How To Successfully Collect Sectional Title Levies Past The Due Date
Collecting levies from owners/members of sectional title units are distressful for most managing agents and trustees of bodies corporate. The most common way would be by the issue of summons. The managing agent representing a body corporate instructs an attorney to issue a summons for the arrears outstanding on the unit. This is widely used in collecting outstanding arrears but is beset with pitfalls.
The practical difficulties with the summons procedure
After serving a summons it can take two to three months to obtain a judgment, if one is fortunate, by which time the owner has fallen further into arrears.
Managing agents and trustees should be mindful of the fact that, especially in the Johannesburg Magistrate’s Court, it is becoming more difficult to obtain a judgment because of administration difficulties.
Delaying difficulties with the summons procedure
To delay payment of arrears, unnecessary legal costs are incurred by unscrupulous owners who instruct creative attorneys to defend a summons. When the matter comes to court, the levies are substantial. It can take up to eighteen months for a case to be heard in court. During this period, invariably no levies or utility fees are being paid but there is a way to deal with such owners.
After judgment has been granted
After obtaining a judgment, attachment of the movable assets of the owner follows.
It is imperative for Trustees of bodies corporate to always be in possession of the current address of the owner. The unit is usually rented and it would be futile instructing the sheriff to attach the movable goods in the unit, if the furniture and appliances belong to the tenant, unless the unit is let fully furnished.
The sheriff often finds insufficient movable assets to attach to the owner’s residence. At this stage, many practitioners instruct the sheriff to remove the goods attached and arrange for a sale in execution. This practice views this method a waste of time and because, pending on the sale of the assets, they are stored at the sheriff’s warehouse at considerable expense, which expense must be borne by the body corporate. These proceeds are often insufficient to cover the storage and removal costs, which increases the costs and claim even further.
Attorneys who bring an application to sell the owner’s immovable property find it takes time and often, by the time that the court authorizes the sale, there is already a judgment against the immovable property of the bondholder.
Bondholders control the sale of the immovable property, in that they can dictate the price at which the property is to be sold. The body corporate has no say when the sheriff sells a property. As transfer will not take place without a clearance certificate from the managing agent, the new owner will be liable to pay the arrears owed to the body corporate and the legal costs in full when the bondholder consents to the sale.
JA Attorneys specialize in sectional title debt collection matters. Be sure to contact us for immediate assistance regarding your matter.