Don Diego Body Corporate v Xolani Nxumalo

The dispute arose within the Don Diego sectional title scheme. The body corporate alleged that Mr Xolani Nxumalo, an owner in the scheme, had been in persistent arrears with levy payments for many years and sought relief under section 39(1)(e) of the Community Schemes Ombud Service Act 9 of 2011 for payment of arrear levies and related amounts. Mr Nxumalo, in a separate but related CSOS application, complained that legal fees had been charged to his levy account after the account was handed to attorneys, sought a breakdown of charges over five years, and requested CSOS intervention, a meeting, and mediation. The two matters were consolidated because they involved the same parties and the same underlying dispute. At the hearing, Mr Nxumalo explained that he lost his job in 2019, had ongoing financial difficulties and labour litigation, accepted that he owed levies, but disputed legal fees and sought indulgence, including that interest be stopped. The body corporate confirmed that no payments had been received after conciliation and that the arrears had increased. Before adjudication, the body corporate had written off all legal fees and debt-collection fees on the account, but not interest on arrears. A settlement was discussed at the hearing but was not signed because Mr Nxumalo insisted it be marked 'without prejudice'. The adjudicator then proceeded on the papers and evidence already submitted. The body corporate produced an updated levy history, trustee resolutions authorising interest at 24% per annum under Prescribed Management Rule 21(3)(c), and authority for the managing agent to act. As at February 2025, according to the order's evidentiary summary, the amount claimed was R172 111.79, comprising levies and ancillary amounts including interest, after legal and debt-collection fees had been removed.

• Whether the body corporate had proved, on a balance of probabilities, that Mr Nxumalo was indebted to it for arrear levies and ancillary amounts.
• Whether the legal fees and debt-collection charges disputed by Mr Nxumalo remained recoverable through the CSOS process once they had been written off and credited to his account.
• Whether the body corporate was entitled to charge interest on arrear levies at 24% per annum under Prescribed Management Rule 21(3)(c) pursuant to a trustee resolution.
• Whether the relief sought by Mr Nxumalo in his separate application fell within the remedial jurisdiction of section 39 of the CSOS Act.
• Whether there had been any abuse of Mr Nxumalo's rights by the body corporate or any procedural unfairness by the CSOS.

The main application by Don Diego Body Corporate succeeded. The adjudicator ordered that Mr Xolani Nxumalo owed the body corporate R172 111.79 in respect of levies and ancillary amounts (including CSOS levies and interest), payable in 36 equal monthly instalments of R4 780.88 commencing on 1 March 2024, with the remaining instalments payable on the first day of each consecutive month thereafter. The order did not affect ongoing monthly levies and ancillary payments. If Mr Nxumalo defaulted on any one payment, the full outstanding amount would become immediately due and payable with interest, and interest would continue to accrue on new outstanding amounts. In addition, the adjudicator ordered in Mr Nxumalo's favour under section 39(7)(a) that the body corporate make all documents and information requested available strictly within the periods prescribed by Prescribed Management Rules 26 and 27. There was no order as to costs.

A body corporate in a sectional title scheme is entitled to recover arrear levies and ancillary amounts from an owner through a CSOS order under section 39(1)(e) of the CSOS Act where it proves the indebtedness on a balance of probabilities. Interest on arrear levies may lawfully be charged if authorised by written trustee resolution in terms of Prescribed Management Rule 21(3)(c), and such interest is compensatory rather than penal. Where disputed legal and debt-collection charges have been written off and credited to the owner's account, they no longer remain part of the justiciable dispute. Relief outside the categories listed in section 39 of the CSOS Act cannot ordinarily be granted by a CSOS adjudicator.

The adjudicator observed that defaulting owners are effectively subsidised by other owners who pay levies conscientiously and that a body corporate cannot perform its statutory duties without sufficient funds. The adjudicator also commented that the body corporate appeared not to have abused Mr Nxumalo's rights and had instead attempted to assist him by writing off legal and debt-collection fees. In addition, the adjudicator remarked on procedural fairness, noting that the parties had been given multiple opportunities to conciliate and that finality in the dispute was required. These observations, while informative, were not all strictly necessary to the dispositive finding on indebtedness and relief.

The decision is significant in the community schemes context because it reaffirms core sectional title principles: unit owners are obliged to pay levies, bodies corporate may recover arrears and charge interest where properly authorised, and persistent non-payment prejudices compliant owners and the financial viability of the scheme. It also illustrates the limits of CSOS adjudicative jurisdiction under section 39, especially where requested remedies fall outside the statutory categories. Further, the order demonstrates a practical adjudicative approach in balancing enforcement with fairness by allowing instalment payments while still confirming the debt. The decision also shows that where disputed legal fees have been written off, the live controversy narrows to the remaining lawful charges such as levies and authorised interest.