ADJUDICATION ORDER IN TERMS OF SECTION 54

OF THE COMMUNITY SCHEMES OMBUD SERVICE ACT NO.9 OF 2011

Reference Number: CSOS 7466/GP/23

In the matter between: -

TRUSTEES OF THE MADISON AT AMBERFIELD BODY

CORPORATE Applicant

And

OA OLADEJI Respondent

ADJUDICATION ORDER

EXECUTIVE SUMMARY

 Relief applied for in terms of the CSOS Act:

1. Section 39(1) (e)

(1) In respect of financial issues—

(e) An order for the payment or re-payment of a contribution or any

other amount.

 Date referred to adjudication:

17 October 2023.

 Date Adjudication conducted:

26 October 2023.
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 Name of the Adjudicator:

P MPAPELE.

 Order:

Granted.

INTRODUCTION

1. The applicants are the Trustees of the body corporate of Madison at Amberfield
City, a legal entity registered according to the Sectional Titles Scheme
Management Act, No. 8 of 2011 (STSMA) and a community scheme as defined
in the Community Schemes Ombud Services Act No.9 of 2011(CSOS Act)
situated at Erf 4815, Capensis Avenue, Rooihuiskraal Avenue, Gauteng.

2. The scheme is duly represented by CSI Management, a managing agent as

defined in section 1 of the CSOS Act, duly appointed in terms of Trustee
Resolutions dated 06th March 2020 and 29 May 2023.

3. The respondent is OA Oladeji the registered owner of unit 168 within the
applicants’ scheme, situated at Capensis Avenue, Rooihuiskraal Avenue,
Gauteng.

4. This is an application for dispute resolution in terms of Section 38 of the

Community Schemes Ombud Service Act 9 of 2011 (the CSOS Act).

5. The application was made in the prescribed form and lodged with the Community
Schemes Ombud Service (the CSOS) by way of e-mail.

6. The Applicant is seeking relief in terms of Section 39(1)(e) of the CSOS Act in
respect:

s39 (1): In respect of financial issues

(e) i.e., an order for payment or re-payment of a contribution or any other

amount.

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7. This matter is adjudicated in terms of the CSOS Act; Practice Directive on

Dispute Resolution, 2019 (as amended) and the Amended Practice Directive
dated 23 June 2020 which provides under paragraph 8.2: “Adjudications will be
conducted on the papers filed by the parties and any further written submissions,
documents and information as requested by the appointed Adjudicator”.

8. The adjudication was conducted on 26th October 2023, and an order is now
determined.

PRELIMINARY ISSUES

9. None.

RELEVANT STATUTORY PROVISIONS

10. Section 1 of the CSOS Act defines-

 "community scheme" as “any scheme or arrangement in terms of which there is
shared use of and responsibility for parts of land and buildings, including but not limited
to a sectional titles development scheme, a share block company, a home, or property
owner's association, however constituted, established to administer a property
development, a housing scheme for retired persons, and a housing cooperative and
"scheme" has the same meaning”.
 "dispute" as “a dispute in regard to the administration of a community scheme
between persons who have a material interest in that scheme, of which one of the
parties is the association, occupier or owner, acting individually or jointly.”

11. Section 38 of the CSOS Act provides-

“Any person may make an application if such person is a party to or affected materially
by a dispute.”

12. Section 45(1) provides-

“The Ombud has a discretion to grant or deny permission to amend the application or
to grant permission subject to specified conditions at any time before the Ombud refers
the application to an adjudicator.”

13. Section 47 provides-

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“On acceptance of an application and after receipt of any submissions from affected
persons or responses from the applicant, if the Ombud considers that there is a
reasonable prospect of a negotiated settlement of the disputes set out in the
application, the Ombud must refer the matter to conciliation.”

14. Section 48 (1) provides-

“If the conciliation contemplated in section 47 fails, the Ombud must refer the
application together with any submissions and responses thereto to an adjudicator”.

15. In terms of Section 50-

“The adjudicator must investigate an application to decide whether it would be
appropriate to make an order.”

