Major levy changes at South Africa’s biggest estates

A growing number of South African residential estates are transforming monthly levies into value-added benefits by offering rewards, lifestyle perks and enhanced community experiences.

As a result, more South Africans are starting to see their levy payments not just as a grudge purchase, but as something that improves their quality of life.

This is according to Van Deventer Dowlath & Marx’s director of community schemes and compliance, Johlene Wasserman, who said the estates that are pulling this off have one thing in common.

“Ask most people what a levy is, and they’ll tell you that it’s a debit order and a set of rules,” she said. “But when you look at the principle, a levy is really the price of a shared standard of living.”

Wasserman explained that this principle is becoming the focus of progressive South African estates, with forward-thinking complexes now turning monthly levy payments into tangible resident rewards.

“They’re moving away from the traditional admin-only function to actively curating value, and in so doing, they’re reframing the traditional levy ‘grudge purchase’,” she said.

According to the Association of Residential Communities, South Africa has more than 1.9 million homes located within estates, sectional title schemes, and homeowners’ associations (HOAs).

Collectively, they house an estimated 5 million people in organised communities, with annual levies amounting to around R11 billion.

Wasserman said that now, savvy trustees and directors are tapping into a massive consumer behaviour trend.

“About 85% of South Africans actively use loyalty programmes to supplement their household budgets, and the average number of programmes used per consumer has increased to 10.4,” she said.

By building reward mechanics into the levy structure, community schemes are aligning themselves with this deeply entrenched financial habit.

“They’re transforming an administrative chore into a familiar, rewarding experience that fits the modern South African consumer lifestyle,” Wasserman explained.

“When an estate moves from being a cost centre to a value generator, it creates a community that protects, stabilises and enhances its property values.”

Top estates redefining levy value

Among the estates reflecting this trend is Val de Vie in the Western Cape, where residents have access to extensive wellness and leisure facilities, including a heated indoor swimming pool, a gym, a sauna, a golf course, and multiple restaurants.

In a similar vein, Steyn City in Gauteng offers inhabitants access to walking and jogging promenades, mountain-bike trails, and a 2000-acre parkland ecosystem.

Waterfall City in Midrand, in addition to its on-site facilities, has also introduced a citywide app called Waterbucks for residents, shoppers, corporate tenants, and visitors.

Within its estate management component, the digital wallet rewards timeous levy payments, allows residents to track their balances, and lets them spend their earned currency immediately.

However, Wasserman warned that estates can’t simply implement a rewards programme. “There are two strict pillars of corporate governance that need to be adhered to,” she explained.

“The first is lawful authority, meaning that a scheme can only execute what its governing documents explicitly empower it to do.”

For an HOA, this power must be written into either its Memorandum of Incorporation or its Constitution. A sectional title scheme must abide by the Sectional Titles Schemes Management Act (STSMA).

Sectional titles must also ensure that their statutory Management and Conduct Rules are registered and approved by the Community Schemes Ombud Service. The second pillar is an adequate levy structure.

“Set out properly, an appropriate levy will pay for existing operations and, where the law requires it, provide for the future through a statutory 10-year Maintenance, Repair and Replacement Plan,” Wasserman said.

In sectional title schemes, Wasserman stressed, funding this reserve is an absolute statutory requirement under the STSMA.

In HOAs, the relevant obligations must be assessed against the scheme’s governing documents and applicable law.

“Lifestyle features are what a scheme responsibly adds after the structural fundamentals are fully funded. They are the surplus of excellent governance, never a substitute for it,” Wasserman said.

Estates don’t necessarily need multi-million-rand lifestyle centres or rewards apps to enhance the resident experience. For a huge precinct, value could look like innovation on the scale of a city, Wasserman explained.

“But for a thirty-unit sectional title scheme, value can be a sound maintenance plan, a well-run AGM, good communication, and even the odd social gathering that people actually look forward to attending,” she said.

By getting the corporate governance foundations right, she said, any community scheme can move from a place where residents merely pay for it to one where it actively pays residents back.