The Directors of San Firenzo Home Owners Association v K. Anderson

The applicant, The Directors of San Firenzo Home Owners Association, brought an application under section 38 read with section 39(1)(e) of the Community Schemes Ombud Service Act 9 of 2011 for payment of arrear levies allegedly owed by the respondent, K. Anderson, the owner of a unit/property in the scheme. The applicant contended that the respondent had failed to pay levy contributions and relied on a statement reflecting an outstanding amount of R3 429,50 calculated up to 1 October 2023. The HOA’s conduct rules, particularly rule 7.5, obliged all owners to pay monthly levies determined by the directors, with interest accruing on overdue amounts. The respondent did not file substantive written submissions in response by the deadline set by the adjudicator, although the order notes that the respondent appeared to dispute liability and sought dismissal of the application. The matter was adjudicated on the papers after a certificate of non-resolution had been issued following failed conciliation.

• Whether the respondent, as an owner and member of the homeowners association, was liable to pay the levies claimed by the applicant.
• Whether the applicant had established on a balance of probabilities that arrear levies in the amount of R3 429,50 were due and payable.
• Whether section 39(1)(e) of the CSOS Act empowered the adjudicator to order payment of the arrear levies.
• Whether legal costs could be recovered from the respondent in the absence of agreement, taxation, or an authorising court/adjudicative order.

The application was upheld. The respondent was ordered to pay the applicant R3 429,50 in outstanding levies, inclusive of interest at the rate determined by the directors, in two equal instalments of R1 714,75 due on 1 November 2023 and 1 December 2023. The respondent was ordered to pay levies and interest, but not legal costs unless there was member consent or authority of a judgment or order and taxation by the taxing master. If the respondent failed to make the payments, the full amount would become immediately due and payable. No order as to costs was made.

An owner who purchases property within a homeowners association scheme becomes contractually bound by the scheme’s rules, including rules obliging payment of levies determined by the association. Where the applicant proves on a balance of probabilities, through account statements and scheme rules, that arrear levies are due, an adjudicator may under section 39(1)(e) of the CSOS Act order payment of those levies. Legal costs, however, are not recoverable as part of the owner’s indebtedness unless they have been agreed to, taxed, or authorised by a competent judgment or order.

The adjudicator made broader remarks that directors of an HOA must ensure strict adherence to scheme rules so that the financial obligations of the association are met. The order also included commentary, by reference to PMR 25(5) and Marsh Rose, on the impropriety of loading untaxed or unauthorised legal charges onto an owner’s account. These observations were supplementary because the central dispute concerned arrear levies rather than a quantified, contested legal-costs claim. There are also some internal inconsistencies in the order, including references to the applicant recovering levies from the respondent and a stray reference to 'respondents are jointly' despite only one respondent being cited.

The decision illustrates the CSOS’s role in enforcing levy obligations within community schemes and confirms that HOA members are bound by the scheme’s rules on a contractual basis. It also reflects the growing use of section 39(1)(e) of the CSOS Act to secure payment of arrear contributions. Importantly, the order distinguishes between recoverable levies and legal costs, echoing South African authority that legal costs may not simply be debited to an owner’s account unless agreed, taxed, or otherwise lawfully authorised.