Sectional title corner – What is the maximum arrears interest I can be charged?
Hi there, I am behind on my levy payments by more than R13,000. My body corporate is charging me 5% in arrears interest which is equal to R650 per month (or R7,800 per year) – on top of our monthly levies which is R1,800. So, effectively, I am paying R2,450 per month in levies. I heard that the arrears interest cap is now in line with the National Credit Act? What does this mean for me now? – Lebo
Dear Lebo, you heard correctly. The new Sectional Title Schemes Management Act states that interest on overdue levy amounts may be charged at a rate not exceeding the maximum interest rate per the National Credit Act, that being the rate for incidental credit agreements limited to 2% per month compounded being an effective annual rate of 26.82%.
You can refer the matter to the Ombud.
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Who is Karien Coetzee?
Karien Coetzee is the national property management consultant at property management company, Trafalgar. She holds qualifications in sectional title schemes management and homeowners association management.