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The managing agent is not the problem

It's one of the most common complaints in sectional title living: the levy goes up, the managing agent sends a statement, and the owner is left squinting at line items they don't fully understand. The assumption that quietly takes hold, especially when things feel disorganised or maintenance is slow - is that someone somewhere is skimming.

The reality is less dramatic, and considerably more expensive. Let's deal with this head-on.

A managing agent's fee is typically one line item on a levy statement, and for a scheme of average size, it represents a relatively modest portion of the total levy collected. What managing agents do - administer levies, convene AGMs, prepare financials, enforce the rules of conduct, liaise with trustees, and chase arrears, would cost the body corporate far more if trustees had to do it themselves, unpaid, without professional systems.

The frustration owners feel is usually not about the agent's fee, t's about not understanding what the rest of the money is for.

The Body Corporate is in effect, running a small business

Every sectional title scheme is a juristic person. It has financial obligations, legal responsibilities, and assets to maintain. When you pay your levy, you are contributing to the collective cost of running that entity. That includes:

Insurance:

The body corporate is legally required under the Sectional Titles Schemes Management Act (STSMA) to insure the building for its full replacement value. In the current environment - rising construction costs, increased claims, reinsurance pressures and building insurance premiums have increased substantially across the board. This is often the single largest line item in a levy budget, and it increases annually regardless of whether any claims are made.

Maintenance and repairs:

The common property belongs to all owners collectively. Gardens, lifts, parking areas, boundary walls, entrance gates, exterior painting, roof repairs, plumbing in common areas, pool maintenance, security systems - all of it comes out of the levy. Deferred maintenance does not disappear; it compounds. A body corporate that has kept levies artificially low for years often has a crumbling building to show for it.

Utilities:

Common-area electricity, water, and refuse removal are levy expenses. In many schemes, electricity to the entrance, lights in passages and parking areas, pumps for irrigation - these run continuously and the costs are real.

The reserve fund:

The STSMA requires every body corporate to maintain a reserve fund for future major maintenance and repairs. This is not optional, and it is not money being held unnecessarily - it is the fund that pays for the roof when it needs replacing, the lift when it needs an overhaul, or the pipes when they fail. A scheme with no reserve fund is a scheme where owners will face a special levy the moment something large breaks.

Administrative costs:

Audited financials, legal costs for arrear levy recovery, CSOS levies, bank charges, postage, and the cost of AGMs - these are mundane but unavoidable.

What the law says

The Sectional Titles Schemes Management Act 8 of 2011 and its accompanying Regulations set out clearly what a body corporate must do. The reserve fund contribution is prescribed. The insurance obligation is prescribed. Trustees have a fiduciary duty to act in the best interests of the scheme. An owner who genuinely suspects mismanagement has legal recourse - including through the Community Schemes Ombud Service (CSOS), which exists specifically to resolve disputes in sectional title schemes.

Suspicion is not the same as mismanagement. Before assuming the worst, request a copy of the approved budget and the most recent audited financials. Every owner is entitled to these documents.

The honest conversation no one is having

Levies in South Africa have, in many schemes, been kept too low for too long. Trustees face enormous pressure from owners to hold the line on increases, and the temptation to defer maintenance rather than raise levies is powerful. The result is buildings that age faster than they should, reserve funds that are dangerously underfunded, and owners who are shocked when a special levy lands.

A levy that covers the actual cost of running the scheme - insurance, maintenance, reserves, administration - is not a sign of mismanagement. It is a sign of a body corporate that is doing its job.

If you have questions, ask them properly

Van Deventer Dowlath & Marx Incorporated (VDM) assists body corporates, trustees, and sectional title owners in understanding their rights and obligations under the STSMA. If you are a trustee unsure whether your levy structure is legally compliant, or an owner who believes the scheme is not being managed correctly, the right move is to get proper advice - not to assume, and not to wait.

**The building you own a share of is worth protecting. That starts with understanding what your levy is actually paying for.