Leopards Rest Homeowners' Association NPC v K & H Rabali

Leopards Rest Homeowners' Association NPC (LRHOA), a non-profit homeowners' association and community scheme situated in Albertsdal, Johannesburg, brought an application under section 38 read with section 39(1)(e) of the Community Schemes Ombud Service Act 9 of 2011. The respondent, K & H Rabali, are co-owners of Erf 6005 within the scheme and became members of the association by virtue of ownership under the memorandum of incorporation (MOI). LRHOA alleged that the respondents were liable to pay monthly levy contributions in terms of the MOI but had fallen into arrears in the amount of R1356.58, including interest at 1.25% per month. The respondents did not respond to the section 43 notice or subsequent opportunities to answer the claim. A certificate of non-resolution was issued and the matter proceeded to adjudication on the papers.

• Whether LRHOA qualified as a community scheme and had standing to seek relief under the CSOS Act.
• Whether the respondents, as owners and members of the homeowners' association, were obliged under the MOI to pay levy contributions.
• Whether the applicant proved on a balance of probabilities that the respondents were in arrears in the sum of R1356.58.
• Whether an order for payment of arrear levies should be granted under section 39(1)(e) of the CSOS Act.
• Whether any costs order should be made.

The application was granted. The respondents were ordered to pay arrear levy contributions of R1356.58 to the applicant on or before 31 March 2023. No order as to costs was made.

A homeowners' association that qualifies as a community scheme under the CSOS Act may obtain an order under section 39(1)(e) for payment of arrear levies where the respondent is an owner/member bound by the scheme's MOI, the MOI makes levy contributions compulsory, and the applicant proves the indebtedness on a balance of probabilities. In the absence of any answering version from the respondent, unchallenged documentary evidence of the arrears is sufficient to justify such an order.

The adjudicator remarked that non-payment of levies can seriously destabilise a scheme because levies are the 'lifeblood' of shared living schemes and are necessary for maintenance, insurance, security, repair and upkeep. The adjudicator also commented generally that cost orders are more commonly associated with dismissals under section 53 of the CSOS Act and that parties usually bear their own costs in section 54 adjudications.

The decision affirms, within the CSOS adjudication framework, that homeowners' association members are contractually bound by the MOI and rules to pay levies, and that CSOS may grant payment orders under section 39(1)(e) where arrears are proved on the papers. It also underscores the practical importance of levy enforcement in sustaining community schemes and demonstrates that failure to respond may result in relief being granted on uncontroverted evidence.