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Navigating Levy Arrears in Sectional Title Schemes and Homeowners Associations

Levies are the financial heartbeat of every sectional title scheme. They fund the day-to-day services and long-term maintenance that keep a community functioning smoothly, from security and insurance to utilities, repairs, and the upkeep of common property.

When owners fall behind on levy payments, the consequences extend well beyond a single account. Levy arrears can place significant pressure on a Body Corporate’s and Homeowners Association’s finances and, if not managed effectively, may affect the stability, appearance, and overall value of the scheme.

How Levy Arrears Affect a Scheme

A Body Corporate and Homeowners Association remains responsible for paying service providers, municipal accounts, insurers and contractors regardless of whether all owners have paid their levies.

When levy income drops, the shortfall often impacts the entire community. Common consequences include:

Increased financial pressure on reserve funds
Delays in maintenance and repairs
Special levies being introduced to cover operational gaps
Cash flow strain affecting essential services
Supplier disputes or interruptions in services
A decline in property values within the scheme

For this reason, arrears collection is not simply an administrative task. It is a critical part of protecting the financial sustainability of the scheme and ensuring fairness to owners who meet their obligations.

This is why the timely payment of levies remains such an important priority. At Solver Property Services, we continually emphasise the importance of owners meeting their levy obligations to help protect the financial wellbeing and sustainability of their community scheme.

Understanding the Arrears Recovery Process

The recovery of unpaid levies is guided by the Sectional Titles Schemes Management Act (STSMA), scheme governance documents and established legal procedures.

Internal Collection Measures

(Provided that the Managing Agent is a duly registered Debt Collector with the Council for Debt Collectors, or an Attorney)

In many cases,the process begins internally through the Managing Agent or Trustees.

This typically involves:

Issuing levy statements and payment reminders
Sending formal letters of demand
Attempting to negotiate payment arrangements where appropriate

Early intervention is often key to successful arrears recovery. Addressing outstanding balances promptly is generally far more effective than allowing debt to escalate over time, which can place additional strain on the financial stability of the scheme.

At Solver Property Services, we support schemes through a comprehensive collections process backed by an in-house attorney and a proactive, results-driven approach. Through consistent follow-up, regular debtor engagement and early intervention strategies, we aim to maximise recoveries, improve cash flow and support the long-term financial sustainability of the scheme.

The Role of CSOS

The Community Schemes Ombud Service (CSOS) has become an increasingly important avenue for resolving sectional title disputes, including levy arrears matters.

A Body Corporate / Homeowners Association may apply to CSOS for an adjudication order compelling an owner to settle outstanding levies and related charges.

Some of the advantages of the CSOS process include:

Lower costs compared to court litigation
A more accessible dispute resolution process
Legally enforceable adjudication orders

While CSOS can be an effective recovery tool, turnaround times may vary depending on the complexity of the matter and administrative backlogs.

It is also important to recognise that CSOS matters can become procedurally ‘complex’, particularly where the owner in arrears has legal knowledge or experience. In some cases, schemes may find themselves dealing with owners who are attorneys or advocates and who represent themselves during the dispute process. In these circumstances, a poorly prepared application or lack of procedural understanding may place the scheme at a disadvantage.

For this reason, it is important that schemes receive appropriate support and guidance throughout the process. At Solver Property Services, our collections and CSOS recovery processes are supported by in-house legal expertise to help ensure matters are prepared professionally, procedural requirements are met and schemes are placed in the strongest possible position for recovery.

This keeps the tone professional, accurate to CSOS procedure, and positions Solver’s value proposition more credibly.

Civil Litigation as a Recovery Option

Where arrears are substantial, disputed, or require urgent intervention, a Body Corporate / Homeowners Association may proceed through the courts.

This process can include:

Issuing summons against the owner
Obtaining judgment for the outstanding amount
Executing against movable assets where legally permitted

Although litigation may provide effective relief in serious arrears matters, it often involves higher legal costs and longer recovery timelines.

