Property glossary
Levy
Also known as: scheme levy, monthly levy
The recurring contribution each owner in a community scheme pays to fund the scheme's running costs and reserves.
Definition
A levy is the charge a body corporate or homeowners' association raises against each owner to cover the cost of running, maintaining and insuring the common property. Levies fund day-to-day operating expenses through the administrative fund and longer-term repairs through the reserve fund. The amount each owner pays is normally based on the unit's participation quota applied to the budget approved at the AGM.
In the South African context
Under the Sectional Titles Schemes Management Act 8 of 2011 (STSMA), the body corporate must raise levies sufficient to meet its estimated expenditure, and ordinarily in proportion to each owner's participation quota unless the rules provide otherwise. The trustees determine and raise the levies once the budget is approved at the AGM. In HOAs the levy basis is set by the association's constitution or rules rather than the STSMA.
Example
On a scheme with a R600 000 annual operating budget split across 25 equal-quota units, each owner pays roughly R2 000 per month in levies.
Why it matters
Levies are the lifeblood of a scheme — without timely collection the body corporate cannot pay insurance, utilities, security or maintenance, and arrears quickly threaten the scheme's solvency.
Informational only — not legal advice. Confirm specifics against the current Act and your scheme’s rules.
Sources
- STSMA — Sectional Titles Schemes Management Act 8 of 2011 — body corporate must raise levies to meet estimated expenditure, ordinarily in proportion to participation quota