Loading...

Body corp insists levy be paid by debit order

Mar 12 2015 09:41

A Fin24 user's body corporate wants the user to pay his levy via a debit order and threaten to charge a penalty fee if he does not. He writes:

My body corporate or home owners' association wants to charge an "admin fee" (more like a penalty fee) if I do not pay my levy by debit order.

Is that allowed? The amount is not a fixed amount every month and I pay on the 1st business day after I receive the statement via electronic banking.

I don't like debit orders and only have two. As far as I'm concerned there are no administration costs for them.

I feel they are trying to control their arrears but in my experience debit orders do not turn bad payers into good payers and payment is not guaranteed because it is via a debit order.

In fact, once it is paid online there is no chance of it being unpaid. My question is, is there a law that states whether they are allowed to charge a fee for not using debit order as a payment method or not? CPA or NCA?

Charles Vining Seeff Sandton’s Managing Director responds:
 
A body corporate or home owners association is not entitled to charge an admin fee in the event of you not paying your levy by debit order, unless it is specifically provided for in the body corporate rules.

On a practical level however, if the body corporate is attempting to reduce admin costs in the body corporate office, for the general benefit of all property owners by way of insisting on debit orders, then naturally all property owners benefit from this, which would make the fee commercially justifiable.

Many body corporates or home owners associations offer a discount to owners that pay their monthly accounts by way of a debit order, but do not penalise those that do not.

ALSO READ:

Commercial property rates nightmares

Frustration at rates clearance delays

*Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

property  |  money
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Comments have been closed for this article.
 

Company Snapshot

#SAVINGSMONTH

Five of SA's top financial brains, including SARB governor Lesetja Kganyago share their best savings habits.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Are you prepared for the latest round of Eskom’s load shedding??

Previous results · Suggest a vote

Loading...