The Directors of Savanna Mews Home Owners Association v S. & M. Chitsatso

The applicant, the Directors of Savanna Mews Home Owners Association, brought an application under section 38 of the Community Schemes Ombud Service Act 9 of 2011 seeking relief under section 39(1)(e) for payment of arrear levies. The respondents, S. & M. Chitsatso, are the owners of Unit 102 in the Savanna Mews scheme. The HOA alleged that the respondents had failed to pay levy contributions from 1 August 2022 and that, according to the account statement and HOA authority resolution, an amount of R5 627,96 was outstanding, inclusive of interest. The matter proceeded on written submissions. Although the adjudicator recorded that the respondents failed to respond by the deadline, the order also notes a response in which the respondent stated that there had been a misunderstanding because he had stopped the account when moving to Europe, while his wife, also an owner, had been paying using the same reference; he indicated that he would arrange payment and did not dispute liability. The AGM minutes of 12 December 2022 provided for interest at 2% compounded monthly on arrears after the 7th day of the month.

• Whether the applicant HOA was entitled under section 39(1)(e) of the CSOS Act to an order compelling payment of arrear levies.
• Whether the respondents, as owners within the homeowners association, were liable to pay levies and interest in terms of the HOA's rules and AGM resolutions.
• Whether the evidence before the adjudicator established, on a balance of probabilities, that R5 627,96 was due and payable.

The application was upheld. The respondents were directed to pay the applicant R5 627,96, inclusive of interest, within 2 months in two equal instalments of R2 813,98 commencing on 1 September 2023 and ending on 1 October 2023. The order did not affect the respondents' ongoing obligation to pay regular monthly levies and ancillary charges. If the respondents defaulted on one instalment, the full outstanding amount would become immediately due and payable. No order as to costs was made.

An owners association within a community scheme is entitled, under section 39(1)(e) of the CSOS Act, to an adjudication order compelling an owner to pay outstanding levies where the evidence shows that the levies were validly imposed under the scheme's rules or resolutions and remain unpaid. The obligation to pay levies in a homeowners association is contractual in nature and binding on owners who acquired property in the scheme.

The adjudicator referred generally to evidentiary principles such as relevance, credibility and proof on a balance of probabilities, and observed that the respondent appeared willing to pay the outstanding levies. The order also recorded the statutory right of appeal under section 57 of the CSOS Act to the High Court on a question of law only. These observations were ancillary to the core determination of liability for levies.

The matter is a straightforward but useful CSOS levy-recovery decision confirming that a homeowners association may use section 39(1)(e) of the CSOS Act to recover unpaid levies from owners. It reinforces the South African principle that membership of a homeowners association and ownership within the scheme create contractual obligations enforceable according to the scheme's rules and resolutions, including interest provisions properly adopted by the association.