The Executive Committee of Birdwood Estate HOA v Mahlatsi Moses Thulisi

The applicant, the Executive Committee/Board of Directors of Birdwood Estate Homeowners Association, brought a dispute-resolution application under section 38 of the Community Schemes Ombud Service Act 9 of 2011 (CSOS Act) against the respondent, Mahlatsi Moses Thulisi, the registered owner of unit 105 in Birdwood Estate, Brits, North West. The HOA alleged that the respondent had failed to pay monthly levies and ancillary charges, including monthly CSOS levies, and was indebted in the amount of R18 893.71 as at 1 January 2024. The HOA stated that it had attempted to recover the arrears through discussions and letters of demand, without success, and that internal remedies had been exhausted. The matter first went to conciliation on 13 December 2023, but was not resolved, whereafter a certificate of non-resolution was issued and the dispute was referred to adjudication. The respondent did not dispute liability in substance, but indicated a willingness to enter into a payment arrangement, while stating that the applicant was only willing to accept payment of R3 000 per month excluding current monthly levies.

• Whether the CSOS adjudicator had jurisdiction under sections 38 and 39(1)(e) of the CSOS Act to determine the dispute and grant relief for payment of arrear levies and ancillary amounts.
• Whether the respondent, as owner and member of the HOA, was legally obliged under the scheme's governance documents and rules to pay levies and ancillary charges.
• Whether the applicant had proved on a balance of probabilities that the respondent was indebted in the sum of R18 893.71.
• Whether it was appropriate to order payment of the arrears by instalments, and on what terms.

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 R18 893.71 in respect of levies and ancillary amounts for unit 105 as at 1 January 2024. The respondent was ordered to pay that amount in 9 equal monthly instalments of R2 099.30, commencing on 1 April 2024, with the remaining eight instalments payable on the first day of each succeeding month. The respondent was also ordered to continue paying the regular monthly levies and ancillary charges. No interest would accrue on the outstanding arrears during the instalment period, but if the respondent defaulted on any instalment, the full outstanding balance would become immediately due and payable. No order as to costs was made.

An owner in a homeowners' association/community scheme is bound by the scheme's memorandum of incorporation and conduct rules, including obligations to pay monthly levies and ancillary charges. Where the association proves on a balance of probabilities that such amounts are due, CSOS may grant relief under section 39(1)(e) of the CSOS Act ordering payment of the arrears. The contractual nature of HOA membership means levy obligations cannot be withheld contrary to the scheme rules.

The adjudicator's remarks that levies are the 'lifeblood' of an HOA, that directors cannot perform their duties without owners' contributions, and that defaulting owners are effectively subsidised by compliant owners are persuasive observations explaining the policy rationale for strict enforcement of levy obligations, but are not themselves necessary to the operative order. The decision to suspend further interest accrual during the instalment period is also a case-management accommodation rather than a broader statement of principle.

This adjudication illustrates the CSOS's role in enforcing levy obligations within community schemes and confirms that arrear levies and related charges in homeowners' associations are recoverable through section 39(1)(e) of the CSOS Act. It also reflects the established South African principle that HOA rules are contractually binding on owners who choose to buy within an estate, and that levy obligations are essential to the functioning and financial sustainability of community schemes. The decision is practically significant in showing that CSOS may grant structured instalment relief while still enforcing the underlying debt.