The Directors of Oakwood Estate Homeowners Association v D Phiri and K M Phiri

The applicant, The Directors of Oakwood Estate Homeowners Association, is a homeowners association and a community scheme under the Community Schemes Ombud Service Act 9 of 2011. The first and second respondents, D Phiri and K M Phiri, are co-owners of a unit in Oakwood Estate in Terenure, Kempton Park, Gauteng. The applicant, assisted by its managing agent Prestprops Property Management (Pty) Ltd and acting under a resolution dated 1 May 2022, brought an application to the Community Schemes Ombud Service in terms of section 38 of the CSOS Act for relief under section 39(1)(e), seeking payment of arrear levies. The applicant alleged that the respondents had failed to pay levies despite monthly levy statements, reminder notices, emails and phone calls since 8 June 2022. The matter was referred to conciliation, which failed, and then to adjudication. The respondents did not file any submissions or provide any explanation for the non-payment. The amount claimed as arrear levies was R13 766.55.

• Whether the dispute fell within the jurisdiction of the CSOS under the CSOS Act.
• Whether the applicant was entitled to relief under section 39(1)(e) of the CSOS Act for payment of arrear levies.
• Whether the respondents, as co-owners and members of the homeowners association, were contractually bound by the scheme's Memorandum of Incorporation and conduct rules to pay levies.
• Whether, on the evidence before the adjudicator and in the absence of a response from the respondents, the arrear levies were due and payable.

The application was upheld. The respondents were ordered, jointly and severally, to pay the applicant R13 766.55 within 30 days of the order. No order as to costs was made.

An owner who purchases property in a homeowners association becomes contractually bound by the scheme's Memorandum of Incorporation and conduct rules, including the obligation to pay levies. Where the association proves on a balance of probabilities that levies are in arrears and due, and the respondents provide no contrary explanation or defence, an adjudicator may grant relief under section 39(1)(e) of the CSOS Act ordering payment of the arrears.

The adjudicator observed that non-payment of levies threatens the financial viability of the scheme and its ability to pay local authorities and service providers, and noted generally that responsibility must be placed on the person responsible for the default. These remarks supported the reasoning but were not strictly necessary to the order.

The decision affirms the enforceability of levy obligations in homeowners associations through the CSOS dispute-resolution mechanism. It reflects the South African legal position that the relationship between a homeowners association and property owners within the estate is contractual and that owners are bound by the scheme's constitutive documents and rules. It is significant as an example of CSOS providing accessible enforcement of financial obligations essential to the sustainability of community schemes.