Do you know how to calculate your levy?

Calculation of levies:

The majority of new owners who buy into Sectional / Full Title Schemes are not informed by the Sales agent what a levy is or how it is calculated.

We at Fitzanne Estates receive numerous queries regarding the above, Let us enlighten you!

Firstly, Levies are being calculated by the participation quota of each unit and used mostly for the repair, upkeep, control, management and administration of the common property.

The Sectional Title Act 95 of 1986 stipulates in Section 37 (1) (d):

“37. Functions of bodies corporate –

 (1). A Body Corporate referred to in section 36 shall perform the functions entrusted to it by or under this Act or the rules, and such functions shall include;

a) to establish for administrative expenses a fund sufficient in the opinion of the Body Corporate for the repair, upkeep, control, management and administration of the common property (including reasonable provision for future maintenance and repairs), for the payment of rates and taxes and other local authority charges for the supply of electric current, gas, water, fuel and sanitary and other services to the building or buildings and land, and any premiums of insurance, and for the discharge of any duty or fulfilment of any other obligation of the Body Corporate;

b)…

c)…

d) to raise the amounts so determined by levying contributions on the owners in proportion to the quotas of their respective sections;”

Definition of participation quota:

 As per The Sectional Titles Act 95 of 1986 –

 “participation quota’, in relation to a section or the owner of a section, means the percentage determined in accordance with the provisions of section 32 (1) or (2)* in respect of that section for the purposes referred to in section 32 (3)**, and shown on a sectional plan in accordance with the provisions of section 5 (3) (g)***;”-

* Were Section 32 (1) or (2) stipulates –

 “32. Participation quotas

 (1). Subject to the provisions of section 48, in the case of a scheme for residential purposes only as defined in any applicable operative town planning scheme, statutory plan or conditions subject to which a development was approved in terms of any law, the participation quota of a section shall be a percentage expressed to four decimal places, and arrived at by dividing the floor area, correct to the nearest square metre, of the section by the floor area, correct to the nearest square metre, of all the sections in the building or buildings comprised in the scheme.

(2). Subject to the provisions of section 48, in the case of a scheme other than a scheme referred to in subsection (1), the participation quota of a section shall be a percentage expressed to four decimal places, as determined by the developer: Provided that

a)    where a scheme is partly residential as defined in any applicable operative town planning scheme, statutory plan or conditions subject to which a development was approved in terms of any law, the total of the quotas allocated by the developer to the residential sections shall be divided among them in proportion to a calculation of their quotas made in terms of subsection(1);

b)    where a developer alienates a unit in such a scheme before the sectional title register is opened, the total of the quotas allocated to the respective sections and the participation quota of that unit must be disclosed in the deed of alienation; and

c)    where such disclosure is not made, the deed of alienation shall be voidable at the option of the purchaser and that the provisions of section 25 (15) (b) shall mutatis mutandis apply in respect of any such alienation.”

** Were Section 32 (3) stipulates –

 “(3). Subject to the provisions of subsection (4) of this section, the quota of a section shall determine

a)    the value of the vote of the owner of the section, in any case where the vote is to be reckoned in value;

b)    the undivided share in the common property of the owner of the section; and subject to the provisions of section 37 (1) (b), the proportion in which the owner of the section shall make contributions for the purposes of section 37 (1) (a), or may in terms of section 47 (1) be held liable for the payment of a judgment debt of the Body Corporate of which he is a member.”

*** Were Section 5 (3) (g) stipulates –

 “5. Manner of preparing draft sectional plans

 (3). A draft sectional plan shall –

 a) …

b) …

c) …

d) …

e) …

f)  …

g) have endorsed upon or annexed to it a schedule specifying the quota of each section in

    accordance with section 32 (1) or (2) and the total of the quotas of all sections shown

    thereon;”

Formula for calculating levies:

Calculating a PQ (participation quota) –

Total square meters of Scheme ÷ Total square meters of your unit = PQ

Calculating a levy –

1. Total budgeted amount x PQ of your unit = Answer
2. (Answer ÷ total PQ of Scheme) ÷ 12 = Monthly Levy