Levy Collection in South Africa: The Complete Guide for Body Corporates and HOAs
In short: Every owner in a sectional title scheme or homeowners’ association (HOA) must pay levies. When an owner falls behind, trustees and directors have a duty to act promptly: send a demand, then recover the debt through the Community Schemes Ombud Service (CSOS) or the courts, and, as a last resort, enforce a judgment against the owner’s property. Acting early protects the scheme’s cash flow and prevents older arrears from prescribing.
Unpaid levies are one of the biggest threats to a community scheme. When one owner stops paying, the other owners end up funding security, maintenance, insurance and municipal services on that owner’s behalf. Left unchecked, arrears grow quickly, reserves run dry and paying owners start to feel that the rules don’t apply equally.
This guide explains, in plain English, how levy collection works in South Africa: what the law requires of owners, the steps trustees should follow, and the choices available when an owner will not pay.
What are levies, and who must pay them?
Levies are the contributions owners pay to cover the running costs of the scheme: common property maintenance, insurance, security, management fees, municipal charges for common areas and contributions to the reserve fund.
Sectional title schemes. The Sectional Titles Schemes Management Act 8 of 2011 (STSMA) requires the body corporate to raise funds for its administrative and reserve funds by levying contributions on owners, generally in proportion to each unit’s participation quota. The Prescribed Management Rules set out how levies are raised and when they fall due.
Homeowners’ associations. An HOA is usually a non-profit company. Its members’ obligation to pay levies comes from the memorandum of incorporation (MOI) and the estate’s rules, which every owner agrees to when they buy in the estate.
Owners can’t simply withhold levies. An owner who disagrees with a levy increase or a special levy must still pay it. In Body Corporate of Fish Eagle v Group Twelve Investments (Pty) Ltd 2003 (5) SA 414 (W), the court confirmed that a member may not withhold levies because they dispute the necessity or financial wisdom of the trustees’ decision. Deciding on and collecting levies is the trustees’ job, not the individual owner’s. The owner’s remedy is to challenge the decision through the proper channels, not to stop paying.
The levy collection process, step by step
Most arrears are resolved in the first two steps. The later steps exist for owners who won’t engage.
- Adopt a clear arrears policy. Trustees should resolve in advance when reminders go out, when interest is charged and when an account is handed to attorneys. A written policy applied to every owner avoids claims of unfair treatment.
- Send a reminder and statement. As soon as a levy is missed, the managing agent should send a statement and a friendly reminder.
- Send a letter of demand. If the account remains unpaid, an attorney’s letter of demand sets a deadline and warns of legal action and costs. Many owners pay or propose an arrangement at this stage.
- Agree a payment arrangement, in writing. Where an owner can’t pay in full, a signed acknowledgement of debt with a realistic payment plan secures the debt and interrupts prescription.
- Take legal action. If there’s still no payment, the scheme applies to CSOS or issues summons in court (see the next section).
- Obtain judgment. Where the owner doesn’t defend, or has no real defence, the scheme can obtain default or summary judgment.
- Enforce the judgment. A warrant of execution allows the sheriff to attach movable assets. If that doesn’t satisfy the debt, the scheme can ask the court to declare the unit or erf specially executable.
At every step, keep accurate records: levy schedules, trustee resolutions, statements and all correspondence. Good records are what win levy claims.
CSOS or court?
Schemes can usually choose between two routes. The right one depends on the amount, how quickly you need an enforceable order and whether the owner is likely to dispute the debt.
CSOS. The Community Schemes Ombud Service Act 9 of 2011 created a low-cost dispute resolution service for all community schemes, including sectional title schemes and HOAs. Under section 39 of the Act, an adjudicator can order an owner to pay contributions that are due. CSOS starts with conciliation and moves to adjudication if that fails.
The courts. A levy claim is a claim for a fixed amount of money, and schemes regularly recover arrears by issuing summons. The district Magistrates’ Court hears claims up to R200,000 and the Regional Court claims up to R400,000; larger claims go to the High Court.
| CSOS | Court | |
|---|---|---|
| Cost | Low application fees | Higher legal costs, but usually recoverable from the owner |
| Speed | Varies; can be slow in busy regions | Undefended matters can reach judgment quickly |
| Outcome | Adjudication order | Court judgment |
| Enforcement | Order must be taken to court to enforce | Enforce directly with a warrant of execution |
| Best for | Disputed amounts, smaller schemes, owners who want to engage | Undisputed arrears, repeat defaulters, larger debts |
For most straightforward arrears, particularly where the owner simply isn’t paying, court proceedings are the faster route to an order the sheriff can enforce.
