Philip Charl du Preez obo Kogelpark Homeowners' Association v Joe & Lente Loubser

The applicant, Philip Charl du Preez, acting as managing agent on behalf of Kogelpark Homeowners' Association (KHOA), brought a CSOS application against Joe and Lente Loubser, co-owners of Unit 6 in a retirement lifestyle estate in Kleinmond. KHOA is a community scheme governed by its constitution and conduct rules, and falls within the Community Schemes Ombud Service Act 9 of 2011. The scheme provides meals to residents through an appointed catering contractor. To ensure the viability of the catering service in a relatively small scheme, members resolved at the AGM of 25 April 2017 that each resident must buy at least four meal tickets per month; this was confirmed by the executive committee and incorporated into the conduct rules and the catering agreement. The respondents paid the meal contributions from July 2021 to August 2022 but thereafter failed to pay monthly amounts of R368 from September 2022 to March 2023, resulting in arrears of R2 688.17 inclusive of interest. They admitted refusing to use and pay for the compulsory meal service, contending that the catering arrangement was imposed unconstitutionally, that the contractor exploited members, that a new contract had been signed without proper member approval, and that a discrepancy between the English and Afrikaans versions of the conduct rules meant the obligation was not compulsory in Afrikaans. The applicant sought an order under s 39(1)(e) of the CSOS Act for payment of the arrear amount.

• Whether CSOS had jurisdiction under sections 38 and 39(1)(e) of the CSOS Act to determine the dispute and order payment of the arrear contribution.
• Whether the respondents were contractually bound by the KHOA constitution and conduct rules requiring residents to purchase at least four meal tickets per month.
• Whether the discrepancy between the English and Afrikaans versions of the conduct rules negated or weakened the compulsory nature of the meal contribution.
• Whether the compulsory meal-ticket contribution was fair and reasonable in the circumstances of the retirement scheme.
• Whether the respondents were liable to pay the claimed amount of R2 688.17 inclusive of interest.

The application was granted. The respondents were ordered to pay R2 688.17 to the executive committee of the scheme or the managing agents on or before 30 September 2023. No order as to costs was made.

Members of a homeowners' association/community scheme who acquire property in the scheme are contractually bound by its constitution and conduct rules. Where the scheme's governance documents authorize the executive committee to provide communal services and impose related contributions, and where a requirement such as the purchase of a minimum number of meal tickets has been adopted as part of those governance arrangements, a member who refuses to pay is liable for the contribution. A discrepancy in wording between language versions of subsidiary rules does not defeat liability where the constitution and overall governance framework clearly authorize the obligation and the requirement is fair and reasonable in the circumstances. CSOS may, under s 39(1)(e), order payment of such arrear contributions.

The adjudicator observed that the compulsory four-meal requirement was just and reasonable given the need to ensure the viability of the catering service in a small retirement scheme. The order also noted, by reference to Wilds Homeowners Association v Van Eeden, that courts should hesitate to rewrite bargains struck among scheme members and should generally leave changes to internal governance arrangements to the association's prescribed resolution procedures. In addition, the adjudicator commented that cost orders are generally not made in s 54 adjudications unless circumstances under s 53 justify them.

This adjudication is significant in South African community schemes law because it affirms that homeowners in a residential estate or retirement scheme are contractually bound by the scheme's constitution and conduct rules, including financial obligations designed to sustain communal services. It also illustrates the CSOS adjudicator's approach to enforcing scheme governance documents, the limited statutory remit of CSOS under s 39 of the CSOS Act, and the reluctance to interfere with democratically adopted internal arrangements of homeowners' associations unless properly challenged through the scheme's own processes or on a legal basis. The matter is particularly relevant for retirement schemes where shared services such as catering form part of the scheme's operational structure.