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Confusion over levy responsibilities when Sectional Title units are sold should soon be a thing of the past.
Sectional title expert Mike Spencer of Platinum Global notes that the most important of the amendments to the Sectional Titles Act that are currently under discussion is one that would correct the current situation in which levies are legally actually annual amounts, payable in monthly instalments.
This means that when a unit is sold, the seller has to pay the remainder of the annual levy in advance in order to obtain the levy clearance certificate required for transfer.
"The proposed amendment however confirms that the new owner will be liable for the pro-rata levy from the date of transfer - in other words that the new owner pays the normal monthly levy from the date of transfer - and that the Body Corporate asked for a levy certificate will only be able to claim arrear levies from the seller."
Meanwhile, a second proposed amendment to Clause 2A confirms that any special levy will remain the responsibility of the person who owned the unit at the time that the special levy was approved.
"This means that if a Body Corporate agrees to a special levy for such items as painting or lift repairs, then the seller will have to pay the balance of the special levy that is outstanding at the time of transfer - even if it was originally agreed that the special levy could be paid in instalments over a period of time that extends after the date of transfer."
Other proposed changes to the Act include one that would allow for the registration of mortgage bonds over exclusive use areas (gardens, carports etc) and another that would amend the way in which the Body Corporate is allowed to acquire land for extending the common property.
* For more information on the above, please call Mike Spencer on (051) 447-4711
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