Directors of Albertsdal Leopards' Rest Homeowners Association v SF Ntungwana and VL Shabangu

The applicant was the Directors of Albertsdal Leopards' Rest Homeowners Association NPC, a homeowners association constituting a community scheme under the Community Schemes Ombud Service Act 9 of 2011. The respondents, SF Ntungwana and VL Shabangu, were the registered co-owners of Unit 5996 in the scheme. The HOA, represented by its managing agent CSI Management, brought a dispute-resolution application under s 38 of the CSOS Act seeking relief under s 39(1)(e) for payment of overdue levies and ancillary charges. The applicant alleged that despite reminders by SMS, notices, letters of demand and phone calls, the respondents had failed to pay levies and related amounts due under the scheme's Memorandum of Incorporation and conduct rules. The amount claimed as at 4 July 2023 was R7,912.10, including levies, CSOS levies, interest, and administration or collection-related charges. The respondents filed no submissions in opposition.

• Whether the respondents, as co-owners in the community scheme, were contractually and legally obliged to pay levies and ancillary charges in terms of the HOA's Memorandum of Incorporation and conduct rules.
• Whether the applicant had proved on a balance of probabilities that the respondents were indebted in the amount of R7,912.10.
• Whether the HOA was entitled to charge interest on arrear levies under its governance documents.
• Whether the HOA was entitled to debit administration costs and collection charges to the respondents' account in light of the Debt Collectors Act.
• Whether CSOS could grant an order compelling payment of future monthly contributions under s 39 of the CSOS Act.

The application was granted substantially in favour of the applicant. The adjudicator declared that the respondents owed the applicant R7,912.10 in respect of levies and ancillary charges as at 4 July 2023. The respondents were ordered to pay that amount in six equal monthly instalments of R659.34, with the first instalment due within 30 days of delivery of the order and the remainder on the first day of each succeeding month. No interest would accrue on the outstanding amount within the period allowed for payment. The order did not affect the respondents' ongoing obligation to pay regular monthly levies and ancillary payments. If the respondents defaulted, the full amount would immediately become due and payable. The request for an order covering future monthly contributions was refused. There was no order as to costs.

A registered owner in a homeowners association community scheme is contractually bound by the scheme's Memorandum of Incorporation and conduct rules upon acquiring ownership, including obligations to pay levies and authorised ancillary charges. Where the applicant proves on a balance of probabilities that arrear levies and related charges are due, CSOS may grant relief under s 39(1)(e) of the CSOS Act for payment of those amounts. Interest on arrears and administration or collection charges are recoverable if validly authorised by the scheme's governing documents and lawfully imposed in compliance with applicable legislation such as the Debt Collectors Act. Relief directing payment of future monthly contributions falls outside the ambit of s 39 as applied in this matter.

The adjudicator made broader observations that levies are the 'lifeblood' of a homeowners association and that directors cannot perform their functions without contributions from owners. The adjudicator also commented generally on the governance structure of non-profit company HOAs and the importance of owner contributions to effective scheme management. These statements provided context but were not strictly necessary to the determination of the respondents' indebtedness.

The decision is significant as a CSOS levy-recovery determination confirming that owners in a homeowners association are bound by the scheme's MOI and conduct rules as a matter of contract and community-scheme governance. It illustrates CSOS's power under s 39(1)(e) of the CSOS Act to order payment of arrear levies and related charges, while also indicating a limit on that power by refusing relief aimed at future monthly contributions. The adjudication also confirms that interest and debt-collection related charges may be recoverable where expressly authorised by scheme documents and where statutory debt-collection requirements are met.