Bella Rosa Three Home Owners Association v Brandt and Others

The appellant, Bella Rosa Three Home Owners Association, is a community scheme under the Community Schemes Ombud Service Act 9 of 2011. The first respondent, Anneke Brandt, became the owner of a vacant erf in the Bella Rosa estate on 20 September 2021, thereby becoming a member of the scheme. No construction had ever been undertaken on the property by the previous owner. From October 2021, the appellant imposed a building penalty against the first respondent's account, based on its constitution which required construction to commence within 18 months of the original sale from the developer. The first respondent only became aware of the penalties on 13 December 2021, due to an email error, by which time three months' worth of penalties and interest had been levied. She immediately challenged the penalties. The parties could not resolve the issue, and the first respondent referred a complaint to the Community Schemes Ombud Service (CSOS) seeking rescission of the 'unreasonable and therefore incorrect imposed fines/penalties'. An adjudicator found the penalties invalid due to unfair procedure. The appellant sought review and appeal of the adjudicator's decision in the High Court.

• Whether the adjudicator had jurisdiction to determine the dispute, given that the application was allegedly out of time under section 41(1) of the Community Schemes Ombud Service Act.
• Whether the dispute fell within the scope of the CSOS's jurisdiction, or whether it concerned a contractual penalty beyond the Act's ambit.
• Whether the adjudicator erred in law by failing to apply the contractual provisions of the appellant's constitution, specifically clause 10(b) and (c).
• Whether the adjudicator erred in finding that the building penalty was invalid due to a lack of fair procedure.

The review and appeal are dismissed, with no order as to costs.

An adjudicator under the Community Schemes Ombud Service Act has jurisdiction to determine disputes relating to building penalties imposed under a homeowners' association constitution, as such disputes fall within the broad definition of 'dispute' and 'financial issues' in the Act. Where a constitution contemplates negotiation between an owner and the association for extension of building timeframes, the association must afford the owner a fair opportunity to make representations and seek such extension before imposing penalties for non-compliance.

The court noted that even if section 41(1) applied, the appellant's own conduct in engaging with the first respondent up to 12 May 2022 meant that the 'decision' was only communicated then; the application to CSOS on 31 May 2022 would not be out of time. The court also observed that it would be contrary to the objectives of the Act, which promote quick and affordable access to justice, to exclude contractual disputes from CSOS jurisdiction, as this would force parties to approach the High Court at prohibitive expense.

This case confirms the jurisdiction of the Community Schemes Ombud Service (CSOS) and its adjudicators to determine disputes over building penalties imposed by homeowners' associations, rejecting arguments that such penalties are purely contractual matters beyond the Act's scope. It also establishes that where a community scheme's constitution provides for negotiated extensions of building timeframes, procedural fairness requires the association to engage with owners and afford them an opportunity to make representations before imposing penalties. This reinforces the contractual and procedural fairness obligations of homeowners' associations in enforcing building obligations against successors in title.