It is not uncommon that when people are debt-ridden that they also get into arrears with levies. The amount of levies payable is determined by means of the approved budget for the financial year divided by the participation quota of the sectional title scheme. The levies are used to pay local authority services, cleaning, maintenance, etc. If one or more owners are in arrears, it then impacts on the cash-flow of the scheme. If the scheme does not have cash reserves, water and electricity may be cut off; the lift may be taken out of use (as precaution) if not being serviced; etc. If the owner-in-arrears succeeds in an application for debt review, the remainder of owners may have to tide the scheme’s cash-flow problems over for an extended period. This in turn impacts on the personal cash-flow of other owners and may place the body corporate under severe strain with regard to costly maintenance; not to mention pensioner-owners. How fair is this?
Revised 17 May 2010