for the supply of electric current, gas, water, fuel and sanitary and other services to the building or buildings and land, and any premiums of insurance, and for the discharge of any duty or fulfillment of any other obligation of the body corporate;
(b) to require the owners, whenever necessary, to make contributions to such fund for the purposes of satisfying any claims against the body corporate
S39(1) The functions and powers of the body corporate shall, subject to the provisions of this Act, the rules and any restriction imposed or direction given at a general meeting of the owners of sections, be performed and exercised by the trustees of the body corporate holding office in terms of the rules.
PMR4.(1) The number of trustees shall be determined from time to time by the members of the body corporate in general meeting, provided that there shall be not less than two trustees.
(2) With effect from the date of the establishment of the body corporate, all owners shall be trustees who shall hold office until the first general meeting of the members of the body corporate as contemplated in rule 50 (1) whereupon they shall retire but shall be eligible for re‐election.
MY INTERPRETATION OF THAT IS:
S36 says the B/C is a legitimate entity capable of suing and being sued.
S37 says the B/C shall perform certain functions including establishing a fund to cover expenses, and requires owners to contribute to that fund.
S39 says the functions and powers of the B/C shall be performed by the Trustees.
PMR4.(2) says that prior to the first general meeting, (which is the inaugural meeting), all owners are Trustees.
OPINION 1. The first thing to do is for the Trustees (which is every owner) to call an inaugural meeting with the correct agenda, and get everything on a strictly legal footing. Levies can be established at this meeting, and outstanding debts (Municipality) identified. If it is necessary that a special levy be raised to pay off the Municipality, then it should be discussed and raised in the correct manner. Are there other outstanding debts such as insurance. Either somebody has paid the premiums or the buildings are not insured.
The fact that the owners benefited from the services supplied by the Municipality make them liable for the expense.
The Trustees, ie all owners, are responsible for the mess, and not just the developer. I am not trying to blame the 2 owners who almost certainly did not know the rules, but the developer should know the rules, and he should have been the driving force.
The amount of R22,000 that you mention for municipal services for the past 20 months does not seem excessive. Your share of this would be approximately R2,000 or R100 per month for municipal services.
OPINION 2. Have the inaugural meeting, legitimise everything, set levies, raise a special levy for the Municipality, or make arrangements with the Municipality to pay off the arrears over a period of time.
It's not going to do the scheme any good if you try and put the developer (the owner of 90% of the units in the scheme) in jail. Rather work together.
RE: RE: No levy due?
Hi Mike - I am very grateful for your response. I am happy to do everything you have suggested - very happy in fact the only issue I then have is that the developer has refused to work together with me from day 1. He is part of a huge "trust" which owns many, many schemes around CT and has been in the media a few times for not complying.
My purchase agreement stated that my levies were Rxxx including the rates. My unit was valued, I started paying the rates myself and the MA refunded me 6 months, being the "rates portion" and I got a letter stating that my levies would be reduced on my account accordingly the following month. Then they changed their minds and said "no more"....and they have charged me in full since then.
Now, when they decide to arrange the meeting, I am told this will be dealt with in the meeting. I feel that I am 1 vote to his 9 and he is never going to give me the credit on my account. The MA is employed by his company and the levies are paid into his trust. I don't stand a chance. I hope I have given enough info.
ANY thoughts on this would be appreciated.
Thanks
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