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How trustees calculate and set levies: a step-by-step levy budget guide

Every month, a levy statement lands in the inbox of thousands of sectional title owners across South Africa. For many, it is a number they pay without fully understanding where it comes from, what it covers, or what happens if they stop paying. Understanding the levies meaning behind that monthly figure closes a gap that matters: once you grasp the logic of levy calculations, the whole system makes sense.

A levy, in the sectional title context, is every unit owner’s monthly contribution toward the shared costs of running their scheme. The Sectional Titles Schemes Management Act (STSMA) technically uses the word “contribution,” but in practice the industry uses “levy” interchangeably. It covers everything from security guards to roof repairs, from building insurance to managing agent fees. It is neither a fine nor a discretionary charge, it is your fair share of the community’s running costs, allocated by participation quota (PQ) based on floor area, as provided for under the STSMA.

At Solver Property Services, preparing, explaining, and defending levy budgets is one of the most time-intensive parts of our work. That tells you something: levies are central to a financially healthy scheme, and getting them right matters. This guide walks you through everything, from the legal definition through to calculation, enforcement, and a practical checklist you can use every month.

Levies meaning: what levies actually mean for South African sectional title owners

Because the STSMA uses the word “contribution” rather than “levy,” some owners are surprised to learn their payment has statutory force. What matters is the legal substance: a levy is a mandatory periodic payment imposed on unit owners by the body corporate. It is not a charge from the municipality. It is a charge from your own scheme’s governing body.

This distinction separates levies from municipal rates entirely. Municipal rates are charged by your local municipality, calculated on the assessed value of your property, and used to fund public infrastructure such as roads, sewerage, and street lighting. Body corporate levies are charged by the scheme and fund shared private costs like security, cleaning, garden services, building insurance, and managing agent fees. In a sectional title property, you pay both. In a freehold home, there is no body corporate levy, the freehold owner handles their own maintenance and pays rates directly to the municipality.

Trustees set the levy amount each year when they approve the annual budget at the Annual General Meeting (AGM). Every registered unit owner is legally obligated to pay. If you rent your unit out, that obligation does not transfer to your tenant. Whatever private arrangement exists in the lease, the body corporate holds you, the owner, responsible for every cent.

Monthly levies, special levies, and reserve funds: what is the difference?

Most owners are familiar with the monthly levy that appears on their statement. This is the administrative fund levy, and it covers the scheme’s day-to-day operational costs: security, cleaning, garden services, building insurance, managing agent administration fees, water and electricity for common areas, and audit fees. Trustees estimate these costs for the year ahead, total them up, and divide the amount among owners according to each unit’s PQ. It is recurring, predictable, and approved at the AGM.

Separate from the administrative fund is the reserve fund. The STSMA requires every body corporate to maintain a reserve fund specifically for future capital repairs, such as roof replacements, lift overhauls, or resurfacing of driveways. Each month, owners should contribute a portion of their levy toward this fund. A multi-year maintenance and repair plan typically informs how large the reserve fund needs to be. Underfunding the reserve is one of the most common financial mistakes in sectional title schemes, and the consequences arrive later as sharp, reactive special levies that blindside owners.

A special levy is a once-off or time-limited charge raised when an unexpected expense arises that existing funds cannot cover. The power of trustees to raise a special levy without a full AGM vote depends on the scheme’s own rules and the STSMA’s Prescribed Management Rules (PMRs), owners should review those provisions carefully, as some schemes require an owners’ resolution before a special levy can be imposed. Common triggers include burst/leaking pipes on common property, emergency roof repairs, or a large insurance excess after a claim. From our experience ay Solver Property Services, special levies generate the most friction between owners and trustees, which is why transparency around the reason and the amount is non-negotiable, it is simply good governance.

Levy calculation South Africa: how trustees build the levy budget

A levy budget is an income-and-expense forecast for the scheme’s coming financial year. The standard line items include utilities for common property (municipal rates and utilities for more info), building insurance, security and access control, landscaping and cleaning, managing agent administration fees, audit and accounting fees, bank charges, maintenance provisions, reserve fund contributions, and the CSOS levy.

