Sectional title corner – Does the buyer inherit special levy payments?
Hi, who is liable to pay the reserve fund levy upon the change of hands of the unit during the financial year? This levy was tabled and approved before registration into the new owner’s name.
The offer to purchase between the seller and purchaser reads that
1.1 The seller confirms that:
1.1.1 The purchase price is sufficient to settle all outstanding obligations relevant to the sale of the property including, but not limited to, the existing bonds, agent’s commission, outstanding statutory fees and/or levies, or any other costs normally associated with the transfer of property;
1.1.2 In the event of any shortfall as referred to in 8.2.1 above, such shortfall shall be paid by the seller to the conveyance on demand.
I would appreciate your response as this Reserve Fund Levy amounts to R6,939 per month.
- The monthly levy is R2,327 per month,
- The special levy for current SPECIAL MAINTENANCE PROJECT is R6,939 per month,
- And R6,939 for the reserve fund.
It’s more than R16,205 per month just for levies then you still have to service your bond as well as pay other utilities.
The body corporate decided to use the entire budget of the special project as a reserve fund levy. This is, to my knowledge, a special project that will not be repeated in the next 10 years as we have a guarantee from the damp contractor on this maintenance.
Could this be possible? – Erna
Hi Erna, with regard to maintenance reserve it is ongoing from time of budget and will be accommodated by the owner in any sectional title complex as it is now legislated.
However, the noted R6,939 per month cannot be right. Normally if it is worded as “Special Levy” then the seller must pay this in full prior to registration.
The maintenance reserve levy is part of the fixed budget.
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Answered by Petra Lewis, portfolio manager at Belmont Property Management