16. Section 51 provides for the investigative powers of the Adjudicator-

“(1) When considering the application, the adjudicator may-
(a) require the applicant, managing agent or relevant person-
(i) to give to the adjudicator further information or documentation.
(ii) to give information in the form of an affidavit or statement; or
(iii) subject to reasonable notice being given of the time and place, to come to
the office of the adjudicator for an interview.
(b) invite persons, whom the adjudicator considers able to assist in the resolution of
issues raised in the application, to make written submissions to the adjudicator
within a specified time; and
(c) enter and inspect-
(i) an association asset, record, or other document.
(ii) any private area; and
(iii) any common area, including a common area subject to an exclusive use
arrangement.”

SUMMARY OF RELEVANT EVIDENCE

Applicant’s Submissions

17. The applicants submit that CSI Property Management (Pty) Ltd are the
appointed managing agent of the applicants in terms of a management
agreement concluded with the applicants, responsible for the collection of
overdue levies.

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18. The applicants submit that they require the owners to pay their monthly levies
in order to effectively manage the scheme.

19. The failure of some owners to contribute to the scheme’s monthly expenses
has had a financial impact on the scheme’s ability to effectively manage the
estate.

20. The applicants submit that they have sent SMSs, reminder notices, letter of
demand and phone calls in an attempted to collect the overdue levies.

21. Applicants submit that they have, however, been unsuccessful in entering into
a payment arrangement.

22. The applicants submits that they have, however, been unsuccessful in their
efforts to enter into a payment arrangement with the respondent.

Relief sought by the Applicant:

23. That respondent pay to the applicants the full amount of R9, 067.82 (Nine
Thousand and Sixty-Seven Rand and Eighty-Two cents), being the balance
reflecting on the levy statement in respect of current and outstanding levies and
ancillary amounts charged) which ancillary charges include the CSOS levies
charged monthly) in respect of unit 168, being the unit owned by the respondent
in the applicants’ scheme, as at 01.10.2023.

24. Payment of future monthly contributions

Submissions by the Respondents

25. None.

Relief sought by the Respondent.

26. None.

EVALUATION AND FINDINGS

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27. I have perused the parties’ written submissions.

28. In evaluating the evidence and information submitted, the probabilities of the
case together with the reliability and credibility of the witnesses must be
considered.

29. The general rule is that only evidence, which is relevant, should be considered.
Relevance is determined with reference to the issues in dispute.

30. The degree or extent of proof required is a balance of probabilities. This means
that once all the evidence has been tendered, it must be weighed up and
determined whether the applicants’ version is probable. It involves findings of
facts based on an assessment of credibility and probabilities.

31. The applicant has furnished the adjudicator with, amongst others, its conduct
rules that deals with the obligation of members.

32. Conduct rule 16 deals with the members obligations with regard to payment of
levies and provides as follows:

“16 LEVY CONTRIBUTIONS

16.1 All levies and other miscellaneous debits are due and payable on the first day
of each month. Any monies outstanding on the 7th of the month shall bear
interest at 2% per month. The owner will pay the costs of any arrear reminders
that are sent to him. In addition to the above, the trustees shall have the right
to:-
16.2 Proceed with any right the Body Corporate may have in law, for the recovery
of any amount due.
16.3 Suspend any or all other services to the relevant unit for such time as they may
consider necessary.
16.4 All deposits may, at the discretion of the Trustees, be applied to any amount
outstanding but in such event the deposit shall immediately be reinstated by
the relevant owner to the required amount.”

33. The adjudicator finds, based on the statement of respondent’s levy account
provided by the applicants in support of their application, that the respondent’s
account had previously been up to date.

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34. Even though respondent’s monthly levy payments have been irregular,
payments have been in lump sums in excess of the requirement monthly
contributions.

35. This had been the trend until July 2023 when it started falling into arrears. .

36. The adjudicator further finds that since then to date of this order, the respondent
has not made any payments towards the arrear and current levies.

37. As result of non-payment or short payment by the respondent, the arrears have
been accumulating to the extent that, as at 01 October 2023, the amount of the
debt was R9, 067.82.

