Mount Verna Body Corporate v Chancellorville Property CC

The applicant, Mount Verna Body Corporate, is the body corporate of a registered sectional title scheme (SS103/93) situated in Yeoville, Johannesburg. The respondent, Chancellorville Property CC, is the registered owner of sections 24 and 31 in the scheme and therefore a member of the scheme. The body corporate alleged that the respondent failed over time to pay levy contributions due in respect of both units. According to the applicant's statements as at March 2023, the arrears for unit 24 were R23 562.06 and for unit 31 were R52 039.49, totalling R75 601.55, inclusive of interest at 10.25% per annum. The applicant stated that requests for payment had been made, internal remedies were exhausted, and the trustees resolved to recover the debt through the Community Schemes Ombud Service (CSOS). The respondent did not respond to the section 43 request dated 24 March 2023, nor did it file final written submissions. A certificate of non-resolution was issued on 31 May 2023, and the matter proceeded to adjudication on the papers.

• Whether the CSOS had jurisdiction under sections 38 and 39(1)(e) of the Community Schemes Ombud Service Act 9 of 2011 to determine the dispute.
• Whether the respondent, as owner of sections 24 and 31, was liable to pay the arrear levy contributions claimed by the body corporate.
• Whether the applicant had provided sufficient evidence on a balance of probabilities to justify an order for payment of R75 601.55 inclusive of interest.
• Whether interest on overdue levy amounts was lawfully chargeable under Management Rule 21(3)(c).
• Whether the payment of the arrear levies should be ordered immediately or by instalments.
• Whether any costs order should be made.

The application was granted. The respondent was ordered to pay arrear levy contributions to the applicant in the amount of R75 601.55, inclusive of interest. Payment was to be made in 12 equal monthly instalments of R6 300.13 per month to the executive committee or managing agent, plus interest at 10.25% per annum, commencing on 1 October 2023 until the arrears were fully settled. The order specified that this instalment arrangement did not affect the respondent's obligation to continue paying current monthly levies and allied charges. If the respondent defaulted, the full outstanding balance would immediately become due and payable. No order as to costs was made.

A body corporate of a sectional title scheme is entitled under section 39(1)(e) of the CSOS Act to obtain an adjudication order compelling an owner to pay arrear levy contributions where the evidence on a balance of probabilities establishes the debt. Levy obligations are enforceable notwithstanding any owner dissatisfaction with the levies, and interest may be charged on overdue amounts where this is authorised by the applicable management rules and trustee resolution. In an appropriate case, the adjudicator may order payment by instalments while preserving the owner's ongoing duty to pay current levies.

The adjudicator remarked that levies are the 'lifeblood' of shared living schemes and that non-payment can seriously destabilise a scheme and prejudice the collective interests and investments of all owners. The adjudicator also commented that, although levy debts are commonly ordered to be paid within a short time, fairness and the interests of justice in the aftermath of the Covid-19 pandemic justified allowing a longer repayment period in this matter. These observations were supportive reasoning rather than strictly necessary to the finding of liability.

This adjudication illustrates the CSOS's role as a statutory forum for the recovery of arrear levies in sectional title schemes. It affirms that bodies corporate may invoke section 39(1)(e) of the CSOS Act to obtain enforceable payment orders against defaulting owners, including interest on overdue amounts where authorised by the management rules and trustee resolution. The decision is also significant for underscoring the central importance of levy collection to the viability of community schemes and for demonstrating that CSOS may craft equitable payment arrangements, such as instalment orders, while still enforcing the obligation to pay.