The applicant, Salashona Shumugan, is the registered owner of Unit 2 in the Lion Sands Body Corporate scheme in Mooikloof Ridge, Pretoria. She brought an application to the Community Schemes Ombud Service (CSOS) under section 38 of the Community Schemes Ombud Service Act 9 of 2011 seeking reimbursement of all fees charged to her levy account. Her complaint was that when her debit order for levies was dishonoured, she was charged a debit order rejection fee and a commission or debt collection fee, even though she later paid the levies. She contended that these charges were unfair, inadequately explained, and not reflected clearly on the debit order form, and she also argued that FNB business accounts do not charge such fees. The respondent body corporate, through its trustees and managing agent Pretor, opposed the application. It stated that levies are payable in advance on or before the 1st of each month, with a grace period until the 7th, and that accounts unpaid by the 15th trigger debt collection action and charges in accordance with the Debt Collectors Act tariff and the scheme’s debt collection process. The respondent further relied on the applicant’s signed debit order mandate, which provided that each dishonoured debit order instruction would attract an administrative fee, and on a trustees’ resolution authorising interest on arrears at 1.5% per month (18% per annum).
The application was dismissed in its entirety in terms of section 53(1)(a) of the CSOS Act as misconceived and without substance. No order as to costs was made.
Where a unit owner has signed a debit order mandate authorising an administrative fee for each dishonoured instruction, and the scheme or its managing agent is lawfully entitled under applicable legislation, resolutions, and rules to recover debt collection charges and interest on arrear levies, those charges are enforceable. An applicant seeking reimbursement through CSOS bears the onus of proving on a balance of probabilities that the charges were unlawful or improperly levied; absent such proof, the claim must be dismissed.
The adjudicator observed that the applicant’s apparent late payment pattern could have resulted from a misunderstanding regarding when levies become due, namely that levies are payable in advance on the first day of each month. The adjudicator also remarked that what the applicant’s bank charges or does not charge is unrelated to the respondent’s entitlement to charge fees and is therefore irrelevant to the dispute. No extensive broader obiter on legal policy was provided.
The decision is significant in the community schemes context because it confirms that owners in sectional title or body corporate schemes may be held liable for administrative fees on dishonoured debit orders, debt collection charges, and interest on arrears where these are supported by a signed mandate, lawful debt collection arrangements, and properly adopted trustee resolutions or management rules. It also illustrates the evidentiary burden on applicants in CSOS proceedings and shows that general complaints of unfairness will not succeed where the charges are contractually and statutorily authorised.