Waterford Estate Homeowners Association NPC v Riverside Lodge Body Corporate and Others

Waterford Estate Homeowners Association NPC (Waterford) is the homeowners’ association of Waterford Estate, a residential development comprising full title erven and sectional title units, including units in the Riverside Lodge Sectional Title Scheme administered by Riverside Lodge Body Corporate (Riverside). Since 2002, sectional title unit owners paid contributions to Waterford similar to full title owners. A dispute arose in 2007 when unit owners sought reduced contributions, leading to a settlement agreement containing a formula for contributions. Riverside later failed to pay contributions levied in accordance with Waterford’s determination, and Waterford cancelled the settlement agreement in February 2018. Waterford approached the Community Schemes Ombud Service (CSOS) for relief under s 38 of the Community Schemes Ombud Service Act 9 of 2011, seeking payment of levies and interest for 2017–2018 and thereafter. The Riverside respondents disputed liability, contending that unit owners were not members of Waterford, that levies were not calculated per the settlement formula, and that post-2018 levies were unreasonable. The CSOS adjudicator found in favour of Riverside on these points. Waterford then approached the High Court seeking to review the adjudicator’s decision and to declare s 39(1)(c) read with s 39(1)(e) of the Act unconstitutional for vagueness. The High Court dismissed the application. Waterford appealed to the Supreme Court of Appeal.

The application to amend the notice of appeal to include a constitutional challenge was dismissed with costs. The appeal succeeded in part. The High Court’s order was set aside and replaced. The adjudicator’s findings that the unit owners were not members of Waterford, and her determinations regarding levies and interest, were reviewed and set aside. The unit owners were declared members of Waterford. The determination of levies for 2017–2020 was remitted to a new adjudicator. Interest on arrear levies was substituted with specified rates. The first to one hundred and second respondents were ordered to pay costs, and their attorneys were ordered to pay certain costs de bonis propriis.

The judgment affirms the constitutional validity of s 39(1)(c) of the Community Schemes Ombud Service Act and clarifies that the statutory standard of reasonableness is neither vague nor constitutionally suspect. It confirms that CSOS adjudicators have broad but bounded powers to intervene in levy disputes to ensure fairness, subject to procedural safeguards and judicial review. The case is significant for community scheme governance, reinforcing regulatory oversight over homeowners’ associations while maintaining adherence to administrative-law principles.