Can the Trustees instruct the Managing Agent to withhold the levy clearance certificate due to illegal alterations made to a section?
Short answer – No
The Sectional Title legislation states the following:
Quote from the Sectional Titles Act
Section 34 (4) The registrar shall not register the transfer of a transaction referred to in subsection (3) unless-
(a)there is produced to the registrar a clearance certificate of the local authority that-
(i)all rates and moneys due to that local authority in respect of the land concerned have been paid up to and including the day of transfer; or
(ii)in those cases where a law provides for the separate levying of rates in respect of a unit, all such rates due to that local authority in respect of the unit concerned have been paid up to and including the day of transfer; and
(b)there is produced to the registrar a certificate by a conveyancer confirming that, if a body corporate is deemed to have been established in terms of section 2(1) of the Sectional Title Schemes Management Act, Act 8 of 2011, that body corporate has certified that all moneys due to the body corporate by the transferor in respect of the units concerned have been paid or provision for the payment thereof has been made to the satisfaction of the body corporate.
(Sub-s (b) amended by Section 19 of the Sectional Title Schemes Management Act, Act 8 of 2011)
(Sub-s. (4) substituted by s.18 of Act No. 63 of 1991 and by s. 7 of Act No. 7 of 1992)
There are no portions in the ST Act or STSM Act that state that levy clearance can be withheld for any reason other than the above.
Should there be illegal alterations to a section the Body Corporate will have to try and inform the Estate Agent or the potential buyer if they have knowledge of who this person is, but it is the obligation of the seller to notify the buyer of this. Should transfer go through the Body Corporate will have to take action against the buyer as the current registered owner. The buyer may have a case against the seller if they were not informed of action being taken. Another reason why it is important to do your homework before buying a section in a Sectional Title scheme.