Additional Recovery Mechanisms Available to Body Corporates / Homeowners Associations

Trustees and Managing Agents have several lawful tools available to strengthen arrears recovery efforts.

Charging Interest on Overdue Accounts

A Body Corporate / Homeowners Association may charge interest on overdue levy accounts, provided the interest rate is reasonable and properly authorised in terms of the scheme’s governance documentation.

Allocation of Payments

Under common law principles, payments received are generally allocated in the following order:

Interest
Legal and collection costs
Capital debt

This principle becomes particularly important in long-standing arrears matters or where legal recovery processes have already commenced.

For this reason, keeping levy accounts up to date is not only important for the financial wellbeing of the scheme, but can also assist owners in avoiding unnecessary interest, legal expenses and collection costs. Addressing arrears early is often the most cost-effective approach and contributes towards the financial sustainability of the broader community.

Section 15B(3) Clearance Certificates

One of the most effective recovery tools available is the Section 15B(3) Clearance Certificate.

An owner cannot transfer ownership of a unit unless the Body Corporate confirms that all outstanding amounts have been paid in full. This mechanism often plays a key role in recovering arrears before a property transfer can proceed.

Rent Attachment Orders

Where a unit is occupied by tenants, a Body Corporate may approach the court for an order directing rental payments toward the outstanding levy debt.

Actions Trustees and Body Corporates Cannot Take

Although levy arrears can create serious financial pressure, Trustees and Managing Agents must avoid unlawful collection practices or “self-help” remedies.

Body Corporates may not:

Disconnect water or electricity without lawful authority. Solver Property Services can however guide you on how to do this legally.
Act outside the authority granted by legislation or scheme rules

Improper handling of arrears can expose the scheme to legal disputes, reputational harm and financial liability.

Why a Clear Arrears Policy Matters

Every sectional title scheme and Homeowners Association should have a clearly defined arrears collection policy that is consistently applied and properly communicated to owners.

A proactive and structured approach to levy recovery can help:

Improve cash flow stability
Reduce financial pressure on compliant owners
Promote fairness and consistency
Protect the long-term sustainability of the scheme

Ultimately, effective levy collection is not about punishment. It is about safeguarding the operational and financial wellbeing of the entire community and ensuring the scheme can continue to function in the best interests of all owners.

Solver Property Services understands the financial and operational challenges that levy arrears can create within sectional title schemes and Homeowners Associations. With the right arrears management strategy, Body Corporates and Homeowners Associations can protect cash flow, maintain compliance and preserve the long-term value of their communities. Our team assists Trustees and Managing Agents with professional, legally compliant levy collection solutions tailored to the unique needs of each scheme. Whether it involves proactive arrears management, CSOS applications or recovery support, Solver Property Services is committed to helping communities remain financially stable, sustainable and well-managed.

Contact our team of specialists here for a quote to ensure compliance and stability.

Disclaimer: This article is for general informational purposes only and should not be considered legal advice. Community Schemes should consult professional legal advisors to ensure compliance with applicable laws and regulations.

Solver Property Services is a leading property management company in South Africa, dedicated to supporting community schemes since 2005. For more information, contact us at 010 822 2882 – our expert team is ready to assist you.

One of the most common questions in sectional title is also one of the most difficult to answer with a simple “yes” or “no”:

Who is responsible for paying when something needs to be repaired or replaced?

A leaking geyser. A cracked window. A burst pipe. Damp on an internal wall. A damaged balcony. A leaking roof. A blocked drain.

The answer is not always obvious.

In a sectional title scheme, understanding who is responsible for the maintenance, repair and replacement of a particular item requires looking at whether the item forms part of the owner’s section or the common property (as well as whether any exclusive-use rights or scheme rules affect the position).

This is why disputes about maintenance can become complicated. The person who discovers the problem is not necessarily the person who is responsible for fixing it or paying for it.

The starting point: section or common property?

The first question should always be:

Is the item part of the section or part of the common property?

The Sectional Titles Act provides the framework for dividing a development into individually owned sections together with jointly owned common property. The Sectional Titles Schemes Management Act 8 of 2011 (STSMA) then governs the management and financial administration of the scheme.