Don’t wait: prescription, interest and costs
Levies prescribe after three years. Under the Prescription Act 68 of 1969, an ordinary debt such as a levy is extinguished three years after it falls due. Each monthly levy is a separate debt with its own three-year clock, so a scheme that waits too long can lose its right to the oldest arrears. Prescription is interrupted when the owner acknowledges the debt in writing or makes a payment, and when summons or an application is served. Read more in our article on the prescription of levies.
Interest. The Prescribed Management Rules allow trustees to charge interest on arrear levies at a rate they determine, capped by reference to the maximum rate permitted under the National Credit Act. HOAs must look to their MOI and rules. Interest should be charged consistently and in line with the scheme’s resolutions.
Legal costs. The management rules and most HOA MOIs make a defaulting owner liable for the legal costs the scheme incurs in recovering arrears, often on the attorney-and-client scale. That means paying owners shouldn’t carry the cost of chasing those who don’t. Check your scheme’s own rules for the exact wording.
What schemes should not do: self-help
It can be tempting to put pressure on a defaulting owner by cutting off their water or electricity, deactivating their gate remote or preventing them from entering the complex. These measures carry real legal risk. An owner who is deprived of something they peacefully possess can bring an urgent spoliation application, and the scheme may end up paying the owner’s legal costs as well as its own.
The line isn’t always obvious. In Koko v Mont Tremblant Estate Homeowners Association (Gauteng Division, Johannesburg, June 2026), an HOA restricted an owner in arrears from using its estate app to generate visitor access codes. The court refused the owner’s urgent spoliation application because his own biometric access to the estate was unaffected, and the estate’s rules arguably permitted the restriction. The court pointed out that the owner could use the estate’s internal procedures, approach CSOS, or simply pay his arrears.
The lesson: any restriction must be clearly authorised by the scheme’s rules, applied fairly and must never cut off an owner’s access to their home or essential services. Speak to an attorney before restricting any service.
Enforcing a judgment, and what happens on transfer
Execution against movables first. Once a scheme has judgment, the sheriff can attach and sell the owner’s movable assets under a warrant of execution.
Selling the unit is a last resort. Where the property is the owner’s home, the court must oversee any sale in execution. Uniform Rule 46A (High Court) and Rule 43A (Magistrates’ Court) require the court to consider all the circumstances, including alternative ways of settling the debt, and may set a reserve price. In Lombardy Home Owners Association NPC v Makgolela [2026] ZAGPJHC 502, the court held that an execution order against a debtor’s primary residence should be granted only once all other avenues to settle the arrears have been meaningfully exhausted, and declined to grant it on the facts. Schemes that want to execute must show they have tried everything else first. For a closer look at how this works, read our guide to sale in execution and Rule 46A in South Africa.
Levy clearance on transfer. A sectional title unit can’t be transferred until the body corporate certifies that all amounts due have been paid or secured (section 15B(3) of the Sectional Titles Act 95 of 1986). Most HOA MOIs have a similar clearance requirement. When an owner in arrears sells, the arrears are usually settled from the purchase price on registration.
How Bam Attorneys can help
Bam Attorneys handles high-volume levy collection for body corporates, HOAs and managing agents. We run the whole process, from the first letter of demand through CSOS or court proceedings to judgment and enforcement, with regular reporting so trustees always know where each account stands.
Is an owner behind on levies? Contact Bam Attorneys today to discuss your scheme’s arrears and the fastest route to recovery.
This article is general information and not legal advice. Every scheme’s rules and every matter’s facts differ, so please speak to an attorney about your specific situation.
Frequently asked questions
Can a body corporate charge interest on unpaid levies?
Yes. Trustees may charge interest on arrear levies at a rate they determine, within the limit set by the management rules. HOAs follow their MOI.
How long does a body corporate have to claim arrear levies?
Three years from the date each levy fell due, unless prescription is interrupted by an acknowledgement of debt, a payment or legal proceedings.
Do we have to go to CSOS before going to court?
Not necessarily. CSOS is an alternative, low-cost route. Many schemes issue summons in court for undisputed arrears because a court judgment can be enforced directly.
Can an owner refuse to pay levies because they’re unhappy with the trustees?
No. An owner must pay levies even while disputing a decision, and must challenge that decision through the proper channels.
Can the scheme sell an owner’s unit to recover arrear levies?
Only with a court order, and only as a last resort once other ways of recovering the debt have failed.
