In a recent statement, Marina Constas, director of BBM Law, emphasized that courts are unsympathetic towards sectional title property owners who accumulate substantial arrear levies and electricity charges. In the face of challenging financial times, body corporates are struggling to bear the burden of these mounting debts resulting from non-payment of levies.
Constas points out that it is legally possible to disconnect the electricity of a levy payment defaulter through a High Court order. She cites cases where significant sums were owed to the Body Corporate, including one instance where the owner owed over R100,000. In these cases, orders were granted even for smaller amounts owed.
Failure to recover payments compels the body corporate to advance funds to the Council on behalf of section owners who do not pay for electricity consumption. This situation is untenable, and trustees have a fiduciary duty to ensure the collection of arrear charges.
Constas clarifies that although trustees in apartment buildings and complexes may not have the legal right to terminate or reduce electricity services based solely on arrear levies, they can obtain a High Court order to disconnect the power if substantial arrear levies, including electricity payments, have accumulated.
She cites a recent case in Killarney, Gauteng, where an owner challenged a High Court disconnection order due to arrear levies and electricity charges exceeding R300,000. The owner’s challenge was unsuccessful, and a costs order was obtained against them.
Constas recommends that body corporates pursue court action when arrear levies and electricity charges exceed R20,000. She believes that obtaining a court order to disconnect the electricity is the most effective way to recover the owed amount from defaulting owners. Once the High Court issues the order, the Sheriff will proceed to disconnect the power to the unit. It is important to note that the disconnection applications do not apply to schemes with pre-paid meters.
BBM Law is currently charging a fixed fee to bodies corporate for a High Court application to disconnect a unit’s electricity. This cost can be added to the owner’s levy account once it has been taxed and recovered by the body corporate. If the owner still fails to pay, the trustees can proceed with a warrant of execution, eventually leading to an application to attach and sell the unit.
“The message from the courts is clear,” Constas says.
“Trustees and managing agents do have the power to disconnect the electricity with a High Court order when a sectional title owner consistently fails to pay arrear levies – including electricity charges. I urge bodies corporate to not shy away from court action, which is increasingly proving the best way to hold defaulting owners to account.”