Broadly speaking:

Owners are generally responsible for maintaining their sections.
The body corporate is responsible for maintaining the common property.

The distinction can become more complicated where an item sits on or forms part of a boundary between a section and common property (or where an area is subject to exclusive-use rights).

This is why simply saying “it’s outside my unit, so the body corporate must pay” is not always correct.

What is common property?

Common property generally includes the parts of the scheme that do not form part of an individual section.

Depending on the scheme, this may include areas such as:

roofs
external walls
foundations
staircases
passages
driveways
communal gardens
communal facilities
certain plumbing and electrical infrastructure
structural elements of the building

The exact position should always be checked against the registered sectional plan, applicable rules and the circumstances of the particular repair.

The STSMA places an obligation on the body corporate to maintain the common property and keep it in a state of good and serviceable repair.

What is the owner normally responsible for?

An owner is generally responsible for maintaining and repairing their own section.

For example, this may include items that form part of the interior of the section and are not common property.

However, there are important exceptions and grey areas.

A good example is a window or door.

It is tempting to assume that because a window is physically inside or immediately adjacent to a section, the owner must automatically pay for it. However, the legal position depends on how the boundaries of the section are defined and how the particular element is treated under the sectional plan and applicable law.

This is why a proper assessment is often required before a repair responsibility is allocated.

A practical guide to common maintenance questions

The table below provides a useful, very basic, starting point. It is not a substitute for reviewing the sectional plan, rules and circumstances of the specific scheme.

Item / problem	Typical starting point	Important consideration
Roof	Body corporate	Generally common property and part of the body’s maintenance obligations
External walls	Body corporate	Structural/common-property responsibility generally rests with the body corporate
Foundations	Body corporate	Normally common property
Communal driveway	Body corporate	Generally common property
Communal garden	Body corporate	Subject to the scheme’s rules and any exclusive-use arrangements
Internal finishes	Owner	Generally part of the owner’s section
Internal plumbing	Owner or body corporate	Depends on where the pipe is located and whether it serves the section or common property
Main/common water pipe	Body corporate	Usually common-property infrastructure
Geyser	Depends	The position should be established from the sectional plan, rules and applicable legislation
Window	Depends	The boundary and legal classification must be considered
Garage door	Depends	The sectional plan and relevant boundaries are important
Balcony	Depends	A balcony may involve both section and common-property considerations
Exclusive-use garden	Depends	Exclusive use does not necessarily turn common property into privately owned property
Exclusive-use parking	Depends	Responsibility for costs can be affected by the nature of the exclusive-use right and the applicable rules
Common-property leak	Body corporate	The body corporate generally has responsibility for common property
Damage caused by a common-property defect	Depends	Responsibility for the underlying defect and resultant damage should be considered separately

That last point is particularly important.

The difference between the cause of the problem and the resulting damage

Consider this example:

A common-property pipe develops a leak and water enters an owner’s unit.

There are potentially two separate questions:

Who is responsible for repairing the pipe?
Who is responsible for repairing the damage caused by the water?

The answer to the first question does not automatically determine the answer to the second.

Insurance may also become relevant.

For this reason, owners and trustees should avoid immediately deciding who is liable based purely on where the water appeared.

Find the source first. Determine the responsibility second.

What about geysers?

Geysers are one of the most common sources of confusion in sectional title schemes.

An owner may reasonably assume that the geyser inside their unit is automatically their responsibility. A body corporate may have a different view depending on the scheme’s documentation and the location and classification of the installation.

The correct approach is not to rely on assumptions.

The scheme should consider:

the sectional plan
the position of the geyser
the pipework serving the geyser
the scheme’s rules
applicable legislation
the insurance policy
whether the issue relates to maintenance, replacement or resultant damage

A good managing agent should be able to help trustees identify the relevant documents and establish the appropriate process.

What about exclusive-use areas?

This is another area where owners frequently misunderstand the position.

