A recent High Court case, in which a body corporate failed in its attempt to sequestrate the deceased estate of a section title owner, shows once again the necessity of complying with all the requirements of sectional title legislation – what may appear at first sight to be a “technicality” could easily turn out to be a critical requirement.
Body corporates and managing agents beware
Failure to comply can have serious consequences – the Court in this case held that the body corporate had failed to prove that it had any valid claim for outstanding levies. Critically, sectional title levies only become due and payable on the passing of a resolution by the trustees determining them.
Thus, it can never be enough for the body corporate to approve levies at a general meeting (normally members approve a levy budget at the Annual General Meeting (AGM)). Nor, as pertinently illustrated in this case, does it make any difference if the owner subsequently admits liability for the levies. The bottom line – without a formal trustees’ resolution, the levies have been invalidly raised and cannot be recovered.
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