Prospect Place Body Corporate v Johan Kemp on behalf of the Palo Trust (IT3341/2008)

The applicant, Prospect Place Body Corporate, brought a dispute-resolution application under section 38 of the Community Schemes Ombud Service Act 9 of 2011 against Johan Kemp in his capacity as trustee of the Palo Trust, the owner of unit 505 in the Prospect Place sectional title scheme in Johannesburg. The body corporate alleged that the respondent had fallen into arrears with levy payments and sought payment of the outstanding amount under section 39(1)(e) of the CSOS Act. It also sought, if the unit was tenanted, an order under section 39(1)(f) directing the tenant to pay rental directly to the body corporate. The respondent admitted being in arrears, explaining that the trust had struggled to collect rental income since about October 2020, and proposed paying current levies plus the arrears in instalments. A certificate of non-resolution had been issued after conciliation failed, and the matter proceeded to adjudication on the papers.

• Whether the respondent, as owner of a unit in the sectional title scheme, was liable for arrear levies claimed by the body corporate.
• Whether the applicant had established entitlement to an order under section 39(1)(e) of the CSOS Act for payment of the arrear amount.
• Whether an order under section 39(1)(f) directing a tenant to pay rental directly to the body corporate could be granted where no tenant had been cited or identified.
• What payment arrangement, if any, should be ordered in respect of the admitted arrears.

The application for payment of arrear levies was granted. The respondent was declared liable to the applicant in the amount of R46 960.89 and ordered to pay the debt in 7 monthly instalments of R6 708.70 commencing on 1 March 2024 and on the first day of each subsequent month until paid in full. If the respondent failed to pay any instalment on due date, the full outstanding balance would become payable. The request for an order against a tenant under section 39(1)(f) was not granted. No order as to costs was made.

A unit owner in a sectional title scheme is liable to the body corporate for levies and contributions arising from ownership, and a body corporate is entitled to relief under section 39(1)(e) of the CSOS Act where arrears are established on a balance of probabilities, especially where the arrears are not disputed. Further, an order under section 39(1)(f) directing a tenant to pay rental to the body corporate cannot be granted where the tenant has not been cited or afforded a hearing, because such relief would be unenforceable and contrary to the audi alteram partem principle.

The adjudicator noted generally that evidence must be assessed for relevance, credibility and probabilities on a balance of probabilities. The order also reflected a pragmatic willingness to allow repayment by instalments in light of the respondent's circumstances, although the core legal entitlement was immediate liability for the arrears. No fuller obiter remarks beyond these procedural and practical observations appear from the text.

The decision illustrates the CSOS adjudication process for levy-recovery disputes in community schemes and reaffirms that levy liability is an incident of ownership in sectional title schemes. It also underscores an important procedural principle in CSOS matters: relief affecting a tenant under section 39(1)(f) cannot be granted unless the tenant is properly identified and cited, so that the audi alteram partem rule is observed.