How are levies determined? Always by PQ or are there other methods?
ELA
EstateIQ Legislative Assistant
Levies in a sectional title scheme are normally determined according to participation quotas (PQ), but the legislation allows for other methods if properly authorised.
Here's how it works under the Sectional Titles Schemes Management Act (STSMA):
1. Default Position — Based on Participation Quota (PQ)
Under Section 3(1)(f) of the STSMA, the body corporate raises contributions (levies) from owners "in proportion to the quotas of their respective sections."
This means each owner's levy is based on their unit's PQ, which reflects their relative share of the scheme's floor area.
2. Alternative Methods — By Special Rule
However, Section 11 of the STSMA permits the body corporate (by special resolution) to make a rule that changes how levy liability is allocated.
This rule may attach a different value to each owner's vote or modify the owners' liability for contributions under Section 3(1)(a).
- If the change adversely affects any owner, that owner's written consent is required.
- The rule cannot be made until at least 30% of the units are owned by persons other than the developer.
- Such a rule must be properly adopted and lodged in accordance with Section 10 of the STSMA and the Management Rules.
In Summary
Levies are ordinarily calculated by PQ (the default legal rule), but a scheme may—through a properly adopted management rule approved by special resolution—use another fair and transparent basis (e.g., equal levies per unit, usage-based allocation, or by floor area category).
Legislative References
Section 3(1)(f) of the Sectional Titles Schemes Management Act, 2011 (STSMA)
The body corporate must raise the amounts so determined by levying contributions on the owners in proportion to the quotas of their respective sections.
Section 11 of the Sectional Titles Schemes Management Act, 2011 (STSMA)
Effect of quotas and variation thereof—allows the body corporate to make rules by special resolution that modify levy liability, subject to certain conditions including owner consent for adverse effects and 30% non-developer ownership threshold.
Section 10 of the Sectional Titles Schemes Management Act, 2011 (STSMA)
Proper adoption and lodgement procedures for management rules.
Management Rules, Annexure 1
Detailed requirements for the implementation and administration of body corporate financial governance.
ELL
EstateIQ Legal Lookup
📘 Legislative References
STSMA Section 3(1)
A body corporate must perform the functions entrusted to it by or under this Act or the rules, and such functions include—
3(1)(a): to establish and maintain an administrative fund which is reasonably sufficient to cover the estimated annual operating costs
(i) for the repair, maintenance, management and administration of the common property (including reasonable provision for future maintenance and repairs);
(ii) for the payment of rates and taxes and other local municipality charges for the supply of electricity, gas, water, fuel and sanitary or other services to the building or land;
(iii) for the payment of any insurance premiums relating to the building or land; and
(iv) for the discharge of any duty or fulfilment of any other obligation of the body corporate;
3(1)(f): to raise the amounts so determined by levying contributions on the owners in proportion to the quotas of their respective sections;
STSMA Section 11: Effect of Quotas and Variation Thereof
11(1): Subject to subsection (2), the quota of a section must determine—
11(1)(a): the value of the vote of the owner of the section, in any case where the vote is to be reckoned in value;
11(1)(b): the undivided share in the common property of the owner of the section; and
11(1)(c): subject to section 3(1)(b), the proportion in which the owner of the section must make contributions for the purposes of section 3(1)(a) or may in terms of section 14(1) be held liable for the payment of a judgment debt of the body corporate of which he or she is a member.
STSMA Section 11(2): Variation of Quotas by Rule
11(2)(a): Subject to section 3(1)(b), the developer may, when submitting an application for the opening of a sectional title register in terms of the Sectional Titles Act, or the members of the body corporate may by special resolution, make rules under section 10 by which a different value is attached to the vote of the owner of any section, or the liability of the owner of any section to make contributions for the purposes of section 3(l)(h) or 14(1) is modified.
11(2)(b): Where an owner is adversely affected by such a decision of the body corporate, his or her prior written consent must be obtained.
11(2)(c): The members of the body corporate may not make rules by which a different value is attached to the vote or liability of the owner of any section as contemplated in paragraph (a) until such time as there are owners, other than the developer, of at least 30 per cent of the units in the scheme.
11(2)(d): Where the developer alienates a unit before the opening of a sectional title register in terms of the Sectional Titles Act, the developer may not make rules by which a different value is attached to the vote or liability of the owner of any section as contemplated in paragraph (a), unless the developer has disclosed such intention in all deeds of alienation.
STSMA Section 10: Management and Conduct Rules
Procedures for the proper adoption and lodgement of management rules, including rules that modify levy liability or voting rights.