An exclusive-use area is not necessarily privately owned property.

An owner may have the exclusive right to use a particular portion of common property (for example, a parking bay or garden), while the underlying property remains common property.

The STSMA specifically provides for additional contributions relating to certain exclusive-use areas to cover costs such as rates, insurance and maintenance (subject to the applicable rules).

This means that the question is not simply:

“Who uses the area?”

Instead, trustees should establish:

What is the legal status of the area and what does the legislation and scheme documentation say about responsibility for its maintenance and costs?

Who should appoint the contractor?

Another common problem occurs when an owner experiences an urgent maintenance issue and decides to appoint a contractor themselves.

That can create complications where the work relates to common property.

If an owner believes that the body corporate should be responsible for a repair, it is generally better to report the problem to the managing agent or trustees first, particularly where the work could involve significant expenditure.

This allows the body corporate to:

investigate the problem
establish responsibility
obtain appropriate quotations
consider insurance
approve the expenditure where required
appoint an appropriate contractor
keep proper records

There may obviously be situations involving genuine emergencies where immediate action is necessary to prevent further damage. Even then, the body corporate should be notified as soon as possible.

What happens when an owner fails to maintain their section?

The responsibility does not simply disappear because an owner does not attend to a problem.

The sectional title legislation and regulations provide mechanisms for dealing with failures to maintain sections and certain exclusive-use areas.

The regulations provide that where an owner fails to repair or maintain their section (or adequately maintain certain exclusive-use areas) and the failure continues after written notice, the body corporate may in appropriate circumstances remedy the failure and recover the reasonable cost from the owner.

This is an important protection for the wider community.

One owner’s failure to maintain their property can sometimes cause damage, inconvenience or expense for other owners.

What about insurance?

Maintenance responsibility and insurance responsibility are not necessarily the same thing.

A body corporate is required to insure the building in accordance with the STSMA and applicable regulations.

However, the existence of insurance does not mean every repair will automatically be covered.

When damage occurs, trustees should consider:

What caused the damage?
Is the affected property common property or part of a section?
Is the item insured?
What does the policy cover?
Is there an excess?
Was there a maintenance failure?
Is the repair preventative maintenance rather than insured damage?
Is there resultant damage that should be treated separately?

Insurance should therefore be considered alongside the maintenance responsibility rather than instead of it.

The maintenance plan matters

A financially healthy sectional title scheme should not be relying entirely on emergency decisions when major maintenance becomes necessary.

The STSMA requires a body corporate to establish and maintain a reserve fund that is reasonably sufficient for the future maintenance and repair of common property.

The regulations also provide for a maintenance, repair and replacement plan and reserve-fund budgeting.

This is where good sectional title management makes a significant difference.

A roof that needs replacing should ideally not come as a complete surprise.

A major waterproofing project should ideally be anticipated.

A body corporate should be able to look ahead and understand which significant components will require attention (and how those projects are likely to be funded).

So, who pays?

The short answer is:

It depends.

And that is precisely why maintenance disputes can become complicated.

Before deciding who must pay, a body corporate or owner should consider:

Is the item part of the section or common property?
What does the registered sectional plan show?
Are there exclusive-use rights involved?
What do the scheme’s management and conduct rules say?
Is the issue maintenance, repair or replacement?
What caused the damage?
Is there an insurance claim?
Is there resultant damage?
Is there a maintenance or reserve-fund provision for the work?
Has the correct authority been obtained before appointing a contractor?

The golden rule

Don’t start with “Who is going to pay?”

Start with:

“What exactly is the problem, and who is legally responsible for that part of the property?”

Once that has been established, the question of funding becomes much easier to answer.

Disclaimer

This article is for general informational purposes only and should not be considered legal advice. Community Schemes should consult professional legal advisors to ensure compliance with applicable laws and regulations.

Solver Property Services has managed community schemes since 2005 and combines property administration, financial expertise, maintenance oversight and compliance support in one hands-on service. Contact Solver to discuss your scheme’s needs and request a tailored property management proposal.