Can you be evicted from a life rights retirement village for non-payment of levies?
Life rights are regulated in terms of the Housing Development Schemes for Retirement Persons Act 65 of 1988 (HDSRP), and the terms of your life rights contract are extremely important, including what happens in the event that a life rights holder fails to pay their levies. Before buying into a life rights complex, it is therefore important to ensure that the contract complies with the HDSRP Act and that it sets out all limitations and rules that apply to the life rights holder.
In terms of the act, provision is made for the eventuality that a life rights holder fails to pay their levies
Firstly, interest at a rate determined by the body corporate from time to time will be charged on the overdue levies, with this interest accruing from the date that the levy falls due to the date that the levy is paid.
Where a life rights holder fails to pay levies and interest owing, the body corporate should give the member reasonable time in which to remedy the matter. If the member still fails to pay, the body corporate has the right to disconnect and/or discontinue services to the member’s unit and refuse the member access to the complex’s communal facilities. The body corporate may also institute legal proceedings against the member, with the member being liable for legal costs and penalties.
Further, life rights developers are obliged by law to provide a two-year cost estimate in respect of levies, making it easier for retirees to manage their cash flow into the future.
This means that budgeting in advance for your levies should be more cost-effective and manageable and, if you’re managing your retirement income carefully, you should not find yourself in a position where your levies are in arrears.
That said, life rights contracts can be long, complex and difficult to understand, and it is always advisable to see advice from an experienced property attorney before signing the contract so that you fully understand what your legal position will be if you run into future financial difficulties.
In addition, we recommend that you consult with a qualified, independent financial advisor who can prepare cash flow forecasts for you to ensure that you can afford the costs of your life rights unit going forward.
Simon Dippenaar & Associates Inc. is a law firm in Cape Town, Johannesburg and Durban, offering highly specialised services to landlords, property agents, and investors. Our property lawyers represent legal interests with uncompromising dignity. If you have queries about sectional title rights or life rights retirement villages, contact one of our Cape Town lawyers, or other partners across South Africa, by calling 086 099 5146, or email email@example.com.