Page 74 - Q&A

Can your body corporate charge more levies
because of Covid-19?

May 2020
“The body corporate at our complex doubled our levies last month and only
sent out a general notice to all the owners informing us that the increase was
because the body corporate had to comply with Covid-19 regulations and
install sanitizers, get protective gear for cleaners etc. I understand this costs
money and must comply, but surely we should have been consulted before the
levies were just increased?”
To unpack the answer, we must look at the provisions of the Sectional Titles
Schemes Management Act 8 of 2011 (“STSMA”). Section 2(1) determines
that a body corporate consists of all the owners of units in a sectional title
scheme and are collectively referred to as the members of the body corporate.
Section 11(2)(a) and (b) of the STSMA further stipulates that the members may
make rules which establish how levy contributions by owners can be increased
Property by special resolution, provided that where an owner is adversely affected, the
rules can only be modified by special resolution with the prior written consent
of the owner.

Section 1 of the STSMA defines a special resolution as a resolution passed
by a minimum of 75% of the votes of the members, both in value of the votes
(as determined by the participation quota of each owner) and in number.
This would need to be met in order to pass a special resolution which could
increase levies. If this is not met, then the decision by the body corporate to
increase levies would not be valid.

Assuming, that the requirements for a special resolution are met, then it still
stands to be considered whether an owner is adversely affected, and if so if
his consent was obtained. As the term “adversely affected” is not specifically
defined, our courts have had to provide guidance. Our courts have held that,
amongst other things, regard should be given to the percentage increase.
For example, a 100% increase could be seen as adverse, however, the
duration of the increase should also be considered. If the increase is not of
a permanent nature, it may not qualify as “adversely affecting” the owner. In
general, if an increase unfavorably changes the liability of the owner to make
levy contributions, then it could be held to hold an adverse effect for the owner
and the consent of the owner would be needed.

Therefore, if a special resolution was validly passed by the body corporate, but
the levy increase is permanent in nature, then there could be a strong argument
that you have been adversely affected and it would have required your prior
written consent for the increase of the levy to be valid.

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