A Gauteng couple’s attempt to sell their property to settle outstanding levies has been rejected by the Gauteng High Court in Pretoria, landing them in a sequestration battle. The couple, who owed over R385,000 in unpaid levies to the Body Corporate of Parkview, argued that they could settle their debt by selling their home. However, the court found that the proposed sale was not legally solid or guaranteed to go through, and therefore could not be relied on to pay what they owed.
The couple’s unpaid levies, which had grown significantly over time from about R15,000 in 2017, were deemed a significant burden on the community scheme. The Community Schemes Ombud Service has emphasized the importance of levy contributions, stating that they are the lifeblood of all community schemes. Owners who fail to contribute towards the levy fund are being subsidized by those who pay their monthly contributions.
Understanding Levy Contributions
According to the Community Schemes Ombud Service, body corporates cannot disconnect or reduce electricity supply, terminate or reduce water supply, or deny or limit access to the scheme due to outstanding levies. However, this does not mean that homeowners are exempt from paying their levies. In fact, the service notes that levy contributions are essential for the maintenance and upkeep of community schemes.
Some experts, such as South African law specialist Ernst Serfontein, point out that levies do prescribe after three years, and homeowners can use this as a defense when tackled. However, this was not the case in this matter, as the respondents did not seek to rely on prescription.
Sequestration Proceedings
Instead, the respondents argued that a R480,000 sale of the Parkview property would cover the outstanding amount and make sequestration unnecessary. However, the court found that the plan was flawed, as the property was not solely owned by the respondents. The court noted that the first respondent and his former spouse held the property in undivided half shares, and that the co-owner had not agreed to the transaction.
The court also found that even if the deal were to proceed, the numbers did not add up. Once the outstanding bond and costs were deducted, only half of the remaining proceeds would flow into the joint estate – an amount that would fall short of settling the debt. The respondents’ arithmetic, which treated the full purchase price as available to settle the debt, was deemed flawed at its root.
- The couple’s unpaid levies had grown from R15,000 in 2017 to over R385,000 by mid-2024.
- The proposed sale of the property was not legally solid or guaranteed to go through.
- The court found that the plan was flawed due to the property being held in undivided half shares by the first respondent and his former spouse.
The court ultimately granted a provisional sequestration order, meaning the couple’s estate is now under legal process that could lead to their assets being sold to pay creditors. This ruling serves as a reminder to homeowners of the importance of paying their levies on time and the potential consequences of failing to do so.