38. In terms of a statement of account dated 01.11.2023 furnished as part of their

final written submission as per the adjudicator’s invitation acting in terms of his
powers under section 51 of the CSOS Act, 9 of 2011, the arrears as of that date
were has accumulated to R11, 288.70.

39. The adjudicator note that the respondent failed to reply to the adjudicator’s
request.

40. The adjudicator notes, in this regard, the provisions of Prescribed Management
Rule (PMR) 25 of the Regulations published in terms of the Sectional Titles
Management Scheme Act, 8 of 2011 (STSMA) as follows:

“(1) The body corporate must as soon as possible, but no later than
14 days after the approval of the budget referred to in rule 17(6)(j)(iv) by a
general meeting, give a member written notice of the contributions and
charges due and payable by that member to the body corporate, which notice
must.

(a) State that the member has the obligation to pay the specified contribution and
charges.
(b) Specify the date for each payment; and,
(c) If possible, state that interest at the rate specified in the notice will be payable
on the overdue contribution and charges.
(d) Include dispute resolution process that applies in respect of disputed
contributions and charges.

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(2) If monies owing are not paid on the date specified in the notice referred to in
sub-rule (1), the body corporate must send a final notice to the member to which
notice must state that:
a. That the member has an obligation to pay the overdue contributions
and charges and any applicable interest immediately; and,
b. If applicable,
i. the interest that is payable on any overdue contributions and
charges at the date of the notice; and
ii. the amount that will accrue daily until the amount of until the
payment of the overdue contribution and charges.”

41. The adjudicator further notes the applicants’ Resolution adopted on 29th May
2023 with the regard to the obligation of members to payment of levies as
follows:

“2 Owners of unit9s) within the BC are liable and must pay their contributions
towards the administrative and reserve fund in accordance with the approved
budget of the BC on or before the 1st day of each and every month.

3. In the event that the owner fails to pay his or her levy contributions on or before
the 1st day of each months, interest will be charged on the arrear amount at the
rate of 24% per annum.
4. The trustees are entitled and authorised to institute legal action against an
owner for the recovery of any amount due to the BC and/or the enforcement of
the BC conduct rules and / or application legislation.
6. Owners shall be liable for and must pay all expenses and legal costs incurred
by the BC in the recovery of monthly contributions and / or enforcement of the
rules and or applicable legislation.”
.
42. The adjudicator is therefore satisfied on the evidence before him that the
respondent had an obligation to pay the monthly contributions and charges as
per the updated statement of levy but failed to do so.

43. The adjudicator is further satisfied that on account of their failure to pay the
contributions, the respondent is in breach of PMR 25 and the applicants’
governance documents or rules.

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44. The adjudicator therefore finds on the evidence before him that the respondent
is liable to the applicants in respect of arrear levies in the amount of R11,
288.70.

45. It is noted, in this regard, that in terms of section 2(1) of the Sectional Titles
Schemes Management Act 8 of 2011:

“With effect from the date on which any person other than the developer becomes an owner
of a unit in a scheme, there shall be deemed to be established for that scheme a body
corporate of which the developer and such person are members, and any person who
thereafter becomes an owner of a unit in that scheme is a member of that body
corporate”.

(My emphasis)

46. Section 3(1) of the aforesaid Act further provides as follows:

“A body corporate must perform the functions entrusted to it by or under this Act or the
rules, and such functions include—
(a) to establish and maintain an administrative fund which is reasonably sufficient to
cover the estimated annual operating costs—
(i) for the repair, maintenance, management, and administration of the
common property (including reasonable provision for future maintenance and
repairs).
(ii) for the payment of rates and taxes and other local municipality
charges for the supply of electricity, gas, water, fuel and sanitary or other services to
the building or land.
(iii) for the payment of any insurance premiums relating to the building or
land; and,
(iv) for the discharge of any duty or fulfilment of any other obligation of the
body corporate.
(b) to establish and maintain a reserve fund in such amounts as are.
reasonably sufficient to cover the cost of future maintenance and repair of common
property but not less than such amounts as may be prescribed by the Minister; . . .
and,
(c) to require the owners whenever necessary to make contributions to such funds . . .. “

47. I further note the provisions of section 3(2) of the STSMA as follows:

(2) Liability for contributions levied under any provision of subsection (1), save for

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special contributions contemplated by subsection (4), accrues from the passing of a

resolution to that effect by the trustees of the body corporate, and may be recovered
by the body corporate by an application to an ombud from the persons who were
owners of units at the time when such resolution was passed: Provided that upon the
change of ownership of a unit, the successor in title becomes liable for the pro rata
payment of such contributions from the date of change of such ownership”.

