It is one of a Body Corporate’s most important functions to collect any arrear levies in a sectional title scheme as efficiently and quickly as possible.
In doing so it has a choice of collection options open to it, and one of those options is to apply for the sequestration of the defaulting owner’s personal estate. Even just the threat of sequestration might incentivise a recalcitrant debtor to pay up, but if not and if the sequestration order is granted, the Body Corporate becomes the “petitioning creditor” and risks having to pay into the estate to cover the “costs of sequestration”.
A recent Supreme Court of Appeal decision shows how and when such a risk may arise, and after analysing the facts and the law involved, we’ll list the other avenues of collection open to any Body Corporate in the same position.
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