Daphne Lambert v Millward Place Body Corporate

The applicant, Daphne Lambert, is the registered owner of unit 1 in the Millward Place sectional title scheme. She brought an application to the Community Schemes Ombud Service under sections 38 and 39(1)(c) of the Community Schemes Ombud Service Act 9 of 2011, challenging legal fees and related charges that had been added to her levy account by the respondent body corporate. The dispute arose in the context of arrear levies and electricity charges, and summons had been issued in the Johannesburg West Magistrates' Court in January 2023, although those proceedings were later suspended. The applicant alleged that she had already paid amounts toward legal costs, including R9 000 previously and R5 000 in February 2023, but that the accounting treatment remained irregular and interest was still charged on the full outstanding balance. The respondent stated that the scheme had experienced financial difficulties, including disconnection of electricity by the City of Johannesburg due to non-payment, and that although the applicant had been paying R3 500 monthly toward arrears since May 2023, her payments needed to cover utilities as well. The respondent had also agreed to restore the applicant's electricity supply. After conciliation failed and a certificate of non-resolution was issued on 14 August 2023, the matter proceeded to adjudication on the papers.

• Whether the legal fees and costs added to the applicant's levy account were incorrectly determined or unreasonable under section 39(1)(c) of the CSOS Act.
• Whether the respondent body corporate had lawfully added legal fees and related interest to the applicant's account without taxation, agreement, or consent as contemplated by Prescribed Management Rule 25(4) and (5).
• Whether the applicant was entitled to rectification of her account by deduction of unlawfully charged legal fees and interest.
• Whether any costs order should be made in the CSOS adjudication.

The application was granted. The respondent body corporate was ordered, in terms of section 54(3) of the CSOS Act, to determine the exact amount of legal fees/costs and related interest charged to the applicant's account contrary to Prescribed Management Rule 25(4) and (5), and to rectify the account by deducting those amounts on or before 31 January 2024. No order as to costs was made.

A body corporate is entitled to recover levies and owners may not withhold payment merely because they dispute the charges; however, legal fees incurred in collecting arrear levies may not be added to an owner's account unless they are lawfully recoverable in compliance with Prescribed Management Rule 25(4) and (5), including where such costs have been taxed, agreed, or consented to. Where legal fees and related interest have been debited without such compliance, CSOS may order the body corporate to determine the unlawful amounts and rectify the owner's account by deducting them.

The adjudicator made general observations that levies are the 'lifeblood' of shared living schemes and that failure by members to pay levies can destabilise the scheme and prejudice all owners. The adjudicator also observed that costs orders are generally not made in section 54 adjudications unless the application is frivolous, vexatious, misconceived, without substance, or there has been non-compliance with section 51, although that was not applicable here.

This adjudication is significant in community schemes and sectional title governance because it affirms that, while owners remain obliged to pay levies and cannot unilaterally withhold them, a body corporate may not simply load legal fees and related interest onto an owner's account in the absence of compliance with the prescribed management rules. The decision underscores that legal collection costs must be properly taxed, agreed, or otherwise lawfully recoverable before they may be debited to an owner's account. It therefore reinforces financial accountability and procedural fairness in the administration of sectional title schemes under the CSOS Act and STSMA framework.