The body corporate has to pay expenses. These include administration expenses, rates, taxes, water, electricity, gas, security, refuse, cleaning, maintenance, repairs etc.

The trustees should produce a budget of expected expenses, including repairs and maintenance (e.g. painting), and need a reasonable contingency. These expenses should then be allocated to the sections in terms of the PQ's and this is charged to the owners in the form of a normal levy.

If a shortfall occurs due to an unexpected expense then a special levy will be charged to the owners in terms of the PQ to cover this unexpected expense. If the budgets are correctly prepared and all the owners pay their levies, a special levy should only be raised if an unexpected expense is incurred by the body corporate that will not be covered by the contingency allowed in the budget.

The levies are determined by the trustees and agreed upon by all the owners at the Annual General Meeting. The trustees need to notify the all the owners in writing what the levies will be for the financial year within 14 days of holding the Annual General Meeting.

The sectional titles act has been amended in 2003 to specify that the owners who were owners when the levy was agreed upon is liable for the levies. Therefore if an owner sells their unit during the year they will be liable for the levies until the end of the financial year.

Currently there are two methods used to overcome this situation of the seller being liable for the levies until the end of the financial year.

One is to enter into a tri-partite agreement. This is an agreement with three parties, being the seller, the purchaser and the body corporate. The agreement is that the purchaser will be liable for the levies from the date of registration, and that the seller will not be liable for the levies from the date of registration. Therefore the body corporate can only claim any levies from the date of registration of the unit from the purchaser.

Another method is to add a clause in the offer to purchase and have the seller and the purchaser sign this clause. A problem here is that the body corporate is not part of this agreement and may lawfully claim any outstanding levies until the end of the financial year, regardless of the registration, from the seller (whom has moved out of the complex). The seller would then have to claim the levies that they have paid from the purchaser.