The applicant, Davola Ashleigh Bosch, was the owner of unit 38 and a trustee in the Ferndale Villas sectional title scheme. She brought an application under section 38 of the Community Schemes Ombud Service Act 9 of 2011 (CSOS Act) seeking relief under section 39(5)(a) and (b) relating to management services. Her complaints were directed mainly at the second respondent, Landlords Property Management, the managing agent of the scheme. She alleged that the managing agent charged VAT on invoices despite allegedly not being VAT-registered; charged owners incorrectly for prepaid water above municipal rates; circulated meeting notices without trustees' prior knowledge; distributed levy increase notices late and only to some members; failed to pay monies into the reserve fund; and failed to investigate incorrect water readings, which allegedly contributed to non-payment or partial payment of municipal accounts, disconnection of water to the complex in January 2023, and the raising of a special levy. The second respondent responded that the body corporate was entitled to recover water and sanitation charges in accordance with municipal tariffs; that the matters had been tabled for trustee discussion in April 2023; that dissatisfaction with some trustees led to the appointment of three new trustees; that issues identified by the auditor related to the reserve fund and the 10-year maintenance, repair and replacement plan; and that the body corporate did have a maintenance reserve fund account. The applicant sought to have the managing agent held accountable and to have its appointment cancelled.
The application was dismissed in terms of section 53(1)(a) of the CSOS Act as being without substance. Each party was ordered to pay its own costs.
A CSOS application seeking relief concerning a managing agent's compliance or termination may be dismissed under section 53(1)(a) where the body corporate, as a necessary interested party, is not properly joined, where the applicant has not exhausted internal remedies available under the scheme's governance rules, and where the allegations are not sufficiently substantiated. CSOS adjudicators, as creatures of statute, may exercise only the powers conferred by section 39 of the CSOS Act and cannot displace the body corporate's internal contractual and governance mechanisms for terminating a managing agent.
The adjudicator observed that a managing agent's contract may be cancelled by the body corporate without penalty if members pass a special resolution at a general meeting and give two months' notice, or by ordinary resolution in accordance with the contract when it is due to expire or is not renewed. The adjudicator also noted PMR 27(7), which requires a terminated managing agent to deliver relevant records to the body corporate within 10 days, and commented that trustees bear fiduciary duties to ensure this occurs. These remarks were explanatory and not essential to the dismissal of the application.
This decision is significant in community schemes jurisprudence because it underscores the limits of CSOS adjudicative power and the importance of internal governance mechanisms in sectional title schemes. It confirms that disputes about terminating a managing agent's contract ordinarily require proper participation by the body corporate and use of the scheme's internal processes, such as trustee meetings and general meetings with the appropriate resolutions. It also illustrates that CSOS applications may be dismissed where interested parties are not properly joined and where internal remedies have not been exhausted. The order reflects the principle that CSOS is a statutory forum with confined powers and cannot be used to bypass contractual and governance procedures within a scheme.