Outcry over exorbitant body corporate fees
BY HERTTA-MARIA AMUTENJA AND HILARY MARE
THE contentious issue of exorbitant body corporate fees in which some defaulting owners have seen their properties being auctioned off to recover the fees, has engulfed discontent in the real estate industry where homeowners have alleged abuse.
Body corporate fees are the levies that a body corporate is entitled to charge to each individual owner of a sectional title unit in a complex.
An apartment owner who spoke to Confidente on condition of anonymity this week said she was concerned at the rate at which properties are being auctioned off over body corporate fees after many people fall behind their payment owing to the implications induced by Covid-19.
She highlighted that in her complex, she had been forced to pay body corporate fees of up to N$3 000 with a threat to lose her property if she failed to pay these monthly fees on top of her mortgage with a commercial bank.
Confidente this week was also privy to another body corporate fees account in which interest (N$16 000) was 50 percent of the levies (N$29 000) while at the same time the homeowner was being charged for proceeding to recover the funds at a cost of close to N$10 000.
Member and manager with local managing agent Pro Distribution Consultants that manages the complex in which the homeowner resides, Almarie van der Merwe, elucidated that usually defaulters that failed to pay body corporate fees are given a letter of demand before taking the matter to court.
“When it comes to default accounts, usually we start with a letter of demand to the specific homeowner. We then get instructions from trustees to start the legal process, where we start with a default letter asking the owner to contact us or make arrangements. If they do make the arrangements, we tell the trustees what was communicated.
“The trustees then decide whether they want to accept what was proposed by the defaulter or not. In most cases they accept arrangements made by the defaulters unless the defaulter does not honour their commitment which leads to some homes being attached and auctioned off,” explained Van der Merwe.
She further explained that attachments are done on instructions from trustees’ lawyers to managing agents.
On the excessive fees -although Van der Merwe claims that PDC is not the most expensive managing agent- they first engage the body corporate with a quotation on their fees structures based on expenses and quality of service they provide, however the body corporate has an option to oppose the quotation.
“By the way we are not the most expensive managing agent in town; there are others that are more expensive because the budget structure of the body corporate works that if there are 10 owners, those 10 owners need to pay towards the expenses of the body corporate. Expenses such as City of Windhoek, insurance, maintenance and so much more,” she said.
Furthermore she added, estate agents and lawyers are to be blamed in most of these cases as they should be communicating to their clients, especially first time homeowners when buying homes in complexes that there is a levy that has to be paid to the body corporate.
According to Dr Weder, Kauta & Hoveka Incorporated ( WHK) law firm if one purchases immovable property which is a sectional title unit, that property will form part of a body corporate, and various responsibilities arise from that such as body corporate fees and owners could be sued for these levies.
“The owners of the body corporate must, in terms of section 39(1) (a) of the Sectional Titles Act 2 of 2009 as amended, establish a fund for purposes of, but not limited to the maintenance of these premises, payment of rates and taxes, other local authority charges, premiums of insurance and various other costs that need to be shared by the owners who share common expenses in respect of the premises.
“If you purchase immovable property which is a sectional title unit, that property will form part of a body corporate, and various responsibilities arise from that consequential membership. In terms of the regulating statute, these levies may be recovered by the body corporate by action in any court and the body corporate may recoup its legal expenses, collection commission, expenses, and charges incurred in relation to the recovery of arrear levies”