Levies in sectional title properties refer to the fees that owners are required to pay to the body corporate of the sectional title scheme. These levies cover the costs associated with the maintenance, management, and insurance of the common property shared by all owners. Here are the main components of levies:
1. Maintenance Costs:
This includes expenses for the upkeep of shared areas like gardens, pools, hallways, and any communal facilities. Regular maintenance helps preserve the property’s value.
2. Utilities:
Levies may include costs for communal services such as water, electricity, and waste management. These are typically divided among owners based on their participation quota.
3. Insurance:
The body corporate must insure the common property and sometimes the buildings themselves. The cost of this insurance is included in the levies.
4. Reserve Fund:
A portion of the levies is often allocated to a reserve fund, which is used for major repairs and improvements that are not part of the regular maintenance budget, such as roof repairs or renovations.
5. Administrative Costs:
This covers the operational expenses of the body corporate, including salaries for management staff, legal fees, and any other administrative costs associated with running the sectional title scheme.
Levies are typically determined at the annual general meeting (AGM) and can vary based on the financial needs of the body corporate. Owners need to stay informed about levy increases and the financial health of their sectional title scheme.
Sectional title levies in South Africa play a vital role in maintaining the financial health and functionality of a sectional title scheme. By covering costs such as maintenance, utilities, insurance, and reserve funds, these levies ensure that shared properties remain in excellent condition. Property owners should stay informed about levy structures, possible increases, and how funds are allocated to make informed decisions about their investments. Understanding these costs will help them navigate sectional title living with confidence.