Separate rates bills for sectional owners
Sectional title homeowners are bracing themselves for separate billing systems next month even though most of them don't have their final valuations and are unsure what to pay, where and how.
In terms of the new Municipal Rates Act, each individual unit owner will be billed separately from the beginning of July, and must pay the council directly.
Rates and taxes will be removed from the monthly levy and separate statements for this will be issued.
Previously, a body corporate received one rates and taxes account and charged each owner a share as part of their monthly levy.
Marina Constas of BBM Inc Attorneys says the consequence of the new rating system is that sectional title owners will face high increases in rates.
But she warns that the council will sue owners if they don't pay.
Constas says that bodies corporate are obliged to pay any arrears to the council or make arrangements to pay, otherwise no unit transfer will take place or a clearance certificate issued.
Failure by bodies corporate to properly deal with the changeover will adversely affect the value of the housing units in the complex.
Constas says the council stands to earn huge revenues from this system.
Sifiso Msomi of Shepstone & Wylie Attorneys says it is critical for sectional title homeowners to obtain their property's final valuation and to know the exact amount they need to pay in order to retain their units.
He says that when buying a sectional title, you not only buy a unit, but also an interest in the common property such as stairways, entrance foyers, elevators, driveways, gardens, swimming pools and security.
You are responsible for maintaining your own unit, while control, management, administration and maintenance of the complex and common property are the body corporate's responsibility.
The body corporate is represented by a board of trustees, which manages and administers the affairs of the property on behalf of the owners.
Msomi says: "Being a body corporate member makes you liable for any of its debt and it is essential that you scrutinise the financial statements of the body corporate before you purchase in a particular complex."
He says that with the new rates system, owners' levies will be decreased as rates will no longer be included in this amount.
But he warns that the total amount payable may increase as the new rates may well be higher than previously.