Levies or Contributions? Why the Word You Use Actually Matters

What Does the STSMA Actually Call Them?

The Sectional Titles Schemes Management Act (STSMA) is clear: the official term is contributions.

So to break it down simply:

• Contributions = the legally correct term used in legislation

• Levies = the old-school term everyone still uses

Both refer to the same thing: the monthly amount you pay to keep your scheme running. But when it comes to formal documents, budgets, arrears notices or anything involving CSOS, "contributions" is what the law recognises.

Where Does Your Money Actually Go?

Contributions fund everything from daily operations to big future projects. They're split into two main buckets:

Administrative Fund

This covers your scheme's everyday running costs:

• Cleaning, gardening and general upkeep

• Security services

• Electricity and water for common areas

• Managing agent fees

• Routine repairs and maintenance

Think of this as the scheme's monthly bills. Without it, the lights go off, the gardens get overgrown, and nobody's answering emails about the broken gate.

Reserve Fund

This one's legally required under the STSMA, and for good reason. It's your scheme's safety net for major expenses like:

• Roof replacements

• Structural repairs

• Building repaints

• Paving and infrastructure upgrades

The reserve fund exists so you're not blindsided by a R500,000 special levy when the roof decides it's had enough. It's forward planning in action.

Why Does the Word Choice Actually Matter?

You might be thinking: "Does it really matter if I call it a levy instead of a contribution?" In day-to-day chat? Not really. But in formal situations, yes, it does.

Using "contributions" becomes important when:

• Budgets are approved at your AGM

• The Body Corporate pursues arrears

• Disputes escalate to legal action

• CSOS applications or formal notices are issued

Sticking to the correct terminology aligns everything with the STSMA and keeps communication crisp and legally sound. It also shows you know what you're talking about, which never hurts.

What Happens When Owners Don't Pay?

Here's where things get serious. When someone doesn't pay their contributions, it's not just their problem. It affects the entire scheme's ability to:

• Maintain common property properly

• Pay service providers on time

• Meet insurance obligations (which is a legal requirement)

• Build up adequate reserves for future work

The STSMA gives Body Corporates the power to recover unpaid contributions, including interest and legal costs. Nobody wants it to get to that point, but the rules exist for a reason: one owner's arrears can cripple an entire community.

What Should You Be Doing as an Owner?

Being an informed owner isn't complicated. It just takes a bit of attention:

• Understand your contributions – Know how they're calculated and what they cover

• Review budgets at AGMs – Don't just zone out during the financials (we know it's tempting)

• Ask questions – If something doesn't make sense, speak up

• Pay on time – It keeps your scheme financially healthy and avoids awkward arrears notices

Transparency works both ways. Trustees should communicate clearly, and owners should engage actively. When both happen, schemes run smoothly.

Final Thoughts

"Levies" might still dominate the corridor chat, but contributions is the legally correct term under South African sectional title law. Knowing the difference helps you understand your obligations, speak the same language as the legislation, and support better governance in your scheme.

It's a small distinction with real-world impact.

Need help understanding how contributions are calculated or managed in your scheme? Cenprop Residential is here to support trustees and owners alike. Get in touch with our team for clarity and guidance.