Mashengoane v Trustees of Honey Grove Body Corporate

Madise Rato Mashengoane, the registered owner of unit 11 in Honey Grove Body Corporate, brought an application to the Community Schemes Ombud Service under section 38 of the Community Schemes Ombud Service Act 9 of 2011. He alleged that during 2017 to 2018 he did not receive invoices from the scheme and only received an invoice in September 2018, after which a substantial amount of about R75 000 was claimed from him. He contended that the trustees ignored his requests for a more manageable payment arrangement, instructed lawyers and debt collectors, and effectively required payment over six months. He sought an order requiring the body corporate to allow a 12 to 18 month payment plan, to refund interest charged during the period of delayed invoicing, and to apportion levies in accordance with the prescribed management rules under the Sectional Titles Schemes Management Act 8 of 2011 as amended in 2017. The respondent did not file substantive answering submissions, apart from a letter of demand from its attorneys.

• Whether the CSOS adjudicator could grant relief under section 39(1)(c) of the CSOS Act concerning allegedly unreasonable or incorrectly determined levy contributions or the manner of their payment.
• Whether the body corporate had lawfully imposed or calculated the levy burden in accordance with the prescribed and applicable management rules under the STSMA.
• Whether an amendment or departure from prescribed management rules affecting owners' levy liability required a unanimous resolution and, where an owner was adversely affected, that owner's prior written consent.
• Whether the applicant was entitled to a longer payment plan for the arrear levy amount.
• Whether the applicant was entitled to a refund of interest charged on the arrears during the period in which invoices were allegedly delayed.

The application was substantially upheld. The respondent was ordered to afford the applicant a 12 month payment plan for the approximately R75 000 owed, and the adjudicator held that levies must be calculated in accordance with the 2017 management rules of the scheme. The applicant's request for a refund of interest charged during the 2017 to 2018 delay period was refused. No order as to costs was made.

A body corporate may not alter, substitute or apply levy-related management arrangements inconsistently with the prescribed or applicable management rules unless the statutory requirements under section 10(2)(a) of the STSMA are met, including a unanimous resolution and, where an owner is adversely affected, that owner's prior written consent as contemplated by section 11(2)(b). Where those requirements are not met, levy calculations must accord with the existing applicable management rules. Under section 39(1)(c) of the CSOS Act, an adjudicator may order a different and more reasonable method of payment of levies.

The adjudicator observed generally that the law, as confirmed in Marine Sands, is intended to ensure that prospective and existing owners know the participation quota and levy burden attached to ownership, and that increases in levy liability amount to a diminution of ownership rights. The adjudicator also remarked that the body corporate should operate with regard to owners' circumstances, although the legally binding relief ultimately granted was limited to a 12 month payment plan and did not extend to remission of interest.

The matter is significant in community schemes and sectional title law because it reinforces that levy liability must be determined strictly in accordance with the STSMA and the applicable management rules, and that bodies corporate cannot effectively alter owners' levy burdens without complying with statutory requirements for unanimous resolutions and consent where owners are adversely affected. It also illustrates the CSOS's power under section 39(1)(c) to intervene not only in the correctness or reasonableness of levy contributions but also in the manner and timing of payment.