Parklands Homeowners Association v AM Molale

The applicant, Parklands Homeowners Association, is a non-profit company and community scheme governed by its Memorandum of Incorporation and conduct rules. The respondent, AM Molale, is the registered owner of unit 13, Erf 2184, within the scheme. The HOA alleged that despite repeated letters of demand, the respondent failed to pay monthly levies and ancillary charges, including CSOS levies, owing under the scheme rules and governance documents. The applicant sought payment of arrears in the amount of R8 512.80 as at 16 February 2024, supported by a levy statement and resolutions authorising the charges. The respondent did not file a substantive defence, but undertook to pay and provide proof of payment, without specifying the amount. The adjudicator requested further information under section 51 of the CSOS Act, and the applicant submitted the latest levy statement.

• Whether the respondent, as owner and member of the HOA, was liable for the outstanding levies and ancillary charges claimed by the applicant.
• Whether the applicant had proved on a balance of probabilities that the amount of R8 512.80 was due and payable.
• Whether an order should be granted under section 39(1)(e) of the Community Schemes Ombud Service Act 9 of 2011 for payment of the arrear contributions and related amounts.
• Whether the payment should be structured in instalments and on what terms.

The application succeeded. The adjudicator declared that the respondent is indebted to the applicant in the amount of R8 512.80 in respect of levies and ancillary charges as of 19 February 2024. The respondent was ordered to pay this amount in six equal monthly instalments of R1 418.80, the first payment being due on or before 1 March 2024 and the remaining five instalments on the first day of each succeeding month. No interest would accrue during the six-month payment period. The order did not affect the respondent’s obligation to continue paying regular monthly levies and ancillary charges. If the respondent defaulted on any instalment, the full outstanding balance would become immediately due and payable. There was no order as to costs.

An owner in a homeowners association is bound by the scheme’s governance documents and rules, including obligations to pay levies and ancillary charges. Where the HOA proves by documentary evidence, on a balance of probabilities, that arrear levies are due, an adjudicator under section 39(1)(e) of the CSOS Act may order payment of those amounts. The contractual nature of the relationship between the HOA and its members means that levy obligations are enforceable against owners who purchased into the scheme.

The adjudicator observed that levies are the 'lifeblood' of a homeowners association and that defaulting owners are effectively subsidised by owners who pay timeously. The adjudicator also commented that the directors of an HOA cannot properly perform their functions without the funds collected from owners. These remarks explain the practical importance of levy enforcement but were not strictly necessary beyond supporting the payment order.

The decision illustrates the CSOS adjudication process for recovery of unpaid levies in homeowners associations and confirms the enforceability of HOA rules and levy obligations as part of the contractual relationship between the association and owners. It reinforces that levies are fundamental to the operation of community schemes and that CSOS may grant practical financial relief, including structured repayment terms, under section 39(1)(e) of the CSOS Act.