Some residents of sectional title complexes have found themselves in the dark after failing to pay their levies and electricity charges.
The courts are not sympathetic to sectional title property owners who are accumulating substantial arrear levies and electricity charges, says BBM Law director Marina Constas.
Court action may be a “tough step” for the trustees to take, but in the current challenging financial times, body corporates are struggling and cannot carry the substantial debts that are being racked up by non-payment of levies.
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All sectional title role players, including owners and tenants, should be aware that it is legally possible to cut off the electricity of a levy payment defaulter with a High Court order
“In the recent cases that we have been involved in, there have been significant amounts of money at stake. In one of the recent matters, the owner owed the Body Corporate just over R100,000. It is interesting to note that orders were granted for much smaller amounts, too,” she says.
If a body corporate does not recover payments, it will be forced to advance monies to the Council on behalf of section owners who do not pay for electricity consumption. This is an untenable situation and trustees have a fiduciary duty to see that they collect the arrear charges.
Constas says the Community Schemes Ombud Service (CSOS) has held that trustees in apartment buildings and complexes do not have the legal right to terminate or reduce electricity services because an owner is in arrears with their levies. And while owners with arrear levies may have felt protected by this CSOS directive, there is more to it.
“If the owner has built up substantial arrear levies – including electricity payments – the trustees can certainly obtain a High Court order to disconnect the power.”
In a recent case involving arrear levies and electricity charges of more than R300 000 owed by an owner at a complex in Killarney, Gauteng, the owner sought to challenge the High Court disconnection order against him. This, she says, failed too. In addition, a costs order was obtained against him.
“I recommend that body corporates go to court when more than R20 000 is owed in arrear levies and electricity charges. If the property is occupied, I believe that a court order to disconnect the electricity is the best way to recover what is owed by the defaulting owner. Once the High Court has issued the order, the Sheriff will go and disconnect the power to the unit. The disconnection applications do not relate to schemes with pre-paid meters.”
BBM Law is currently charging a fixed fee to bodies corporate for a High Court application to cut off a unit’s electricity. This cost can be placed on the owner’s levy account once it has been taxed and recovered by the body corporate. If the owner still fails to pay what is owed, the trustees can proceed immediately with a warrant of execution and inevitably an application to attach and sell the unit.
“The message from the courts is clear,” Constas says.
“Trustees and managing agents do have the power to disconnect the electricity with a High Court order when a sectional title owner consistently fails to pay arrear levies – including electricity charges. I urge bodies corporate to not shy away from court action, which is increasingly proving the best way to hold defaulting owners to account.”