Lisbon Court Body Corporate v VT Berry

The applicant, Lisbon Court Body Corporate, brought an application under section 38 read with section 39(1)(e) of the Community Schemes Ombud Service Act 9 of 2011 (CSOS Act) against the respondent, VT Berry, the registered owner of unit 26 in the sectional title scheme. The body corporate alleged that the respondent had failed over a period of time to pay levy contributions due in respect of his unit. According to the October 2023 statement, the arrears totalled R18 412.91, inclusive of interest. The body corporate stated that requests for payment had been made, internal remedies were exhausted, and the trustees resolved to proceed through CSOS. The respondent did not file a response to the allegations despite being notified and given opportunities to do so. The matter was referred to adjudication after conciliation failed and a certificate of non-resolution was issued on 6 December 2023.

• Whether the CSOS had jurisdiction under section 39(1)(e) of the CSOS Act to order payment of arrear levy contributions.
• Whether the body corporate proved, on a balance of probabilities, that the respondent was liable for the outstanding levies and interest.
• Whether all items claimed by the body corporate were lawfully recoverable from the respondent.
• Whether the amount charged for unblocking a drain could be recovered in the absence of proof that it was debited in accordance with Prescribed Management Rule 25(4) and 25(5).
• Whether a costs order should be made in the adjudication.

The application was granted in part. The respondent was ordered to pay arrear levy contributions to the applicant in the amount of R17 866.66 in full on or before 31 May 2024. No order as to costs was made.

A body corporate may obtain relief under section 39(1)(e) of the CSOS Act for payment of arrear levies where it proves, on a balance of probabilities, that levies were validly raised and remain unpaid by the unit owner. A respondent owner who provides no valid defence remains liable for such contributions. However, amounts debited to an owner's account that are not shown to be authorised contributions or charges under the STSMA and prescribed management rules are not recoverable without the member's consent or proper legal authority.

The adjudicator observed that levies are the 'lifeblood' of shared living schemes and that non-payment can seriously destabilise a scheme and prejudice the collective interests and investments of all owners. The adjudicator also remarked generally that costs orders are not usually made in section 54 CSOS adjudications, and are more readily granted in matters dismissed under section 53.

The matter illustrates the CSOS adjudication process for recovery of arrear levies by a body corporate and confirms that levy obligations in sectional title schemes are enforceable through section 39(1)(e) of the CSOS Act. It also underscores that owners cannot simply withhold levies because they dispute them, while at the same time showing that a body corporate must prove that ancillary charges beyond ordinary contributions were lawfully imposed under the prescribed management rules.