Directors of Birdwood Homeowners Association v L.H. Raphuti

The applicant, Directors of Birdwood Homeowners Association, is a homeowners association and community scheme as defined in the Community Schemes Ombud Service Act 9 of 2011. The respondent, L.H. Raphuti, is the registered owner of Portion 5 of Erf 1116 within the scheme at Boem Singel, Ifafi Extension 6, Brits, Gauteng. The applicant alleged that the respondent's levy account had remained in arrears despite final reminder notices being sent monthly by the managing agent. The applicant, acting through its duly authorised managing agent, referred the dispute to CSOS under section 38 of the CSOS Act and sought an order under section 39(1)(e) for payment of the outstanding levies and interest. The amount claimed as at March 2024 was R62 245.98. The respondent was invited on two occasions to submit written submissions but failed to do so, and therefore did not dispute liability or the amount claimed. The applicant filed a signed mandate authorising the managing agent, an up-to-date levy history statement, and the HOA's MOI and rules.

• Whether the dispute fell within the jurisdiction of the CSOS as a dispute concerning the administration of a community scheme.
• Whether the respondent, as registered owner and member of the homeowners association, was obliged under the MOI to pay levies and interest.
• Whether the applicant had proved on a balance of probabilities that the respondent was indebted to it in the amount of R62 245.98 for arrear levies and interest.
• Whether an adjudication order should be granted under section 39(1)(e) of the CSOS Act for payment of the outstanding amount, and on what terms.

Application upheld. The adjudicator found for the applicant and ordered that the respondent owes the applicant R62 245.98 in respect of levies and interest as at March 2024. The amount must be paid in 10 equal monthly instalments of R6 224.60 commencing on 1 April 2024, with the next 9 payments due on the first business day of each succeeding month starting 1 May 2024. The respondent must also continue paying the regular monthly levies and ancillary amounts reflected on the levy account. If the respondent defaults on any one payment, the full outstanding amount becomes immediately due and payable. There was no order as to costs.

A registered owner within a homeowners association becomes a member of the association by virtue of ownership and is bound by the association's MOI and rules, including the obligation to pay levies and contractually authorised interest on arrears. Where the HOA places uncontested documentary evidence before CSOS showing the existence and amount of arrear levies, and the owner does not dispute the claim, the adjudicator may find that the applicant has proved its case on a balance of probabilities and may grant a payment order under section 39(1)(e) of the CSOS Act.

The adjudicator remarked that levies are the 'lifeblood' of a HOA and that directors cannot perform their functions in the absence of funds from owners. The reference to Eye of Africa Homeowners Association NPC v Mudanalwo and Another as confirming the importance of levy obligations was supportive of the reasoning, but not strictly necessary to the outcome given the respondent's failure to contest liability and the direct reliance on the MOI and documentary evidence.

The decision illustrates the use of the CSOS adjudication process to recover arrear levies in homeowners associations. It reinforces that registered owners in an HOA automatically become members bound by the MOI and rules, including levy obligations, and that undisputed documentary proof of arrears can suffice to obtain relief under section 39(1)(e) of the CSOS Act. The matter is important in practice because it confirms the centrality of levy collection to the functioning of community schemes and demonstrates CSOS's willingness to grant structured repayment orders while preserving the HOA's right to ongoing monthly levies.