In terms of the Sectional Titles Act and the Standard Management Rules, Body Corporates are entitled to charge interest on outstanding levies.

In order to impose same all that is required is that a properly constituted trustees meeting passes a resolution advising all owners that interest will be charged on arrear levies, and stipulating what interest rate is going to apply.

In as much as the Usury Act is no longer of application, and as it has been decided by our courts that the National Credit Act does NOT apply to levy payments, the trustees can impose any interest rate that they so decide. However, we would caution trustees not to impose too high an interest rate as this might invite owners to challenge same in terms of the Conventional Penalties Act.

Note that the 'In Duplum' rule would be of application to the accrued interest amount, and the interest cannot be capitalised.