SA Property Law - Applicability of National Credit Act to sectional title levies

Applicability of National Credit Act to sectional title levies

Lisa Mills

In a recent case, the KwaZulu-Natal High Court Pietermaritzburg (sitting as a court of appeal) was called on to decide whether levies payable to bodies corporate under s 37 of the Sectional Titles Act 95 of 1986 are subject to the National Credit Act 34 of 2005 (the NCA). In TS Dlamini v Body Corporate of Frenoleen (KZNP) (unreported case no AR611/09; 11-03-2010) Swain J and Vahed AJ held that levies are not subject to the NCA.

The appellant argued that the charging of interest on arrear levies had the consequence that this was deemed to be an ‘incidental credit agreement’ as defined in s 1 of the NCA and that the respondent was therefore obliged to comply with the provisions of s 129 before issuing summons, which the respondent had failed to do.

The respondent argued that the claim for arrear levies did not constitute an incidental credit agreement under the NCA, for the following reasons:

• Section 1 of the NCA defines an incidental credit agreement as an agreement

‘in terms of which an account was tendered for goods or services that have been provided to the consumer, or goods or services that are to be provided to a consumer over a period of time …’.

• An ‘agreement’ is defined in NCA as

‘includ[ing] an arrangement or understanding between or among two or more parties, which purports to establish a relationship in law between those parties’.

• A ‘consumer’ is defined in the NCA as, inter alia,

‘the party to whom goods or services are sold … the party to whom money is paid, or credit granted … the party to whom or at whose direction money is advanced or credit granted under any other credit agreement’.

• A ‘credit provider’ in respect of a credit agreement to which the NCA applies is defined as, inter alia,

‘the party who supplies goods or services under [an] ... incidental credit agreement’.

• In the premises, a levy account cannot constitute an incidental credit agreement, because

-          a body corporate does not supply goods or services to its members, nor does it advance money or credit to its members;

-          levies charged by a body corporate to its members do not constitute an ‘account … tendered for goods or services … provided [by the body corporate] to the consumer’; and

-          levies are not payable by members of a body corporate in terms of an agreement, as defined in the National Credit Act, but are payable by virtue of the provisions of the Sectional Titles Act and the Regulations promulgated in terms thereof.


The court accepted this argument and found for the respondent on this issue.

Published: DE REBUS, MAY 2010

Lisa Mills BA LLM (UND) is an advocate in Durban. She appeared for the body corporate in this matter.

Search By Reference


Stay updated on the latest Property News

Property Management Banner