48. It follows that unit-owners such as the respondent who default on their levy
payments, or who do not pay their levy payment in full and up to date every
month, are effectively being subsidised by other members of the body corporate
who pay their levies and ancillary contributions conscientiously every month.

49. The responsibility to collect arrear levies rests with the Trustees of the
Applicant.

50. In this regard, I note the case of Body Corporate of Kleber vs Sehube &
Another (2021/A3094) [2021] JHC 653(9 November 2021) in which the Court,
interpreting the meaning of “accrue” and “due” in sections 3(2) and 3(3) of the
STSMA, held as follows:

“[11] However, it seems to me plain that the textual distinction is merely an unhappy
example of poor drafting of the legislation. Section 3 (2) creates a liability. A ‘liability’
means, unequivocally, an obligation to perform the prescribed deed; in this case, to
pay up. Both subsections should be read as meaning that the date of the resolution
triggers the duty to pay.”

51. The adjudicator also notes the Gauteng High Court and the Supreme Court
case of Body Corporate of Empire Gardens v Sithole & another (240/2016)
[2017] ZASCA 28 (27 March 2017)). The body corporate of Empire Gardens,
having tried other ways to recover unpaid levies from the owners, eventually
had no choice but to seek a judgment for the debt, the attachment of the
property and a sale in execution.

52. The Court had the following to say at paragraph 11 of the judgment where it
was dealing with the section 37(1) which deals with the functions of a body
corporate as does section 3 (1) of the STSMA:

“[1] Section 37(1)(a) provides that body corporate is obliged to:

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“…to establish for administrative expenses a fund sufficient in the opinion of the body
corporate for the repair, control, upkeep, management and administration of the
common property (including reasonable provisions for maintenance and repairs), for
payment of rates and taxes and other local authority charges for the supply of electricity
current, gas, water, fuel, sanitary and other services to the building or buildings and
land, and any other premiums of insurance and the for the discharge of any duty or the
fulfilment of any other obligation of the body corporate.

In terms of section 37(1)(b) it must require the owners of units, who in terms of section
36(1) are also members of the body corporate, to make contributions where necessary
to the fund established in terms of section 37(1)(a). it must determine from time to time
amounts to be raised from each owner and must raise the amounts by levying
contributions on the owners in proportion to quotas of their respective section (Section
37(1) (a) and (c)”.

53. The body corporate cannot perform its functions and duties in the absence of
funds from unit owners.

54. Failure by any one owner to pay levies is detrimental to the interests of all
owners within the scheme as they have to make additional contributions in
order to make up for the shortfall created by defaulting owners, such as the
Respondent or have the value of their property undermined because their body
corporate may have to cut back on maintenance and repairs in order to make
up for the shortfall.

55. The adjudicator is therefore satisfied on the evidence before him that the
respondent is liable to the applicant in respect of non-payment of arrear levies
in the amount of R11, 288.70.

56. Accordingly, the relief the applicants seek for payment of the arrear levies in
the amount of R11, 288.70 is granted.

Ad Interest on arrears

57. The applicants have charged interest on arrears to the respondent’s levy
account.

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58. In this regard, the adjudicator notes the provisions of Prescribed Management
Rule (PMR) 21 of the Regulations promulgated in terms of Sectional Titles
Schemes Management Act, 8 of 2011, provides as follows:

“PMR 21(3(c) A body corporate may on the authority of a trustee written

resolution, ---
(c) Charge interest on any overdue amount payable by a member to
the body corporate, provided that the interest charge does not
exceed the maximum rate of interest payable per annum in terms
of the National Credit Act (2005), No. 34 of 2005 compounded
monthly in arrears.”

