Directors of Avalon Estate Homeowner Association v K Molema

The applicant, the Directors of Avalon Estate Homeowners Association, a non-profit company and community scheme under the Community Schemes Ombud Service Act 9 of 2011, brought a CSOS application against K Molema, the registered owner of unit 13 in the scheme. The HOA, represented by its managing agent under an authorising resolution, alleged that despite numerous written demands the respondent had failed to pay monthly levies and ancillary charges due under the scheme’s Memorandum of Incorporation. The applicant relied on a statement of account showing arrears of R6 664.80 as at 22 May 2023. The respondent did not respond to the CSOS correspondence, filed no submissions, and sought no relief.

• Whether the CSOS had jurisdiction under sections 38 and 39(1)(e) of the CSOS Act to determine the levy dispute.
• Whether the respondent, as owner and member of the HOA, was contractually bound by the scheme’s MOI and rules to pay levies and ancillary charges.
• Whether the applicant proved on a balance of probabilities that the respondent was indebted to it in the amount of R6 664.80.
• What payment order should be made, including whether instalments and temporary suspension of interest should be allowed.

The application succeeded. The respondent was declared indebted to the applicant in the amount of R6 664.80 in respect of levies and ancillary charges as at 22 May 2023. The respondent was ordered to pay that amount in four equal monthly instalments of R1 666.20, the first on or before 1 September 2023 and the remaining three on the first day of each succeeding month. No interest would accrue during the four-month period allowed for payment. The order did not affect the respondent’s ongoing obligation to pay regular monthly levies and ancillary charges. If the respondent defaulted on any instalment, the full outstanding amount would immediately become due and payable. No order as to costs was made.

A homeowners association may obtain relief under section 39(1)(e) of the CSOS Act for payment of arrear levies and ancillary charges where it proves, on a balance of probabilities, that the owner is a member bound by the scheme’s MOI and rules and that the claimed amount is due. Membership obligations in an HOA are contractual in nature, and levy contributions are enforceable as part of the owner’s duties within the community scheme.

The adjudicator’s remarks that levies are the 'lifeblood' of an HOA, that directors cannot perform their functions without owner contributions, and that defaulting owners are effectively subsidised by compliant owners are broader policy observations supporting the importance of levy enforcement rather than strictly necessary to the finding on liability. The decision to permit payment by instalments and to suspend interest for four months was also a discretionary remedial feature rather than part of the binding legal principle.

The decision illustrates the CSOS’s role in enforcing levy obligations within community schemes and confirms that HOA members are bound by the scheme’s MOI and rules on a contractual basis. It also demonstrates the evidentiary approach in undefended levy matters: where the association provides a proper resolution, statement of account, and proof of charges, and the owner offers no rebuttal, the arrears may be confirmed on a balance of probabilities. The order is also practically significant because it shows that an adjudicator may temper enforcement by allowing instalment payments and suspending interest for a limited period while still upholding the association’s right to recover levies.