INTRODUCTION

The question that arises in this case is whether a body corporate may withhold a levy clearance certificate where all monies due to it have been paid but the owner of the unit wishing to sell has allegedly transgressed the rules of the scheme or allegedly failed to comply with any law relating to the common property or to any improvement of land comprised in the common property.

THE FACTS OF THE ABOVE CASE

The applicant is the owner of a Unit in a Sectional Title Scheme. The first respondent is the body corporate of the said Sectional Title Scheme. The second respondent is the managing agent of the first respondent.

The applicant sold his property in July 2022 and he had paid all levies due to the body corporate in respect of the said unit. The first and second respondents, however, refused to issue a levy clearance certificate on the basis that the applicant failed to submit approved as-built building plans, pursuant to building alterations that were done to the unit.

THE LAW

The court referred to Section 15B(3)(a)(a)(aa) of the Sectional Titles Act 95 of 1986 (“STA”) which provides as follows: ‘The registrar of deeds shall not register a transfer of a unit or an undivided share therein unless there is produced to him – (a) a conveyancer’s certificate confirming that as at date of registration – (I)(aa) if a Body Corporate is deemed to be established in terms of section 36(1), that Body Corporate has certified that all moneys due to the Body Corporate by the transferor in terms of section 36(1), that Body Corporate has certified that all moneys due to the Body Corporate by the transferor in respect of the said unit have been paid, or that provision has been made to the satisfaction of the Body Corporate for the payment thereof’.

WHAT THE COURT HELD

The court referred to Willow Waters Homeowners Association (Pty) Ltd v Koka N.O. and Others 2015 (5) SA 304 and concluded the purpose of Section 15B(3)(a)(in)(aa) to be the assurance of the economic viability and sustainability of bodies corporate. The ordinary meaning of the words in the context that they are used indicates that the sole purpose of a levy clearance certificate is to ensure that the monies due to a body corporate are paid before the property is transferred to a new owner, or that provision has been made to the satisfaction of the body corporate for the payment thereof’.

To use the levy clearance certificate as leverage to enforce compliance with rules or any applicable law, would be to unilaterally extend the purpose for which S 15B(3)(a)(i)(aa) was promulgated by the legislature.

The judge held in this case that, if the legislature intended the clearance certificate to be used as a mechanism to ensure compliance with all the rules of a sectional titles scheme, or any applicable law, it would not have limited the scope of the clearance certificate to ‘all monies due’ to a body corporate. The legislature would have required a clearance certificate from the body corporate confirming that the rules of the scheme and every applicable law has been adhered to.

CONCLUSION

In this context it is found that a body corporate is obliged to issue a levy clearance certificate, for purposes of a transfer, if all the monies due to it has been paid. Furthermore, a body corporate cannot, if it is convinced that a specific rule or law was contravened, sit back and wait for the day that the non-compliant unit owner wants to sell the unit, and then use the levy clearance certificate as a mechanism to compel compliance. It must demand that any transgression of the rules or applicable law, be remedied as soon as it occurs.