The Directors of Willanté Estate HOA v Mavis Hlekani Ngobeni

The applicant, the Directors of Willanté Estate Homeowners Association, a non-profit company and community scheme under the Community Schemes Ombud Service Act 9 of 2011 (CSOS Act), brought an application against the respondent, Mavis Hlekani Ngobeni, the registered owner of unit 10/Erf 172 in the estate. The dispute concerned the respondent’s non-payment and underpayment of monthly levies and ancillary charges, including CSOS levies. The applicant alleged that despite written demands and other internal attempts to secure payment, the respondent remained in arrears. The applicant relied on the scheme’s conduct rules, which required levies to be paid monthly in advance and permitted administrative penalties and interest for late payment, and on a directors’ resolution dated 8 June 2023 providing for interest at 2% per month on arrears. The respondent did not dispute being in financial difficulty, but explained that her husband had been unemployed since the COVID-19 pandemic and that she was under debt review. She contended that interest and additional charges made it difficult to settle the arrears. The adjudicator determined the matter on the papers and found that, as at 28 August 2023, the respondent owed R5 814.43.

• Whether the respondent, as an owner in the HOA, was liable to pay the outstanding levies and ancillary amounts claimed by the applicant.
• Whether the applicant had proved the respondent’s indebtedness on a balance of probabilities.
• Whether the rules of the HOA and its governance documents contractually bound the respondent to pay levies and related charges.
• What relief was appropriate under section 39(1)(e) of the CSOS Act in relation to the payment of contributions or other amounts.
• Whether payment terms should be structured by instalments and whether interest should continue to accrue on the outstanding amount.

The application succeeded. Relief under section 39(1)(e) of the CSOS Act was granted. The respondent was declared indebted to the applicant in the amount of R5 814.43 as at 28 August 2023 in respect of levies and ancillary charges, including CSOS levies. She was ordered to pay that amount in five equal monthly instalments of R1 162.89, commencing on 1 April 2024, with the remaining instalments payable on the last day of each succeeding month. The order did not affect her ongoing obligation to pay regular monthly levies and ancillary charges. No interest was to accrue on the outstanding amount, and there was no order as to costs. If the respondent defaulted on any instalment, the full amount would become immediately due and payable.

An owner in a homeowners’ association is contractually bound by the scheme’s governance documents and conduct rules, including provisions requiring payment of monthly levies and ancillary charges. In a CSOS levy-recovery application under section 39(1)(e), where the association proves the indebtedness on a balance of probabilities, the adjudicator may grant an order compelling payment of the arrears. Financial hardship does not excuse a member from the obligation to pay levies due to the community scheme.

The adjudicator observed that levies are the 'lifeblood' of an HOA and that defaulting owners are effectively subsidised by other owners who pay conscientiously. The adjudicator also made a discretionary, non-essential observation through the order structure that fairness could be achieved by permitting payment in instalments and by directing that no further interest should accrue on the adjudicated amount.

The matter illustrates the CSOS adjudication process for levy recovery in community schemes and reaffirms that owners in homeowners’ associations are bound by the scheme’s rules and remain liable for levies notwithstanding personal financial hardship. It is significant as a practical example of the enforcement of HOA levy obligations through section 39(1)(e) of the CSOS Act, while also showing that an adjudicator may craft equitable payment arrangements, including instalments and suspension of further interest, without negating the underlying debt.