Zuzana Hegerova v The Trustees of Greenmarket Place Body Corporate

The applicant, Zuzana Hegerova, is the owner of unit 509 in the Greenmarket Place Body Corporate in Cape Town. She fell into financial difficulty due to unpaid maintenance by the father of her child, the economic effects of Covid-19, and the inability to rent out the flat for a period. She alleged that although she had paid the capital amount of the levies and interest, she was unable to keep up with legal fees and interest charged by the body corporate. She sought an order reversing legal fees and related interest debited to her levy account. The respondent body corporate opposed the application, relying on the applicant’s history of late or non-payment of levies, prior legal proceedings in the Cape Town Magistrates’ Court under case number 4579/2020, and a default judgment granted on 3 November 2020. The respondent contended that an amount of R62 958,51 remained outstanding and sought dismissal of the application together with payment of that amount plus interest. During the adjudication it emerged that the levy statement included legal expenses of R36 779,49 and legal fees of R5 175,00, but the respondent admitted that the legal costs awarded under the default judgment had not been taxed and that it did not have the applicant’s consent to debit those untaxed costs to her account.

• Whether the body corporate was entitled to debit the applicant’s levy account with legal expenses and legal fees that had not been taxed or otherwise authorised.
• Whether interest could lawfully be charged on those legal fees and expenses.
• Whether the contribution and amounts reflected on the levy statement were incorrectly determined or unreasonable under section 39(1)(c) and (e) of the CSOS Act.
• Whether the respondent was entitled to recover the claimed balance of R62 958,51 plus interest on the papers before the adjudicator.

The application was granted. The respondent was ordered to remove all legal expenses and legal fees from the applicant’s levy statement, recalculate interest so that it applied only to actual arrears and remove any interest imposed on legal expenses or legal fees, and provide the applicant with a revised levy statement within 14 days of the order. No order as to costs was made.

A body corporate may recover levy arrears and charge authorised interest on overdue amounts, but it may not debit an owner’s levy account with legal costs or legal expenses unless those costs are taxed, agreed by the member, or otherwise authorised by a judgment or order as required by PMR 25(4) and 25(5). Any interest calculated on unlawfully debited legal fees or expenses must likewise be removed.

The adjudicator made general observations confirming that levy liability is an incident of ownership in a sectional title scheme and that bodies corporate are required to collect contributions to maintain the administrative fund and cover common expenses. The adjudicator also observed that the respondent was generally entitled, by trustee resolution, to charge interest at 3% above prime on genuine overdue amounts until the account is settled in full. These remarks provided background to the decision but were not the decisive basis for granting relief.

The matter is significant in community schemes and sectional titles practice because it affirms that, although owners are undeniably liable for levies and properly authorised interest on arrears, a body corporate may not simply load untaxed legal costs and related interest onto an owner’s levy account. The decision reinforces the protections in PMR 25(4) and 25(5), requiring either taxation, agreement, or proper legal authority before legal costs can be debited. It is an important CSOS-level application of the statutory distinction between levy liabilities and ancillary legal charges.