Theresa Ann Thompson v Hillside View Body Corporate and Anger Property Management

The applicant, Theresa Ann Thompson, is the owner of unit 1 in Hillside View Body Corporate in Randburg. After she purchased and took transfer of the unit, the trustees of the body corporate imposed a special levy on all owners to address a large historical debt allegedly owed to Eskom and City Power/City of Johannesburg, said to exceed R6 million. Thompson contended that this debt had arisen before she became an owner, that it had not been disclosed to her, the estate agent, bond originator, or transferring attorneys had not alerted her to the impending special levy, and that levy clearance certificates had been issued indicating no debt was owed. She sought an order exempting her from liability for the special levy. The first respondent body corporate filed no submissions. The second respondent managing agent stated that the trustees had agreed to raise a special levy and increase levies because the body corporate could not meet its commitments due to the municipal debt and alleged incorrect billing by the City of Johannesburg.

• Whether a special levy imposed after transfer can validly require a current owner to contribute toward a historical municipal/electricity debt incurred before that owner became a member of the body corporate.
• Whether the special levy passed on 15 September 2023 was unreasonable within the meaning of section 39(1)(c) of the CSOS Act.
• Whether the resolution imposing the special levy should be declared invalid under section 39(4)(c) of the CSOS Act.
• Whether a purchaser in a sectional title scheme assumes liability for undisclosed historical debts of a seller or body corporate absent agreement or lawful basis.
• Whether the adjudicator could invalidate the levy despite procedural validity of the trustees' resolution.

The relief sought by the applicant was granted. The adjudicator ordered that the special levy dated 15 September 2023 is invalid from the date of inception. No order as to costs was made.

A body corporate's special levy, though procedurally validly resolved, may be declared unreasonable and invalid under sections 39(1)(c) and 39(4)(c) of the CSOS Act where it is used to saddle a current owner with undisclosed historical debt incurred before that owner acquired the unit, absent agreement or a legal basis making the purchaser liable for that prior debt. A purchaser does not automatically inherit a seller's or prior occupier's historical electricity or municipal debt merely by becoming an owner in the scheme.

The adjudicator observed that the body corporate is generally entitled to self-regulate and that owners who purchase into a sectional title scheme are ordinarily bound by its rules and resolutions. The adjudicator also remarked that the debt ought to have been discussed at a general meeting and that it would have been more understandable if a special levy had been raised for maintenance or a legal challenge to incorrect billing rather than directly for historical consumption debt. Additional comments questioning how the units were billed and how such a large debt accrued without a recovery plan were not necessary to the dispositive finding.

This decision is significant in community schemes jurisprudence because it distinguishes between the ordinary incidence of ownership, including liability for valid current levies, and the impermissible imposition of undisclosed historical debt on a purchaser through a later special levy. It underscores that even where trustees act within their formal powers, a special levy may be set aside under the CSOS Act if it is substantively unreasonable. The decision also highlights the importance of levy clearance certificates and disclosure in sectional title transfers, and confirms the reviewability of body corporate decisions for objective unreasonableness.