Nicolas Sardianos v Solver Property Services

The applicant, Nicolas Sardianos, was the owner/occupier of Unit 13 in Lallybroch Estate, Bryanston. He brought an application to the Community Schemes Ombud Service (CSOS) under section 39(1)(c) of the Community Schemes Ombud Service Act 9 of 2011, seeking relief regarding levies charged in the development. He complained that only a few homes in the estate were occupied, some units were still under construction, there was allegedly little or no maintenance, roads were incomplete, and security fencing had collapsed or was non-existent. He contended that levies should only become payable once all homeowners were in the estate, and that in the meantime owners should pay only for electricity and water consumption until the development was completed. In support, he relied on his Offer to Purchase, photographs showing an incomplete building site, and a proposed budget. The cited respondent, Solver Property Services, was the managing agent. No response was filed by the respondent. The adjudicator found, however, that the body corporate had apparently not yet been established because transfer of units had not yet taken place, and that the relationship at that stage was primarily contractual between the developer and purchasers.

• Whether the levy or contribution complained of was incorrectly determined or unreasonable for purposes of section 39(1)(c) of the CSOS Act.
• Whether CSOS had jurisdiction to grant relief where the body corporate had apparently not yet been established and transfer had not yet taken place.
• Whether, prior to establishment of a body corporate, disputes about payment obligations under an offer to purchase are contractual disputes falling outside CSOS's mandate.
• Whether the managing agent was the correct respondent, or whether the developer was the proper party to be cited.
• Whether a developer may lawfully collect revenue from early purchasers before establishment of the body corporate to fund utilities and services in the development.

The application for relief under section 39(1)(c) of the CSOS Act was refused. The order took effect immediately upon electronic service on the parties, and each party was ordered to pay its own costs.

Before a body corporate is established in terms of section 2(1) of the STSMA, disputes between a developer and a purchaser concerning liability to pay levies or similar charges under an offer to purchase are contractual in nature and fall outside CSOS's mandate under section 39(1)(c) of the CSOS Act. In addition, an application may properly be refused where the cited respondent is not the party legally responsible for the impugned conduct, such as where a managing agent is cited instead of the developer.

The adjudicator observed that there is nothing inherently wrong with a developer collecting revenue from early purchasers before establishment of the body corporate to finance utilities and services. The adjudicator also remarked that if any units had already been transferred, the applicant could consider a future CSOS application to compel the developer to convene the inaugural general meeting, where levy computation and related concerns could be discussed. The discussion of the developer's duty under sections 2(8)(a) and 2(10) of the STSMA to convene a meeting after establishment of the body corporate was also ancillary to the refusal of the present application.

This decision is significant in community schemes and sectional title law because it draws a clear distinction between disputes that fall within CSOS's statutory jurisdiction and disputes that remain purely contractual between a developer and purchasers before a body corporate is established. It confirms that levy-related complaints under section 39(1)(c) presuppose a community scheme contribution capable of CSOS intervention, and that where ownership has not yet passed by registration, the purchaser's remedies may lie in contract rather than before CSOS. The ruling also highlights the importance of citing the correct party, especially distinguishing the developer from the managing agent.