According to the BusinessDay, the amendment may mean that if a sectional title unit holder sells his unit at the beginning of the financial year, he could be liable for all the levies for the balance of the year before a clearance certificate is issued.
Marina Constas, who is a director of Biccari Bollo Mariano Attorneys and a fellow of the Association of Arbitrators, says there was always confusion surrounding the seller's liability for a special levy imposed by the body corporate prior to registration taking place.
She believes the matter has been taken too far by confusing the issue of payment of levies and special levies in making the seller liable for the entire financial year. She thinks this amendment was made in error and that it should apply to special levies only and not to ordinary levies. If no error has been made and government intends the seller to be liable for the balance of the levies, she says that the seller can avoid the costs by entering into a tripartite agreement with the purchaser and body corporate, whereby the purchaser would be liable as in the past.
However, Sunday Ogunronbi, director of land planning and property law in the land affairs department, disagrees with Constas, saying that section 37 (2) of the act, before and after the amendment, provides only that the person who was the owner when the resolution to pay levies was approved by the body corporate is responsible for paying those levies.
Tertius Maree, writing in Die Burger - Verwarring oor oordrag van deeltitel-eenhede - agrees with Constas in his interpretation of this section and suggests two ways to deal with it:
- The trustees ask for the outstanding balance before issuing the clearance certificate. The conveyancer then makes a pro rata division from the date of transfer between the seller and buyer, just as is done with municipal clearance certificates.
- A tripartite agreement is entered into between the buyer the seller and the body corporate in which the buyer undertakes to assume the sellers levy obligation. Note however, merely mentioning in the contract of sale that that the buyer will be responsible for the balance of the levies is not a tripartite agreement, and therefore unenforceable by the body corporate should he fail to pay.