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Lecture 4
ENFORCEMENT OBLIGATIONS SECTIONAL OWNERS
What is the most effective way of enforcing your financial obligations? And
the most ineffective way?
A. FINANCIAL OBLIGATIONS [LAWSA 371-373]
What?
- ordinary/special levies
- must be paid into the administrative& reserve fund
- 14 days after budget trustees
- to get enough money into the coffers of b.c. so that they can finance the
maintenance &
management of the CP
Different financial obligations
1. Arrear levies recovered:
- Can be recovered in the magistrate’s court or regional ombud
STSMA s 3(2), (3) may recover Annexure 1 rule 25(1)
- Recovered via summary procedure that you institute for a debt
- Cheaper with the ombud – but not so clear how it works with an
ombud
- But cannot be recovered in the small claims court this is
because only natural persons can institute claims in SCC and the
BC is a juristic person
2. Reasonable legal costs STSM Reg. Annexure 1 rule 25(4)
- Owner must pay the reasonable legal costs for the collection of
arrears, as it taxed or agreed
- Ie. To find out what is reasonable, look at what is taxed or agreed
- Can include letters, managing agent, attorneys’ fees, court
expenses
- The BC must act swiftly to avoid th defence of waiver
- Without the recovery of reasonable legal costs, the enforcement
would be difficult because it has a deterrent effect (if you have to
pay levies AND costs… more likely to just pay levy)
3. Interest on arrears STSM Reg. Annexure 1 rule 21(3)(c)
- Must have a written trustee resolution
- must not exceed the maximum rate under National Credit Act
(2005) compounded monthly in arrear
- Falls under an Incidental credit agreement: 2% per month, but
compounded monthly in arrears it is 24% per year
- This is another effective deterrent because of interest
4. Suspension vote majority resolutions (Ann.1 r 20(2))
- When? non-payment of contributions after a court or adjudicator
has given an order
- only for majority resolutions – not for unanamous or special
resolutions
- the person who hasn’t paid their levy may still attend and speak,
but they may not vote
- if this happens, the mortgagee can vote as proxy
, 2
- unconstitutional? (s 10 dignity, privacy)
o no
o he can still attend the meeting
o and the mortgagee can vote as proxy
o and its only for majority resolution
o but it may be against the dignity and privacy of the person
- effective?
o Not really
o Because if they do not pay levies, they probably aren’t
interested in going to the meetings and voting
o most ineffective ways
5. Embargo: transfer unless certificate (STA s.15B(3)(a)(i)(aa))
- If levies are in arrears, he is not allowed to transfer his property
- Unless there is a certificate from a conveyancer that the levies
have been paid or that proisions have been made
- Must also get clearance from the municipality that your rates,
taxes and electricity has been paid(STA s 15B(3)(b))
6. Attachment movables (Magistrates’Court Act 32 1944 s65A(1)
FORMAT
- can attach the person’s movables
- but the problem is if the goods are subject to hire-purchase, it is
not theirs and they cannot attach it
- so not very effective
7. Attachment: incorporeal movables (Mag Courts Act s 68(3))
- money, negotiable instruments, debentures; interest in credit
transactions; rent
under lease
- can all be attached too
8. Request an emoluments attachment order from the court
- (65J)
- under which specific amounts of the salary of the debtor are
regularly paid to the
judgment creditor by the debtor’s employer
9. Attachment of unit
- BC can attach the sec t unit of the debtor and sell it in execution
- this is if the previous measures are unsuccessful
OVERSEAS SANCTIONS
1. ‘Name and shame’ Spain, Columbia: read out at general meeting
a. When the meeting starts, the chairman will read out that these
persons have not paid their levies
b. We would never allow this in SA because it would be an
infringement of dignity and privacy
2. Switch off water & electricity: mandament of spolie
a. If you don’t pay your levies, the BC switches it off
b. Cant be done here because you can get a spoliation order
Lecture 4
ENFORCEMENT OBLIGATIONS SECTIONAL OWNERS
What is the most effective way of enforcing your financial obligations? And
the most ineffective way?
