Court rules Body Corporate can sell property over R50K in unpaid levies! In a significant legal decision, the Body Corporate of Bondi in Roodepoort has won a case in the South Gauteng High Court in Johannesburg, securing permission to sell a property due to unpaid levies amounting to R50,974.31.
This ruling comes after one of the co-owners, Siboniso Caleb Sithole, challenged an initial judgment made by the Roodepoort Magistrates Court in September 2022.
Despite Sithole’s efforts to appeal the ruling, Judge Brad Wanless upheld the original decision, emphasizing that all possible alternatives to recover the outstanding debt had been exhausted before resorting to the sale of the property.
Financial Struggles and Mounting Debt
The financial difficulties surrounding the property began in October 2018 and extended through May 2019, during which the unpaid levies accumulated to over R50,000. When a summons was issued in October 2019, the property owners failed to respond, leading the court to issue a default judgment against them.
At the time of the initial ruling, the financial burden on the property owners was significant. The outstanding mortgage bond had surpassed R632,000, while the municipal debt had grown to over R77,000.
The property itself had an estimated market value of R1.4 million, but these mounting debts complicated the situation for the owners, Siboniso Caleb Sithole and Sibusiso Derrick Ndebele.
Failed Attempts to Recover Debt
Following the court judgment, the Body Corporate obtained a writ of execution against the movable property of Sithole and Ndebele in an attempt to reduce the debt owed. However, a sheriff sent to the property on multiple occasions was unable to attach any valuable movable property for sale.
At some point, the sheriff managed to contact the co-owners, and they stated that they did not possess any attachable assets that could be sold to reduce their debt. Furthermore, it was revealed in court documents that Ndebele had since vacated the property, leaving Sithole as the sole occupant.
In an effort to settle the matter, Sithole proposed a payment plan of R2,000 per month to clear the debt. However, the Body Corporate rejected this offer, arguing that it would not be sufficient to settle the arrears within a reasonable period.
Constitutional Argument Rejected
Sithole sought relief in the High Court, arguing that selling the property would infringe upon his constitutional right to adequate housing as protected under Section 26 of the Constitution. He contended that losing his home would leave him in a vulnerable position.
However, Judge Wanless dismissed this argument, stating that all possible avenues had already been explored by the Body Corporate before resorting to selling the property. The court noted that previous attempts to collect the outstanding amount, including seizing movable assets, had failed.
Additionally, the judge pointed out that Sithole failed to disclose his income or provide details of any existing financial obligations that could justify his claim that he was unable to make higher payments.
Sale of Property Deemed the Best Option
Judge Wanless emphasized that when the original judgment was granted, the Magistrate took into account the financial situation of the owners. With the market value of the property at R1.4 million and the total amount owed to creditors, there was a surplus of over R724,000.
This meant that selling the house would ultimately be in Sithole’s best interest, as it would relieve him of the obligation to pay the bond and outstanding levies.
The judge further suggested that Sithole use the proceeds from the sale to secure alternative accommodation, arguing that he would not suffer undue hardship, as he had claimed in court.
Grace Period Before Eviction
While the ruling allowed for the sale of the property, the court also granted a three-month suspension period. This gives Sithole and Ndebele an opportunity to either settle their debts or initiate a voluntary sale of the property themselves.
Judge Wanless reiterated that the sale of a primary residence should always be a last resort, but in cases where all other methods of debt recovery have failed, such action is justified.
Final Judgment
The High Court dismissed Sithole’s application, ordering him to cover the legal costs of the case. This ruling serves as a strong precedent regarding the enforcement of levy payments in residential complexes, reinforcing the principle that property owners must meet their financial obligations or face legal consequences.
As the case concludes, the decision underscores the legal rights of Body Corporates to take action against property owners who default on their payments, ensuring that communal property management remains financially sustainable.
