COMMUNITY SCHEMES OMBUD SERVICE LEVIES

The Community Schemes Ombud Service Act requires each community scheme to pay an annual levy to fund the ombud service and authorises the Minister of Human Settlements to determine the levies and fees payable to the ombud.

 

In terms of draft regulations released last week, the annual levy will be based on the municipal valuation of each unit in a community scheme (see table).   Units with a municipal value of up to R500 000 are exempt from the levy.   Thereafter, the levies start at R3.40 a month, or R40.80 a year, and increase to R68 a month, or R816 a year, for units with a municipal value of over R2.25 million.

 

The scheme is responsible for paying the ombud service levies, not the unit owners in the scheme.  The scheme will have to collect the levies from owners and will have to budget for them.   Regular owners’ levies may have to be increased to take the ombud service levies into account.

 

Schemes must pay their levies to the ombud service by September 30 each year, or on a date determined by the chief ombud.

 

A community scheme that fails to pay the levy will be liable for interest, which will be charged at a rate that is one percentage point higher than the prime lending rate, compounded monthly in arrears.

 

An application for the ombud service to intervene in a dispute must be accompanied by a fee of R50.   If the dispute is referred to an adjudicator, there is an additional fee of R100.   People with a net monthly household income (gross income less pay-as-you-earn tax) of less than R5 500 are entitled to have both fees waived.

 

Community schemes or individuals who do not meet the above criteria for the waiver of annual levies or fees may nevertheless qualify for a waiver or discount if they can prove to the chief ombud that paying the levies or fees would cause them financial hardship.   They will have to submit a breakdown, on a prescribed form, of their income, expenses and assets.

 

 

PROPOSED LEVIES PER UNIT

 

Municipal valuation of unit

 

Monthly levy

 

Total over a year

 

Up to R500 000

 

Nil

 

Nil

R500 001 –  R600 000  R3.40  R40.80
R600 001 –  R700 000  R6.80  R81.60
R700 001 –  R800 000  R10.20  R122.40
R800 001 –  R900 000  R13.60  R163.20
R900 001 –  R1 000 000  R17.00  R204.00
R1 000 001 –  R1 250 000  R25.50  R306.00
R1 250 001 –  R1 500 000  R34.00  R408.00
R1 500 001 –  R1 750 000  R42.50  R510.00
R1 750 001 –  R2 000 000  R51.00  R612.00
R2 000 001 –  R2 250 000  R59.50  R714.00
R2 250 001 and above  R68.00  R816.00

 

Source:  Weekend Argus, Personal Finance, October 10, 2015