Trustees often wait too long before handing over an arrear levy account. The intention is kind: give the owner time, avoid legal costs, keep the peace. In practice, waiting usually makes the debt harder to recover and more expensive for everyone, including the owner.
Arrears grow faster than owners expect
Every month the account stays unpaid, a new levy instalment is added and interest runs on the balance. An owner who is three months behind can often catch up through a short payment arrangement. An owner who is twelve months behind is usually facing a balance they cannot clear without selling, and the conversation becomes far more difficult.
Early referral settles more matters
At around 90 days, most owners still have the means and the motivation to settle. A clear letter of demand, followed where necessary by an acknowledgement of debt with structured repayments, resolves the majority of these matters without summons. That keeps legal costs low and keeps the owner a paying member of the scheme.
Prescription is a real risk
Unpaid levies are ordinary debts that prescribe after three years under the Prescription Act 68 of 1969, and each monthly instalment runs separately. A scheme that lets an account drift for years can lose the oldest instalments altogether. Early referral protects the full claim.
The other owners carry the shortfall
A scheme’s expenses do not stop when one owner stops paying. Municipal accounts, insurance, security and maintenance still fall due, and the shortfall is carried by the owners who pay on time, often through higher levies or a special levy. Trustees have a duty to all owners to recover what is owed.
What a 90-day referral looks like
- The managing agent hands over the account with the ledger and the owner’s details.
- We acknowledge the instruction within one business day and review the ledger.
- A letter of demand is issued, offering a structured arrangement where appropriate.
- If the owner does not engage, the matter proceeds to summons, judgment and enforcement.
Trustees receive a monthly report on every account, so they can see exactly where each matter stands.
Setting a referral policy
The most effective schemes adopt a written arrears policy at trustee level: reminders at 30 and 60 days, and automatic handover at about 90 days. A clear policy removes the awkwardness of deciding case by case and treats every owner the same way.
This article is general information, not legal advice. Contact us about your scheme’s circumstances.