Mwembo Emmanual Lubangi v Gerian Properties CC

The applicant, Mwembo Emmanual Lubangi, is the owner of unit 1 in the Tessa Villa sectional title scheme and therefore a member of the body corporate. He brought an application under section 38 read with section 39(1)(c) of the Community Schemes Ombud Service Act 9 of 2011 seeking relief concerning financial issues, namely a declaration that levy contributions and related interest charged to him were incorrectly determined or unreasonable. The applicant stated that his tenants were unable to pay rent during the COVID-19 lockdown period, which caused him to fall into arrears on levies and utility charges. He asked that the arrear levies and interest accumulated during the lockdown be reconsidered, also referring to alleged poor service delivery and poor workmanship regarding pavement services in the scheme. The respondent cited was Gerian Properties CC, the managing agent of Tessa Villa Body Corporate, although the adjudicator noted that the body corporate itself was not cited and that the managing agent was not the entity responsible for determining levies. The respondent opposed the relief, stating that the scheme still had ongoing administrative and operational costs, that no service providers had granted the scheme any pandemic relief that could be passed on to owners, that the applicant remained in arrears despite opportunities to make payment arrangements, and that while there had been limited maintenance due to budget constraints caused by levy non-payment, the respondent was willing to negotiate possible removal of interest charged.

• Whether the levies and interest charged on the applicant's arrear account during the COVID-19 lockdown period were incorrectly determined or unreasonable under section 39(1)(c) of the CSOS Act.
• Whether the applicant was entitled to adjustment or reconsideration of levies and interest because his tenants could not pay rent during lockdown and because of alleged poor maintenance or service delivery in the scheme.
• Whether the application was competent against the cited respondent, being the managing agent rather than the body corporate or trustees responsible for determining levies.
• Whether the application was without substance or misconceived and therefore liable to dismissal under section 53(1)(a) of the CSOS Act.

The application was dismissed in terms of section 53(1)(a) of the CSOS Act as being without substance. Each party was ordered to bear its own costs.

An applicant seeking relief under section 39(1)(c) of the CSOS Act must show that a levy contribution, or the manner of its payment, was incorrectly determined or objectively unreasonable. Personal hardship, including loss of rental income during the COVID-19 lockdown, does not by itself render scheme levies or interest on arrears unreasonable. In a community scheme, levies are fundamental to the scheme's operation and may not be withheld because an owner disputes maintenance quality or the financial wisdom of expenditure. Interest on overdue levies may be charged where authorized under the applicable management rules and trustee resolution. A levy dispute is also defective where brought against a managing agent who does not possess the authority to determine levies.

The adjudicator made broader observations that levies are the 'lifeblood' of shared living schemes and that non-payment can seriously destabilise a scheme and prejudice all owners. The adjudicator also commented that the application, while misconceived, was not frivolous or vexatious, and for that reason a punitive or compensatory costs order was not appropriate. The discussion of general standards of reasonableness derived from Bato Star and the reference to capricious decision-making in Bushwillow Park Home Owners v Fernandes provided contextual guidance rather than a detailed determinative test on the specific facts.

This decision is significant within South African community schemes jurisprudence because it reinforces the principle that owners in sectional title and similar schemes remain liable for levies notwithstanding personal financial hardship or dissatisfaction with service delivery. It underscores that levies are essential to the functioning of a scheme and that arrear interest may lawfully be charged in accordance with the management rules and applicable legislation. The order also highlights an important procedural point: the correct respondent in levy disputes is ordinarily the body corporate or trustees, not merely the managing agent. Finally, it illustrates the CSOS adjudicator's power under section 53 to dismiss applications that are misconceived or without substance after investigation.