A. FINANCIAL OBLIGATIONS [LAWSA 371-373]
What?
- ordinary/special levies
- must be paid into the administrative& reserve fund
- 14 days after budget trustees
- to get enough money into the coffers of b.c. so that they can finance the
maintenance &
management of the CP
Different financial obligations
1. Arrear levies recovered:
- Can be recovered in the magistrate’s court or regional ombud
STSMA s 3(2), (3) may recover Annexure 1 rule 25(1)
- Recovered via summary procedure that you institute for a debt
- Cheaper with the ombud – but not so clear how it works with an
ombud
- But cannot be recovered in the small claims court this is
because only natural persons can institute claims in SCC and the
BC is a juristic person
2. Reasonable legal costs STSM Reg. Annexure 1 rule 25(4)
- Owner must pay the reasonable legal costs for the collection of
arrears, as it taxed or agreed
- Ie. To find out what is reasonable, look at what is taxed or agreed
- Can include letters, managing agent, attorneys’ fees, court
expenses
- The BC must act swiftly to avoid th defence of waiver
- Without the recovery of reasonable legal costs, the enforcement
would be difficult because it has a deterrent effect (if you have to
pay levies AND costs… more likely to just pay levy)
3. Interest on arrears STSM Reg. Annexure 1 rule 21(3)(c)
- Must have a written trustee resolution
- must not exceed the maximum rate under National Credit Act
(2005) compounded monthly in arrear
- Falls under an Incidental credit agreement: 2% per month, but
compounded monthly in arrears it is 24% per year
- This is another effective deterrent because of interest
4. Suspension vote majority resolutions (Ann.1 r 20(2))
- When? non-payment of contributions after a court or adjudicator
has given an order
- only for majority resolutions – not for unanamous or special
resolutions
- the person who hasn’t paid their levy may still attend and speak,
but they may not vote
- if this happens, the mortgagee can vote as proxy
, 2
- unconstitutional? (s 10 dignity, privacy)
o no
o he can still attend the meeting
o and the mortgagee can vote as proxy
o and its only for majority resolution
o but it may be against the dignity and privacy of the person
- effective?
o Not really
o Because if they do not pay levies, they probably aren’t
interested in going to the meetings and voting
o most ineffective ways
5. Embargo: transfer unless certificate (STA s.15B(3)(a)(i)(aa))
- If levies are in arrears, he is not allowed to transfer his property
- Unless there is a certificate from a conveyancer that the levies
have been paid or that proisions have been made
- Must also get clearance from the municipality that your rates,
taxes and electricity has been paid(STA s 15B(3)(b))
6. Attachment movables (Magistrates’Court Act 32 1944 s65A(1)
FORMAT
- can attach the person’s movables
- but the problem is if the goods are subject to hire-purchase, it is
not theirs and they cannot attach it
- so not very effective
7. Attachment: incorporeal movables (Mag Courts Act s 68(3))
- money, negotiable instruments, debentures; interest in credit
transactions; rent
under lease
- can all be attached too
8. Request an emoluments attachment order from the court
- (65J)
- under which specific amounts of the salary of the debtor are
regularly paid to the
judgment creditor by the debtor’s employer
9. Attachment of unit
- BC can attach the sec t unit of the debtor and sell it in execution
- this is if the previous measures are unsuccessful
OVERSEAS SANCTIONS
1. ‘Name and shame’ Spain, Columbia: read out at general meeting
a. When the meeting starts, the chairman will read out that these
persons have not paid their levies
b. We would never allow this in SA because it would be an
infringement of dignity and privacy
2. Switch off water & electricity: mandament of spolie
a. If you don’t pay your levies, the BC switches it off
b. Cant be done here because you can get a spoliation order