59. The adjudicator is satisfied that the applicants are entitled to charge interest on
arrear levies at 2% per annum as aforesaid.

60. Accordingly, the interest charged by the applicants to the respondent’s account
was validly and lawfully charged.

Ad administrative cost and costs charged as per Annexure B of the Debt

Collectors Act

61. The adjudicator also notes as per the statement of levy dated 01 November
2023 that the applicants have debited the respondent’s account with debt
collection charges:

62. Prescribed Management Rule (PMR) 25 further provides as follows:

“25(5) A body corporate must not debit a member’s account with any amount that is
not a contribution or a charge levied in term of the Act or these rules without
a member’s consent or the authority of a judgment or order by a judge,
adjudicator, or arbitrator.”

63. Section 8 of the Debt Collectors Act, 1998 provides as follows:

“(1) As from the date fixed by the minister in the Gazette, no person, excluding an attorney
or an employee of an attorneys, shall act as a debt collector unless he or she is
registered in terms of this Act, and in the case of a company or close corporation
registered as a debt collector, unless in addition to the company or close corporation

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itself, every director of the company or member of the corporation, and every officer of
such company or close corporation, not being himself or herself a director or a member,
but who is concerned with debt collection as the case may be, is registered.”

64. The applicants have furnished the adjudicator with confirmation of registration
by their managing agent as a debt collector.

65. The applicants are therefore entitled to debit the respondents’ account with
administrative costs and collection charges as per Annexure B of the Debt
Collectors Act.

66. Accordingly, debt collection charges charged and incurred as per annexure B
of the Debt Collectors Act were validly and lawfully charged to the respondent’s
account.

67. The relief the applicants seek for payment of future monthly contributions does
not fall within the scope of section 39 of the CSOS Act 9 of 2011.

68. Accordingly, the relief is refused.

ADJUDICATION ORDER

69. In the circumstances, the following order is made:

I find for the Applicant.

69.1 The respondent, AD OLADEJI, the registered owners of unit 168

within the Applicant scheme situated at Capensis Avenue,
Rooihuiskraal, Gauteng is liable to the Applicants in the amount of R11,
288.70 (Eleven Thousand Two Hundred and Eighty-Eight Rand and
Seventy cents), outstanding to it in respect of levies and ancillary
amounts charged, which ancillary charges include CSOS levies in
respect of unit 168 as of 01 November 2023.

69.2 The respondent is ordered to pay the Applicant the amount of R11,
288. 70 (Eleven Thousand Two Hundred and Eighty-Eight Rand and
Seventy cents), in Twelve (12) equal monthly instalments of R940, 73
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(Nine Hundred and Fourty Rand and Seventy-Three Cents), the first of
the twelve consecutive equal monthly instalments to be made within 30
days from date of delivery of this order.

69.3 Thereafter, the payment of eleven (11) further instalments of R940.73

must be made on the 1st day of each succeeding month.

69.4 No interest shall accrue on the outstanding amount within the period of
twelve months allowed for payment as ordered.

69.5 The above order does not affect the usual regular monthly levies
and ancillary payments required to be made by the Respondent.

69.6 In the event that the respondent defaults on payment within the period
twelve months as ordered above, the full amount due to the Applicant
shall become immediately due and payable by the respondent.

COSTS

70. There is no order as to costs.

RIGHT OF APPEAL

71. Section 57 of the CSOS Act, provides for the right of appeal-

“(1) An applicant, the association or any affected person who is dissatisfied by an

adjudicator's order, may appeal to the High Court, but only on a question of law.
(2) An appeal against an order must be lodged within 30 days after the date of delivery of
the order of the adjudicator.
(3) A person who appeals against an order, may also apply to the High Court to stay the
operation of the order appealed against to secure the effectiveness of the appeal.”

DATED AT JOHANNESBURG ON 26th OCTOBER 2023.

_________________________
P MPAPELE
(CSOS PART-TIME ADJUDICATOR)
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