Trustees of Squirrel on Oak Body Corporate v Never Happy (Pty) Ltd

The applicant, the Trustees of Squirrel on Oak Body Corporate, brought a dispute-resolution application under section 38 of the Community Schemes Ombud Service Act 9 of 2011 (CSOS Act) against the respondent, Never Happy (Pty) Ltd, the owner of units 6 and 2 in the Squirrel on Oak sectional title scheme in Kenilworth, Cape Town. The body corporate alleged that the respondent was in arrears with levies in the amounts of R56 090.39 for unit 6 and R58 372.66 for unit 2 as at 30 August 2023. The respondent did not deny the arrears but contended that it was withholding payment because of unresolved maintenance and water-leak problems, particularly in unit 6, and stated that the levy amounts had been paid into its attorneys' trust account. The applicant sought an order for payment of the arrear levies under section 39(1)(e) of the CSOS Act and a further order under section 39(1)(f) directing tenants of the units to pay rental income to the body corporate. The respondent, in turn, asked for orders compelling the body corporate to undertake in writing to address the leak and to use reputable contractors.

• Whether the respondent, as owner of units in the sectional title scheme, was liable to pay the outstanding levies claimed by the body corporate.
• Whether the respondent could lawfully withhold payment of levies pending the body corporate's resolution of maintenance and water-leak complaints.
• Whether payment of the disputed levy amounts into the respondent's attorneys' trust account constituted valid payment discharging the levy debt.
• Whether the adjudicator could grant relief under section 39(1)(f) of the CSOS Act directing tenants to pay rentals to the body corporate in the absence of proof of tenants, joinder, or lease agreements.
• Whether the respondent's maintenance complaints could be determined in these proceedings without a proper referral of that dispute.

The application succeeded in part. The adjudicator ordered that the respondent is indebted to the applicant in the amounts of R56 090.39 for unit 6 and R58 372.66 for unit 2, and directed the respondent to pay those arrear levies within 14 days of receipt of the order. No further interest was to accrue during that 14-day payment period. The order did not affect the respondent's obligation to continue paying ordinary monthly levies and ancillary charges. If the respondent defaulted on any one payment ordered, the full amount would become immediately due and payable. The applicant's claim for relief under section 39(1)(f) directing tenants to pay rentals to the body corporate was dismissed. There was no order as to costs.

In a sectional title scheme, an owner remains liable to pay levies validly raised by the body corporate, and that liability may be enforced through an order under section 39(1)(e) of the CSOS Act. An owner cannot suspend or set off that levy obligation against unresolved maintenance complaints unless such disputes are properly and separately pursued. Payment into the owner's attorney's trust account does not discharge the levy debt owed to the body corporate. Relief under section 39(1)(f) directing tenants to pay rentals to the body corporate cannot be granted where there is no proof of tenants or lease agreements and the affected tenants have not been joined or otherwise afforded a hearing.

The adjudicator observed that if the respondent had a maintenance dispute against the applicant, it should complete and submit a separate referral form so that the issue could be properly determined. The adjudicator also referred to the possibility of charging interest under PMR 21(3)(c) and cited Body Corporate of Central Park v Makhalele Mosa Case No. A3064/2021 on when levy liability accrues, although the operative order mainly suspended further interest during the 14-day payment period rather than making a substantive ruling on ongoing interest entitlement. The remarks on the need to protect absent tenants' procedural rights, while central to refusing section 39(1)(f) relief, also contain broader observations about joinder and fairness drawn from appellate authority.

The matter illustrates the CSOS adjudication framework for enforcing sectional title levies and confirms the principle that owners may not withhold levies because of complaints about maintenance or common-property management. It also underscores that depositing money into an attorney's trust account is not equivalent to payment to the body corporate unless the debt is actually discharged. Further, the decision is significant for showing the procedural limits on section 39(1)(f) rental-redirection orders: such relief requires proof of tenancy and proper joinder or notice to affected tenants because their direct and substantial interests are implicated.