A Legal Guide For Bodies Corporate and Landlords

Levy and rental arrears are a common scenario faced across South Africa, placing financial pressure on both bodies corporate and landlords. With constantly rising living costs, interest rates, and economic strain, more property owners and tenants are falling behind on their payment obligations.

If not managed properly, arrears can escalate quickly, affecting cash flow, increasing legal risk, and creating long-term financial instability for housing schemes. This guide provides input on the legal position, best practices, and recovery options available to bodies corporate and landlords in South Africa.

What Are Levy and Rental Arrears?

Levy arrears occur when an owner in a sectional title scheme fails to pay monthly levies to the body corporate. These levies are essential for:

• Maintenance and repairs
• Insurance
• Utilities and services
• Managing agent costs

Rental arrears, on the other hand, arise when a tenant fails to pay rent in accordance with a lease agreement.

While governed by different laws, both types of arrears create similar challenges:

• Cash flow disruptions
• Administrative burdens
• Increased legal exposure

Why Arrears Are a Serious Financial Risk

Arrears affect more than just the defaulting party.

For bodies corporate:

• Other owners effectively subsidise the defaulters
• Maintenance and service delivery may suffer
• Financial sustainability of the scheme is compromised

For landlords:

• Rental income is reduced or lost
• Bond repayments may be impacted
• Property upkeep becomes more difficult

The longer arrears remain unresolved, the harder they become to recover.

Legal Framework for Levy Arrears in South Africa

Levy arrears are governed primarily by the Sectional Titles Schemes Management Act (STSMA) and each housing scheme’s conduct rules.

Key legal principles:

• Levies are mandatory and enforceable
• Payment is required regardless of occupation or financial hardship
• Interest may be charged on arrears
• Legal costs can be recovered (if rules allow)
• Bodies corporate may take legal action to recover unpaid levies

Levy obligations are not optional - they are statutory.

Legal Position on Rental Arrears

Rental arrears are governed by:

• The lease agreement
• Common law
• The Rental Housing Act

Landlords are entitled to:

• Demand payment of arrears
• Cancel the lease for breach
• Institute legal action
• Apply for eviction through the courts

Important:

Landlords may not:

• Change locks
• Disconnect utilities
• Remove tenants without a court order

This is considered unlawful and can expose landlords to legal claims.

How to Manage Arrears Early (Best Practices)

Early action is critical. The longer arrears are ignored, the more difficult recovery becomes.

Recommended approach:

• Act immediately - Follow up as soon as a payment is missed.

• Communicate in writing - Maintain a clear record of all correspondence.

• Apply rules consistently - Avoid selective enforcement - it weakens legal standing.

• Keep accurate records - Statements, invoices, and payment history are essential for legal recovery.

These steps often resolve arrears before legal escalation is required.

Payment Arrangements: When Are They Useful?

In some cases, allowing repayment over time is commercially practical.

A proper payment plan should:

• Be in writing
• Include clear amounts and deadlines
• Specify consequences for default

Avoid informal agreements, simply because they often fail and complicate future enforcement. Get hold of a lawyer or conveyancing attorney to assist you with the compilation of an enforceable contracts.

When Should Legal Action Be Taken?

Legal action becomes necessary when arrears persist despite reasonable attempts to resolve the issue.

Legal remedies include:

• Letters of demand
• Debt collection proceedings
• Court judgments

For landlords:

• Lease cancellation
• Eviction proceedings (via court order)

Delaying legal action often reduces recovery prospects.

Evictions in South Africa: What You Need to Know

Eviction is not immediate — it is a regulated legal process governed by the:

• Prevention of Illegal Eviction Act (PIE Act)

Key principle:

No tenant may be evicted without a court order, even if they are in arrears.

Bodies corporate generally do not evict owners, but may:

• Attach assets
• Enforce judgments
• Recover debts through legal processes

Prescription: When Arrears Become Unenforceable

Arrears are subject to prescription (time limits) under South African law.

If legal steps are not taken within a certain period:

• Older debts may become unenforceable

Regular monitoring and legal oversight are essential to avoid losing the right to recover arrears.

Why Consistency Is Critical

One of the biggest mistakes bodies corporate and landlords make is inconsistent enforcement.

This leads to:

• Disputes
• Resistance from defaulters
• Weak legal standing

A clear, consistently applied arrears policy improves recovery success and strengthens your legal position. Consistency shows intention, which often results in speedier actions to pay outstanding funds by tenants / owners.

Professional Legal Support

EW Serfontein & Associates Inc. provides legal support towards the payment of outstanding debts to bodies corporate and landlords across South Africa.

Our services include:

• Arrears management strategies
• Drafting and issuing legal demands
• Debt collection and litigation
• Eviction proceedings
• Ongoing legal advisory services

We focus on practical, compliant, and effective solutions to protect your financial position.

Frequently Asked Questions 

Can a body corporate take legal action for unpaid levies?

Yes. Levies are legally enforceable, and bodies corporate may recover arrears through court proceedings.

Can a landlord evict a tenant for non-payment?

Yes, but only through a lawful court process in terms of the PIE Act.

Can arrears be written off?

In some cases, arrears may prescribe if not pursued within legal time limits.

In Summary

Levy and rental arrears are a growing reality in South Africa’s current economic environment. However, with early intervention, consistent enforcement, and proper legal guidance, these financial risks can be effectively managed.

Taking the right steps early can protect your income, maintain compliance, and prevent long-term financial strain.

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This article is not intended to constitute any form of financial or legal advice.

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You might also be interested in reading one of our recent articles, Understanding Debt Collection In South Africa.