Q&A – 2020 12

By the Paddocks Club team

Below are examples of two questions on the Paddocks Club discussion forum, to show you what is available to our Community members!

Can a body corporate withhold a levy clearance certificate for levies due on another unit?

Member’s question:

Good day Paddocks,

Can a body corporate withhold a levy clearance certificate on a specific unit due to non-payment of levies on another unit owned by the same person?

Regards

Graham’s answer:

Dear member,

No. The BC can only withhold the clearance certificate if amounts are due in respect of that unit.

This is stated in section 15B(3)(a)(i)(aa) of the Sectional Titles Act, which requires that:

(the) body corporate has certified that all moneys due to the body corporate by the transferor in respect of the said unit have been paid, or that provision has been made to the satisfaction of the body corporate for the payment thereof; (underlining added for emphasis)

It is important to remember that the Sectional Titles Act remains relevant whenever there is a survey or registration-related issue.

Regards,
Graham

Do fine amounts need to be specified in the conduct rules of a sectional title scheme?

Member’s question:

Good day Paddocks,

We submitted rules to CSOS who approved same. Penalty clause read that members will decide on the amount for the penalties each year at the AGM. The actual penalty amounts were not registered with the rules – so if members decide at AGM to amend the penalty amounts for the year ahead, they won’t have to re-register the rules.

Someone informed us that the penalty amount/s need to be registered with the rules, otherwise they won’t be enforceable. The rules/process did allow for a first and second notice to go out to the owner before penalties were issued. These notices did inform the owner of the possible penalty amounts (as per a resolution of penalty amounts by members at the last AGM) and CSOS approved the rules without the penalty amounts being attached to the rules.

Thank you.

Graham’s answer:

Dear member,

In principle, the setting of fines at the AGM each year by majority owner vote appears to be a fair and transparent way of dealing with the issue – and it caters for inflation and other changed circumstances, introducing a sensible degree of flexibility into the provision.

The rules must specifically cater for the fine, but if the amount of the fine is not actually specified in the text of the rule I don’t think this means the fine is not enforceable, as long as the amount of the fine is determinable in accordance with a process that is set out in the rules – which seems to be the case here.

You read the fining rule with the latest applicable owner resolution.

Regards,
Graham


Article reference: Paddocks Press: Volume 15, Issue 12.

Graham Paddock is available to answer questions on the Paddocks Club discussion forum for Community members. Get all your questions answered by joining Paddocks Club.

This article is published under the Creative Commons Attribution license.

Back to Paddocks Press – December 2020 Edition.

Source: https://www.paddocks.co.za/paddocks-press-newsletter/qa-2020-12/

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