Late penalty charges for sectional title managed apartments

Property owners should be aware that late penalty charges are not legally binding, and the managing agents may not issue a penalty fee on levies unless it is provided for in the Bylaws, Conduct Rules, Management Rules or Homeowners Association Contract.

An important aspect to note is that where a rental agency manages the apartment, the agency also takes care of payments on behalf of the owner. Payment of levies, water, electricity etc. is done at the time when rental payment is received.

Managing agents are well aware of the process and also of delays in rental payments being received. Per the lease agreement, tenants are required to pay rent on or before the 1^st of the month. By the 3^rd of the month a reminder is sent for payment and by the 7^th of the month a 20-business days' notice is issued for the outstanding payment.

How the 1^st of the month falls, is also vital to take note of as it can be over a weekend which will delay the time period for when payments are received from bank to bank. There is a third party involved before payments are sent directly to managing agents which does cause delays.

The agent has to provide the tenant with reasonable time to take corrective action in the event of non-payment of rent. Therefore, any levies, water and electricity payments will also be paid late. In terms of the Sectional Title Act, the managing agents cannot request a late penalty for these reasons unless it is specifically stated in the rules. Property owners who are paying late penalty fees on levies should look into the Bylaws and request that these payments are refunded or reversed.

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