When are sectional title owners liable to pay special levies?
One must distinguish between levies voted on at an AGM and Special Contributions. This is covered in Section 37 (2) of the Sectional Titles Act which draws a distinction between:
(a) Contributions to be made by owners , for which they become liable as a result of the approval of income and expenditure for a forthcoming year at an annual general meeting ; and
(b) Special contributions, for which owners of units become liable as a result of any different process.
The distinction between the two types of contributions is drawn in Section 37 (2B) of the Sectional Titles Act.
In the first case , i.e. the case of contributions for which owners become liable as a result of the passing of resolutions at annual general meetings, liability for the payment of the contributions ( levies ) passes automatically to new owners of Units on the transfer to them of ownership.
In the case of Special Contributions, liability falls upon the persons who were the owners of the Units at the time of the passing of the relevant resolution, as appears from Section 37 (2A).
This legislation gives effect to the decision that the word “due” where it appears in Section 37 (1) does not refer to the time when payment is to be made, but actually means “owing” and thus relates to the time when the debt comes into existence. The reason therefor is that the authoritative text is the Afrikaans one, where the word “verskuldig” was used.
See in this regard, Nel. N.O. v Body Corporate of the Seaways Building & Others 1996 (1) SA 131 (A) at p. 136 G to 137 E, especially page 137 C – E.
Therefore, if the Body Corporate wishes to recover a special contribution which was passed prior to a new owner’s becoming the owner of the unit, it will have to show that the new owner agreed to assume liability therefor, i.e. that an assignment of the debt occurred, since liability for the payment of that debt fell upon the former owner of the Unit.
If liability to pay the contribution arose by virtue of the approval of an income and expenditure statement at an annual general meeting, liability for the payment thereof would pass to the successors in title of the persons who were the owners of the units at the time when that resolution was passed by operation of law.