Directors of Flamingo Bay Homeowners Association v Denise Merolene Francis

The applicant, the Directors of Flamingo Bay Homeowners Association (FBHOA) NPC, is the governing homeowners association of a community scheme situated at ERF Middlevlei Estate, Mereenbosch, Hermanus, Western Cape. The respondent, Denise Merolene Francis, is the registered owner of unit 157 in the estate and therefore a member of the HOA subject to its constitution and conduct rules. The HOA alleged that the respondent had fallen into arrears with levy payments. At the time the application was submitted on 31 August 2023, the arrears were stated to be approximately R13 543.17/R13 543.73. The applicant stated that the respondent had been notified of the arrears by SMS and email in accordance with the HOA constitution and that a resolution had been taken authorising the institution of the dispute. No submissions were received from the respondent. During adjudication, the adjudicator requested an updated invoice, and the applicant then produced an amended statement reflecting arrears of R18 765.63 as at 27 November 2023.

• Whether the respondent, as owner of a unit within the HOA, was bound by the FBHOA constitution and conduct rules regulating levy payments.
• Whether the applicant had proved, on a balance of probabilities, that the respondent was in arrears and liable to pay the outstanding levies.
• Whether relief under section 39(1)(e) of the Community Schemes Ombud Service Act 9 of 2011 could be granted for payment of the outstanding contribution amount.
• Whether the adjudicator could order payment of the updated amount reflected in the amended invoice furnished during the adjudication.

The application was granted. The respondent was ordered to pay R18 765.63 to the applicant in three equal instalments of R6 255.21, effective 15 December 2023 and on the first day of each subsequent month until 1 February 2024. The order did not affect the respondent’s ongoing obligation to pay regular monthly levies and ancillary charges. No interest would accrue during the allowed payment period, but if payment was not made as ordered, the full amount would become immediately payable. No order as to costs was made.

A property owner in a homeowners association is bound by the HOA’s constitution and conduct rules upon acquiring ownership in the scheme, including the obligation to pay levies. Where the association proves on a balance of probabilities that levies are due and unpaid, and there is no contrary evidence from the owner, an adjudicator under section 39(1)(e) of the CSOS Act may order payment of the outstanding amount reflected in the proved levy account, including an updated amount provided during adjudication.

The adjudicator observed that levies are 'the lifeblood of a HOA' and that directors cannot perform their functions without members’ contributions. The adjudicator also made general remarks, with reference to case law, on the contractual and statutory nature of scheme rules and on the limited right of appeal under section 57 of the CSOS Act. These observations were supportive of the reasoning but not strictly necessary to the dispositive finding on the arrear levies.

The decision illustrates the CSOS’s role in enforcing levy obligations within homeowners associations and confirms that levy recovery disputes are appropriately dealt with under section 39(1)(e) of the CSOS Act. It reinforces the principle in South African community schemes law that owners who acquire property in a scheme are bound by the scheme’s constitutional and conduct-rule framework and may be compelled to pay levies necessary for the administration and maintenance of the scheme. It also shows that, where uncontested evidence establishes arrears, an adjudicator may grant relief based on an updated statement of account.