One of the most frustrating situations for a body corporate is watching an owner accumulate significant levy arrears while continuing to receive rental income from their tenant every month. Fortunately, South African law provides a practical remedy in appropriate circumstances: a rental attachment order.
What is a rental attachment order?
A rental attachment order is a court order directing that rental income payable by a tenant be paid directly to the body corporate instead of the owner. The attached rental is then applied towards settling the owner's outstanding levy account. The tenant does not pay any additional money but simply pays the rent to the body corporate as directed by the court.
What law allows this?
The power arises from section 39(1)(e) of the Sectional Titles Schemes Management Act 8 of 2011 (STSMA), which allows a body corporate to recover arrear levies and other amounts owing by applying for an order attaching rent payable by a tenant or occupier of the owner's section.
When can a body corporate apply?
Generally where the owner has fallen into levy arrears, reasonable attempts to recover the debt have failed, the property is occupied by a paying tenant and rental income is available. The court retains a discretion based on the facts of each case.
Why is it effective?
Rental attachment orders improve cash flow for the body corporate, encourage owners to resolve arrears more quickly and reduce lengthy debt collection where rental income is readily available.
What about the tenant?
The tenant does not become responsible for the owner's debt. By complying with the court order and paying the body corporate, the tenant fulfils their rental obligation for that period.
Is this the first step?
Usually not. Bodies corporate generally issues statements, letters of demand, attempt payment arrangements and institute legal proceedings before applying for a rental attachment order.
How VDM Attorneys can assist
VDM Attorneys advises trustees and managing agents on levy recovery strategies, including obtaining rental attachment orders where appropriate. Our Community Schemes team assists from the initial demand through to court proceedings and enforcement.
Disclaimer
This article provides general legal information and should not be regarded as legal advice. Every matter depends on its own facts, and professional legal advice should be obtained before commencing recovery proceedings.