Not paying levies will negatively impact your sectional title scheme. Levies are not just another monthly expense; they are vital to maintaining and growing the value of your investment. We unpack how not paying your levies will negatively impact your investment.
Levies in Sectional Title Management
Levies ensure that any sectional title scheme runs smoothly. They cover essential costs such as maintenance, security, and communal amenities. Without these contributions, the financial health of the entire scheme is at risk, leading to deteriorating facilities and a decrease in property values.
Property Maintenance and Aesthetics
One of the first areas to suffer when levies aren’t paid is property maintenance. Routine repairs, garden services, and cleaning may be delayed or entirely skipped, leading to an unkempt environment. This decline in the appearance and functionality of the property can deter potential buyers or renters, negatively impacting the demand and value of all units.
Additional Costs to the Sectional Title Scheme
Failing to pay sectional title levies doesn’t just affect the appearance of the property; it also opens the door to legal issues. Under sectional title management regulations (STSMA), the body corporate has the right to take legal action against defaulting unit owners. This can lead to additional costs, such as legal fees and interest on overdue amounts, further straining the finances of the body corporate.
Devaluing the Property
As more owners default on their levies, less money is available to the body corporate for the maintenance of the property. This has an effect on the value of the property as a whole and on the way that the property is managed by the managing agents, which can lead to a loss of confidence in the management team, potentially resulting in higher levies for owners and tenants to cover the shortfall. The overall desirability of the sectional title scheme declines, and with it, the value of all the units within the scheme.
Paying levies on time is more than just following the rules—it’s a smart move to safeguard and enhance your investment in the sectional title scheme. Timely financial contributions from owners help ensure the property remains well-maintained, safe, secure, and attractive, which not only maintains property values but can also lead to appreciation over time. To learn more about the benefits of managing your sectional title investment effectively, visit FMS Property Managers today.
