First-time sectional title buyer? This is the one thing you need to understand before you sign.

It happens at almost every sectional title sale. The buyer receives their first levy statement, sees the monthly amount, and asks: "What exactly am I paying for?"

It's a fair question — and one that doesn't get answered nearly often enough. Many South Africans buy into sectional title schemes without a clear understanding of what levies are, why they're calculated the way they are, or what the consequences of not paying them look like.

Here's the plain-language explanation every buyer deserves before they sign an offer to purchase.

What Is a Sectional Title Scheme?

To understand levies, you first need to understand the structure you're buying into.

When you purchase a sectional title unit — whether it's a flat, townhouse, or apartment — you own your unit exclusively. But the land, the building structure, the roof, the gardens, the pool, the driveways, the security systems, and all other shared infrastructure are common property. You don't own the common property by yourself. You own an undivided share of it jointly with every other unit owner in the scheme.

That shared ownership comes with a shared financial responsibility: everyone must contribute to maintaining what everyone shares.

That contribution is your levy.

What Do Levies Actually Cover?

Levies fund the running and maintenance of the common property. Depending on the scheme, this typically includes:

  • Garden and landscaping maintenance
  • Security (guards, access control, CCTV)
  • Common area electricity and water
  • Swimming pool maintenance
  • Building insurance premiums
  • Managing agent fees
  • General repairs and maintenance
  • Contributions to the maintenance reserve fund

Some schemes also include additional charges for specific services — like fibre infrastructure, prepaid water systems, or special facilities. These will be reflected in your levy statement.

What Is a Participation Quota (PQ)?

Not every owner pays the same levy amount. Your contribution is calculated according to your Participation Quota, or PQ.

Your PQ is essentially a fraction that represents your unit's floor area relative to the total floor area of all units in the scheme. A larger unit has a higher PQ and therefore pays a higher levy. A smaller unit pays less.

The body corporate calculates the total budget needed to run and maintain the scheme for the year. That total is then divided among all owners according to their PQ. This is how your monthly levy figure is arrived at.

Who Decides How Much the Levy Is?

The trustees of the body corporate, together with the managing agent, prepare an annual budget. That budget is presented to owners at the Annual General Meeting (AGM) and must be approved. Once approved, the levy amounts are set for the year.

If unexpected costs arise — a major roof repair, a lift replacement, a large municipal arrears account — the trustees may raise a special levy to cover the shortfall. Special levies are also calculated by PQ and are payable in addition to the monthly levy.

This is why the financial health of the body corporate matters so much when you buy. A scheme with a well-funded maintenance reserve fund is far less likely to hit owners with large special levies.

What Happens If You Don't Pay?

Levy obligations are not optional. They are a legal requirement under the Sectional Titles Schemes Management Act, and the body corporate has significant legal tools to recover unpaid levies.

The process typically works as follows:

  • Arrears are reflected on your levy account and attract interest
  • The body corporate's attorneys issue a letter of demand
  • If payment is not made, summons is issued and a judgment can be obtained against you
  • Once judgment is obtained, the body corporate can proceed to have your unit attached and sold in execution to recover the debt

This is not a theoretical outcome. Companies like Stratafin purchase outstanding levy debt from body corporates and pursue recovery through the courts — including sale in execution of the unit. 

What If Other Owners Don't Pay?

This is the aspect of levies that most buyers don't consider until it affects them.

When owners in a scheme stop paying levies, the income the body corporate relies on to maintain common property and pay its obligations drops. But the expenses don't. The rates account still needs to be paid. The security company still invoices monthly. The garden service doesn't stop.

The shortfall either results in deferred maintenance — things not getting fixed — or it gets recovered through increased levies or special levies on the owners who are paying.

South Africa's levy non-payment rate has risen from around 5% in 2014 to between 25 and 30% today. In practical terms, this means the average scheme is relying on 75% of its owners to fund 100% of its obligations.

This is why, before you buy into any scheme, you should ask for the latest debtors report. If a significant portion of the levy book is in arrears, you are buying into a scheme that is already under financial pressure — and that pressure will eventually reach you.

The Bottom Line

Levies are not an optional extra. They are the financial engine of your scheme — and the quality of life in your complex, the state of the building, and the value of your investment are all directly connected to how well they're collected and managed.

Understanding what you're paying, why you're paying it, and what a healthy levy structure looks like is one of the most important things a sectional title buyer can do.