Advice and Opinion

Many SA Body corporates still unaware of resolutions that need to be passed

With just over a year since the passing of the amended Prescribed Management Rule 31, many body corporates still do not know of resolutions that need to be passed to ensure that levies are payable from the beginning of the financial year.

This is according to Carl Smit, MD of Sandak-Lewin Property Trust, who explains that the Prescribed Management Rule 31 (4A), which allowed trustees to, at their discretion, increase the levies charged by up to 10% at the beginning of the financial year, was replaced by PMR 31 (4B), which now requires that levy increases form part of the proposed annual budget and be applied for and approved at an Annual General Meeting (AGM).

The new rule also allows trustees from time to time, when necessary, to make special levies upon the owners, over and above those already provided for in the approved budget.

“Body Corporate’s, specifically the trustees, are still under the impression that they must continue to charge the same levies until the budget is approved at the AGM, not realising that they need to pass a resolution to charge the same levies or an increased levy in the form of a special levy to ensure levies are due and payable by owners. If the body corporate is being managed correctly and guided by a professional management company, then a budget for the next financial year should be discussed at least a month before the current financial year ends by the trustees and that same company should ensure that a resolution is passed so that levies can be collected.” Smit adds that all this entails is either a round robin resolution where all trustees sign the resolution by correspondence or by a meeting of the trustees where a quorum is present and the resolution is adopted – a simple matter that could save trustees and the owners from major complications down the line.