What happens with levies when I sell my unit? What is the buyer responsible for and what is the seller responsible for? And surely levies don’t work the same as special levies?
The STSM Act is clear on the calculation of levies when a unit is transferred from one owner to another.
- Liability for contributions levied under any provision of subsection (1), save for special contributions contemplated by subsection (4), accrues from the passing of a resolution to that effect by the trustees of the body corporate, and may be recovered by the body corporate by an application to an ombud from the persons who were owners of units at the time when such resolution was passed: Provided that upon the change of ownership of a unit, the successor in title becomes liable for the pro rata payment of such contributions from the date of change of such ownership.
So the date of transfer is the deciding factor – up to that date the seller is liable for levies and from that date the buyer becomes liable. Therefore, that month’s levies are split pro rata between the buyer and the seller.
When we look at special levies we also look at Section 3 of the STSM Act
Section 3
- Any special contribution becomes due on the passing of a resolution in this regard by the trustees of the body corporate levying such contribution and may be recovered by the body corporate by an application to an ombud, from the persons who were owners of units at the time when such resolution was passed: Provided that upon the change of ownership of a unit, the successor in title becomes liable for the pro rata payment of such contributions from the date of change of such ownership.
So guess what – levies and special levies work the same when selling a unit.
Before 7 Oct 2016 and the new STSM Act special levies were payable by the person who was the registered owner on the date of the Trustee resolution to raise special levies.
Some history of how the Act was amended on this:
History:
The original Act stated that levies shall be due and payable on the passing of a resolution to that effect by the Trustees and may be recovered from the persons who were owners of units at the time when such contributions became due. In 2003 there was an amendment to the Act to say that it is recoverable from persons who were owners when that resolution was passed. This meant that owners were liable for the levies for the entire financial year and not just up to registration of the unit into someone else’s name. The clever attorneys then drafted tri-partite agreements to be signed by the seller the buyer and the Body Corporate – this stated that the buyer will take over the levy liability from the date of transfer. In 2010 the confusion was cleared up and the Act since then stated that on change of ownership the new owner will become liable for the levies – prorata from the date of registration of the unit is his name and therefor there is no need to sign a tri-partite agreement any more.