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1900

What should your monthly levies cost you

What should your monthly levies cost you

Author: Pranil Maharaj
Date: 2017-11-09

In some sectional title schemes, trustees might think keeping the levies as low as possible would be beneficial to the owners, but this is sometimes incorrect.

Levies might be so low that the residents have to be called on repeatedly to pay special levies, or much-needed maintenance might be neglected.

Prospective buyers should, when viewing sectional title properties, assess the levy structure in relation to the amenities provided, and then consider what these amenities might cost them each month if they owned a freestanding home.

If, for example, there is a swimming pool and clubhouse with a community garden and entertainment area, or excellent security, this will add to the monthly levy payments each month, but these amenities also contribute to the owner's enjoyment of living in that scheme.

If the trustees manage the scheme well, the scheme will have sufficient cash flow to meet its month-to-month running expenses and will have planned for the coming five to ten years' maintenance on the building.

If the owners' levy payments are set too low, this could lead to the trustees running the scheme in a "survival" mode where just the necessary bills are paid each month and repairs or maintenance, such as painting or waterproofing, for example, are not attended to.

This is particularly important in older schemes where more maintenance will probably be necessary and where high-budget items such as roof or lift replacements might become necessary.

It's best to check first so that there isn't time wasted on a scheme that may only look good on the surface.