Body corporate levy collection: a guide for trustees and agents

A body corporate or homeowners' association (HOA) collects levies most reliably by issuing a monthly levy notice to each owner, collecting by debit order (with EFT against a unit-specific reference as the alternative), and following the arrears steps in its rules from the first missed payment. Sectional title schemes must also comply with the Sectional Titles Schemes Management Act and its Prescribed Management Rules, which require the body corporate to collect what's owed and set out steps such as a final notice before further action.

This guide covers practical collection for trustees, directors of HOAs and managing agents.

The legal framework in brief

Under the STSMA, the body corporate must establish administrative and reserve funds and must collect levies from owners. The trustees determine levies based on the budget approved by the owners. The Community Schemes Ombud Service (CSOS) resolves community scheme disputes; its adjudication orders can be enforced as magistrate's court orders. This is a summary only; the Act, the rules of your scheme and your managing agent or attorney are the authority.

What gets billed

• Monthly levies, calculated per unit (usually by participation quota in sectional title).
• Special levies for unplanned or large expenses, billed once-off or in instalments.
• Utility recharges (water, electricity) where the scheme has bulk meters and sub-meters.
• Exclusive use area levies, where applicable.
• Interest on arrears, at the rate determined under your rules.
• Other charges permitted by the rules (for example penalties for rule breaches imposed after due process).

Collection methods

Debit orders

For levies (fixed monthly amounts from owners with South African bank accounts) debit orders reduce arrears significantly. Tips:

• Collect after month-start paydays, and allow owners to choose between a few dates if your process allows.
• Use a statement name owners recognise (the scheme's name, not the managing agent's legal entity if that confuses owners).
• If levies and recharges are collected together, ensure the mandate covers variable amounts and send the levy statement before the debit runs.

See how debit orders work and the mandate checklist.

EFT with unit reference

Give each unit a fixed reference (for example the scheme code plus unit number) and print it on every levy statement. See payment reference best practice.

Payment links

Handy for special levies, arrears and owners who want to pay by card or instant EFT.

Tenants vs owners

The owner is liable for levies, even if the unit is let. Where a tenant pays on the owner's behalf, the mandate or EFT still settles the owner's account. Make sure statements go to the owner (and optionally the rental agent), and that tenant changes don't break collections.

Arrears: a structured process

Follow your scheme's rules and the Prescribed Management Rules, and apply the process consistently to every owner, including trustees.

1. Reminder a few days after the due date, with a payment link.
2. Final notice, as required by the rules, stating the amount and the consequences.
3. Interest on overdue amounts at the rate your rules allow.
4. Payment arrangement in writing, if appropriate, approved in line with trustee resolutions.
5. Handover to attorneys, or a CSOS application where applicable.

Trustees generally can't simply write off arrears; take advice before agreeing to accept less than what's owed. Report arrears to trustees monthly and to owners at the AGM.

Utility recharges

Recharges are a frequent source of queries:

• Publish the calculation method (tariffs, sub-meter readings, common-area allocation).
• Show readings and dates on each statement.
• Bill recharges as separate lines from levies.
• Reconcile total recharges against the municipal account monthly.

Reports trustees need

• Levies billed vs collected per month.
• Arrears by unit and age (30, 60, 90+ days) (see aged receivables).
• Debit order unpaids by reason code.
• Special levy collections vs schedule.
• Reserve fund contributions.

Governance and transparency

• Keep levy records and bank accounts separate from the managing agent's own funds.
• Use role-based access so trustees can view reports without editing records.
• Keep an audit trail of changes to owner accounts and levy amounts.
• Keep records for the periods required by law (see invoice record keeping requirements).

How CentraPoint helps

CentraPoint lets managing agents and schemes bill monthly levies per unit as recurring plans, add special levies and utility recharges, and collect by Netcash debit order with online mandate signing, EFT with proof of payment, card or instant EFT. Branded levy statements and invoices go out automatically, reminders include payment links, and reports show levies, collections and arrears by unit. Multi-tenant setup lets an agent run many schemes, each with its own branding and bank details, with roles and permissions for trustees. Contact us for a walkthrough.

Frequently asked questions

Who is responsible for paying levies when a unit is rented out?

The owner remains liable for levies. A tenant may pay on the owner's behalf by arrangement, but the body corporate's claim is against the owner.

Can a body corporate charge interest on arrear levies?

Yes, where the rules allow it and at the rate determined under those rules. Apply it consistently and show it clearly on statements.

Can trustees write off levy arrears?

Bodies corporate have a duty to collect amounts owed, so writing off arrears is generally problematic. Take legal advice before accepting less than the full amount.

What can a body corporate do if an owner doesn't pay levies?

Follow the rules: reminders, a final notice, interest, a written arrangement if appropriate, and then handover to attorneys or an application to CSOS.