Levies & HOA Clearances

Every owner of a flat, apartment, townhouse or any other sectional title unit belongs — automatically and from day one — to the body corporate of the scheme. That membership comes with a monthly obligation: the levy.

A body corporate is the collective entity made up of all unit owners in a sectional title scheme, and it exists to manage everything that belongs to everyone: the parking areas, gardens, swimming pools, roof, lifts, external walls, and all other common areas. Maintaining, insuring, and administering all of that costs money — and that money comes from the levies each owner pays monthly.

Think of a levy clearance certificate as the body corporate's official green light. Without it, the deeds office will not register the transfer of a sectional title unit — full stop.

When a unit is sold, the conveyancing attorney must prove to the Registrar of Deeds that the seller has not left any outstanding levy obligations hanging. This proof takes the form of a levy certificate (sometimes called a clearance certificate) issued by either the managing agent of the body corporate or, where no managing agent exists, by the body corporate itself.

The certificate confirms that, as at the date of registration, all amounts owing by the seller to the body corporate have been fully paid — or that satisfactory arrangements for payment have been put in place. The conveyancer then incorporates this confirmation into the Section 15B(3)(a) conveyancer's certificate, which is lodged with the deed of transfer at the deeds office as a required supporting document.

Many residential estates — particularly security complexes and cluster developments — are governed by a Home Owners' Association (HOA) in addition to, or instead of, a body corporate. If your property falls within such an estate, there is an HOA levy to consider at transfer time too.

The title deed of a property within an HOA-governed estate typically contains a condition that does two things: it compels the owner to maintain membership of the HOA, and it prohibits transfer of the property without a clearance certificate from the HOA being lodged at the deeds office. This condition runs with the land — it binds every successive owner automatically.

Practically speaking, conveyancers apply to the HOA for clearance figures at the same time they apply to the municipality and the body corporate. The HOA issues its clearance certificate once the seller's account is settled, and it forms part of the documentation package lodged in the deeds office.

If the seller has fallen behind on levy payments, those arrears do not simply disappear at transfer. They must be settled before the managing agent will issue a levy clearance certificate.

In practice, the seller's outstanding levy balance — together with any interest charged by the body corporate on late payments — will be deducted from the seller's proceeds on the date of registration. The conveyancer collects the full amount due, pays the managing agent, and obtains the levy clearance certificate as part of the registration process.

The bottom line for sellers: do not wait until you receive your transfer instructions to address a levy backlog. The longer arrears remain outstanding, the more interest accrues, and the more it erodes your net proceeds. If in doubt, contact your managing agent or conveyancer early.

A special levy is not part of the ordinary monthly levy cycle. It is an additional, once-off (or phased) contribution that the trustees impose by resolution when an unexpected or major expense arises that the reserve fund cannot fully absorb.

Common triggers for special levies include emergency structural repairs, replacement of major equipment (lifts, fire suppression systems), significant legal costs, or unforeseen insurance shortfalls. The Sectional Titles Schemes Management Act (STSMA) defines a special contribution as any levy raised outside the normal annual budget approved at the annual general meeting.

The practical implication at transfer is straightforward: the managing agent's levy certificate will include any outstanding special levy amounts owed by the seller. These must be settled before the certificate is issued. Any remaining instalments that fall due after registration become the buyer's responsibility — not the seller's.

Since 7 October 2016, every community scheme in South Africa — including sectional title schemes, HOA-governed estates, share block companies, and housing schemes for retired persons — must pay an annual levy to the Community Schemes Ombud Service (CSOS).

The CSOS was established by the Community Schemes Ombud Service Act to provide a dedicated dispute-resolution mechanism for community schemes. Before the CSOS existed, the only route for resolving levy disputes, rule breaches, and management failures was arbitration — slow, expensive, and inaccessible to most scheme participants. The CSOS changed all of that by offering a more accessible, structured process.

Retirement villages occupy a unique space in South African property law — they are simultaneously subject to the specific protections of the Housing Development Schemes for Retired Persons Act, and they also fall within the broader CSOS framework as a form of community scheme.

Most retirement estate transactions involve a life-right arrangement rather than full ownership of a unit. However, where a retired person does hold a registrable property right in a retirement estate, the clearance requirements are broadly similar to those for any other community scheme: all amounts owing to the scheme management structure must be settled before transfer, and the appropriate clearance certificates must be lodged with the deed documents.

Pro rata levies are one of those transfer-cost line items that confuse many buyers and sellers — yet the logic, once explained, is completely straightforward.

The seller of a sectional title unit is required to pay levies in advance. The managing agent tells the conveyancer not just the current balance owing, but also for which future period the levies must be paid up front before the levy clearance certificate will be issued. This period is determined by the managing agent and varies from scheme to scheme.

To put it in practical terms: the seller pays levies right through to the end of the period covered by the levy clearance certificate. Once the property is registered in the buyer's name — say, on the 10th of the month — the buyer becomes the owner and therefore the person responsible for levies from that point forward. Since the seller already paid for the remainder of the month (and possibly beyond), the buyer effectively reimburses the seller for that overlap period.

Common Questions About Pro Rata Levies