The Executive Committee of Bushman Sands Homeowners Association NPC v Anton Nel

Bushman Sands Homeowners Association NPC (BSHOA), a non-profit homeowners association operating a community scheme in Alicedale, Eastern Cape, brought an application under section 38 read with section 39(1)(e) of the Community Schemes Ombud Service Act 9 of 2011 (CSOS Act) against Anton Nel, the registered owner of Erf 1669 in the scheme. As an owner, the respondent was a member of the association in terms of the scheme's Memorandum of Incorporation (MOI). The applicant alleged that the respondent had failed to make regular levy payments due in terms of the MOI, and claimed arrear levies of R6 788.07. A contribution statement was submitted in support of the claim. The matter first went through the CSOS process; after conciliation failed, a certificate of non-resolution dated 20 November 2023 was issued and the matter was referred to adjudication. The respondent did not respond to the allegations despite being directed to do so under section 43 of the CSOS Act and being given a further opportunity to respond.

• Whether the dispute fell within the jurisdiction of the CSOS under sections 38 and 39 of the CSOS Act.
• Whether the respondent, as owner and member of the homeowners association, was contractually and legally obliged under the MOI to pay levy contributions.
• Whether the applicant had proved on a balance of probabilities that arrear levies in the amount of R6 788.07 were due and payable.
• Whether a costs order should be granted in the circumstances.

The application was granted. The respondent was ordered to pay arrear levy contributions of R6 788.07 to the applicant in full on or before 30 April 2024. No order as to costs was made.

A homeowners association that qualifies as a community scheme under the CSOS Act may obtain relief under section 39(1)(e) for unpaid levies where the owner-member is bound by the scheme's MOI or rules to pay contributions and the applicant proves the arrears on a balance of probabilities. The MOI/rules create a contractual relationship between the association and its members, and amounts due by way of levies are recoverable debts owed to the association.

The adjudicator remarked that non-payment of levies can seriously destabilise a scheme and that levies are the 'lifeblood' of shared living schemes because they fund maintenance, insurance, security, repairs and other communal obligations. The adjudicator also observed generally that costs orders are not ordinarily made in section 54 determinations, and are more commonly associated with dismissals under section 53 in frivolous, vexatious or non-compliant matters.

This adjudication reinforces the enforceability of levy obligations in homeowners associations and other community schemes under the CSOS Act. It confirms that CSOS adjudication is an available and effective statutory mechanism for the recovery of unpaid levy contributions, and that a scheme's MOI/rules create binding contractual obligations on members. The order also underscores the broader policy importance of levy enforcement for the financial sustainability of community schemes.