Does the Levy include Municipal Rates?

Does the Levy amount charged by the Body Corporate include Municipal Rates?

Rates, taxes and levies are monthly costs that the Body Corporate and local Municipality charge in order to fund the services they provide.

The Body Corporate levies usually cover the costs associated with running the estate and include such items as management, security, repairs, garden, pool and common property maintenance, and common property electricity. The Body Corporate and Trustees present a budget for the year at the AGM and once approved, is calculated and apportioned according to a participation quota and divided amongst unit owners into a monthly levy amount. Unit owners are fully within their rights to request and inspect the financial statements and management accounts of the Body Corporate, and should attend meetings such as AGMs and other Special General Meetings to be kept up-to-date and fully informed with scheme proceedings.

The Sectional Titles Act outlines the fair and equal distribution of shared costs for an effectively run scheme. Etchells & Young would strongly advise that owners of sectional title units familiarise themselves with the Act and the relevant section on levies.

* With a rental property, the Levies are usually still paid for by and are the responsibility of the Landlord without reference to the Tenant, unless stated otherwise in the lease.

The Municipal rates, taxes and levies, on the other hand, cover services provided by the local municipality to a neighbourhood or area and includes sewerage, refuse collection, road maintenance and street light maintenance. The amount levied is calculated according to the land value and any improvements/buildings added to it, based on the property’s market value.

* With a rental property, the Municipal rates & taxes are also usually paid for by and are the responsibility of  the Landlord without reference to the Tenant. However, depending on the stipulations of the lease agreement, the Tenant is usually responsible for consumption based items such as water, electricity, gas, etc and items directly related to the use of the property such as sewerage, refuse collection, service and network charges that appear on the Municipal account.

The rates and taxes charged by City of Jo’burg is separate from the levies amount that the Body Corporate of a Sectional Title scheme bills to the owner. Payment of rates and taxes is the responsibility of the owner and does not fall to the Body Corporate.  (Before 2007, many Body Corporates did collect the rates and taxes together with levies and paid these over to CoJ on behalf of the owners. This law has since changed and it is now each individual owner’s responsibility to ensure an account is opened and paid).

On transfer, CoJ automatically open an account in the new property owner’s name based on the Deeds Office information they obtain.  The Attorney attending to the transfer and/or the Estate Agent who handled the sale, should inform the new home owner of this and advise on the process.  

The City of Joburg are generally very accommodating and approachable in assisting with account payments and entering into a payment arrangement to pay off larger debts; however, the owner would need to speak to CoJ directly. Home owners may request that a monthly rates and taxes statement be sent via email.