Montwood Body Corporate v SS Ngubane

Montwood Body Corporate, a sectional title scheme situated in Montclair, Durban, brought an application to the Community Schemes Ombud Service (CSOS) against SS Ngubane, the registered owner of Unit 1 in the scheme. The body corporate alleged that the respondent had failed to pay levy contributions due to the scheme. The arrears were stated to be R61 344.22, inclusive of interest at 2% per month and recoverable costs. The applicant relied on a trustee resolution authorising the institution of proceedings and submitted a contribution statement breaking down the arrears, as well as authority under the management rules for charging interest. The matter was referred to adjudication after conciliation failed and a certificate of non-resolution was issued on 22 September 2023. Despite notice in terms of section 43 of the CSOS Act and further opportunity to respond, the respondent did not file any response or submissions.

• Whether the CSOS had jurisdiction under sections 38 and 39(1)(e) of the Community Schemes Ombud Service Act 9 of 2011 to determine a levy recovery dispute between a body corporate and a unit owner.
• Whether the applicant had placed sufficient evidence before the adjudicator to prove, on a balance of probabilities, that the respondent owed arrear levy contributions of R61 344.22.
• Whether the body corporate was entitled under the Sectional Titles Schemes Management Act 8 of 2011 and applicable management rules to raise levies and charge interest on overdue amounts.
• Whether any costs order should be made in the circumstances.

The application was granted. The respondent was ordered to pay arrear levy contributions of R61 344.22 in full on or before 31 March 2024. No order as to costs was made.

A body corporate may obtain relief under section 39(1)(e) of the CSOS Act for payment of arrear levies where it establishes, on a balance of probabilities, through relevant documentary evidence such as contribution statements and authorising resolutions, that the owner is liable for unpaid contributions. In a sectional title scheme, levies validly raised in terms of the STSMA and applicable rules are enforceable, and an owner is not entitled to withhold payment because of a dispute about the necessity or wisdom of the levies.

The adjudicator observed that non-payment of levies can seriously destabilise a scheme and that levies are the 'lifeblood' of shared living schemes because they fund maintenance, repair, insurance, security and other common expenses. The adjudicator also remarked generally that costs orders are more commonly made in section 53 dismissals involving frivolous or vexatious matters, and that parties in section 54 adjudications are generally expected to bear their own costs.

The matter confirms the practical use of the CSOS adjudication process for the recovery of arrear levies by a body corporate from a unit owner. It reinforces the principle in sectional title governance that levies are essential to the financial viability of a scheme and that owners may not simply withhold payment because they disagree with the levies. The order also illustrates that uncontested documentary proof of levy indebtedness will generally suffice for relief under section 39(1)(e) of the CSOS Act.