The Directors of Leopards Rest Homeowners Association NPC v Ben Mohale

The applicant, The Directors of Leopards Rest Homeowners Association NPC, is a non-profit company and a community scheme as defined in the Community Schemes Ombud Service Act 9 of 2011. The respondent, Ben Mohale, is the registered owner of Erf 4753 in the applicant’s homeowners association scheme in Albertsdal, Johannesburg. The applicant brought an application under sections 38 and 39(1)(e) of the CSOS Act for an order compelling payment of arrear levies and related amounts. It alleged that the respondent had failed to pay monthly contributions, causing financial prejudice to the HOA. The applicant, through its authorised managing agent, sought payment of R4 363.47 owing up to the end of April 2024. The respondent did not respond to the initial application or to later requests for submissions. The adjudicator considered the applicant’s written submissions, including its memorandum of incorporation and the directors’ resolution authorising the managing agent to act.

• Whether the respondent, as a registered owner and member of the homeowners association, was liable to pay levies and ancillary amounts under the HOA’s memorandum of incorporation.
• Whether the applicant had proved, on a balance of probabilities, that the respondent owed R4 363.47 in arrear levies and related charges.
• Whether the respondent’s failure to participate or submit a version justified acceptance of the applicant’s uncontroverted evidence.
• Whether relief under section 39(1)(e) of the CSOS Act should be granted for payment of a contribution or other amount due to the community scheme.

Order granted in favour of the applicant. The adjudicator found that the respondent owed the applicant R4 363.47 in respect of levies and ancillary amounts up to and including April 2024. The respondent was ordered to pay this amount in three equal instalments of R1 454.49, due on 1 June 2024, 1 July 2024, and 1 August 2024 respectively. The respondent was also ordered to continue paying regular monthly levies and ancillary payments reflected on the levy account. If the respondent defaulted on any one payment, the full amount would become immediately due and payable. There was no order as to costs.

A registered owner who becomes a member of a homeowners association is bound by the association’s memorandum of incorporation and is obliged to pay levies and ancillary charges in accordance with it. Where the applicant HOA proves the indebtedness on a balance of probabilities and the respondent offers no contrary version, an adjudicator may grant relief under section 39(1)(e) of the CSOS Act for payment of arrear contributions and related amounts. A member is not entitled to withhold levies for any reason where the governing instrument expressly prohibits such withholding.

The adjudicator made broader observations that levies are the 'lifeblood' of a homeowners association and that directors cannot perform their functions in the absence of funds from owners. The discussion of interest provisions in the MOI and the general explanation of the governance structure of a non-profit HOA were supportive contextual remarks rather than necessary to the narrow determination of liability for the claimed amount.

This adjudication reinforces a central principle of South African community schemes law: owners in a homeowners association are bound by the scheme’s memorandum of incorporation to pay levies, and they may not withhold payment unilaterally. It also illustrates the CSOS’s role as a forum for efficient levy recovery where an owner defaults and does not participate in proceedings. The decision aligns CSOS adjudication with High Court and Supreme Court of Appeal authority recognising that levy obligations arise from the governing instruments of the association and are essential to the viability of the scheme.