Once the total annual budget is approved, it is divided among owners using each unit’s participation quota. The PQ is calculated as the unit’s floor area as a proportion of the total floor area of all sections in the scheme, expressed as a percentage to four decimal places. The formula works as follows:

Unit annual levy share = (Unit PQ ÷ Total PQ) × Annual budget Monthly levy = Annual share ÷ 12

To make this concrete: if a scheme’s total annual administrative fund budget is R240,000 and the reserve fund contribution is R60,000, the combined annual budget is R300,000. A unit with a 15% PQ contributes 15% of that total, R45,000 per year, or R3,750 per month.

CSOS levy calculation

The CSOS levy is applied to the administrative fund portion of each unit’s monthly levy. It is calculated at 2% of the amount by which the monthly administrative levy exceeds R500, capped at R40 per unit per month. In the example above, the administrative fund portion is R3,000 per month (15% of R240,000 ÷ 12). The amount above R500 is R2,500, and 2% of that is R50, which exceeds the R40 cap, so the CSOS levy is R40. The owner’s total monthly payment is R3,750 plus R40, which equals R3,790.

Solver Property Services prepares levy budgets on behalf of trustees across schemes in Gauteng, Cape Town, and KwaZulu-Natal, benchmarking line items against comparable schemes and identifying areas where costs can be reduced without compromising service levels. Accurate budget preparation from the outset reduces the likelihood of mid-year special levies and builds owner confidence in the scheme’s financial management.

When levies go unpaid: consequences and legal recovery

The collection process follows a predictable sequence. The body corporate issues a statement, then formal demand letters, and then hands the matter to either CSOS Specialists or attorneys for the collection thereof. Unpaid levies generally attract interest of up to 24% per annum where this has been authorised by a written trustee resolution under the Prescribed Management Rules. Legal and collection costs are added to the defaulting owner’s account.

One of the most effective enforcement tools is the transfer blockage. The Registrar of Deeds cannot register the transfer of a sectional title unit until all levy arrears are settled or adequately secured. This means an owner who wants to sell is stuck until the arrears are cleared. In serious cases, the body corporate can obtain a warrant of execution, attach movable assets, and pursue sale in execution of the unit itself if the debt remains unsatisfied. They can also apply to the courts to have the electricity of that unit disconnected.

The most common disputes trustees and managing agents encounter relate to the validity of a special levy, an incorrect PQ applied to a unit’s account, or interest charged at a rate not properly documented. Most of these disputes can be resolved through the Community Schemes Ombud Service (CSOS), which offers a cost-effective alternative to litigation. Accurate record-keeping of all levy resolutions, budget approvals, and payment histories is the first line of defense in any dispute.

A practical levy account checklist for trustees and owners

Every levy statement contains information worth checking. Running through a short checklist each month takes five minutes and can save you from paying incorrect amounts or missing errors that compound over time.

The levy amount matches the budget approved at the most recent AGM for the current financial year
The participation quota applied is the correct one for your specific unit
Any special levy is supported by a valid resolution with a clear stated reason
Interest charged on arrears is within the rate approved and resolved by the trustees
The CSOS levy is separately itemised
The reserve fund contribution appears as a separate line item, not merged with the administrative fund levy
Any credit balance from advance payments is reflected correctly on the account

A professional managing agent reconciles each owner’s account regularly, issues levy clearance certificates for transfers, and flags arrears before they escalate into CSOS or legal proceedings. Solver Property Services manages levy administration across schemes in Gauteng, Cape Town, and KwaZulu-Natal, preparing compliant budgets, advising trustees on special levy resolutions, and implementing cost-saving measures that protect community funds without reducing service levels. For trustees who want accurate, transparent levy management without carrying the full administrative burden themselves, the right managing agent is the difference between a financially healthy scheme and a costly one. Get in touch with our team to find out how we can support your scheme.

Understanding levies meaning: a sharper view of your monthly statement

A levy is not a tax, not a municipal rate, and not a punishment. Understanding the levies meaning behind that monthly statement, that it represents every owner’s fair share of the cost of maintaining the community they live in, changes how you engage with your scheme’s finances. When levies are calculated correctly, collected consistently, and administered transparently, a scheme stays financially healthy and its residents stay informed. When they are mismanaged or ignored, the consequences range from deteriorating common areas to legal proceedings and blocked property transfers.

Use the checklist above, understand the three fund types, and know your participation quota. If the numbers on your levy statement ever don’t add up, ask questions. A well-run scheme always has answers, a competent managing agent always has the records to back them up, and proactive engagement with your levy account is one of the most practical things any owner or trustee can do.

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.

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.