Sectional Title Levy and Body Corporate Disputes: The STSMA, Arrears and the CSOS

Sectional title living involves a trade-off that many owners only appreciate once a dispute arises: in exchange for shared amenities and shared costs, owners surrender a measure of autonomy to the body corporate. Most of the friction in community schemes is ultimately about money, and levy disputes top the list, whether the complaint is an owner who refuses to pay, a special levy that arrived without warning, or charges on an exclusive use area that seem impossible to reconcile with the budget. In this article we look at how levies work under the Sectional Titles Schemes Management Act 8 of 2011, what a body corporate may and may not do about arrears, how exclusive use areas complicate the picture, and how the Community Schemes Ombud Service has changed the way these disputes are resolved.

The legal framework

The management of sectional title schemes is governed by the Sectional Titles Schemes Management Act 8 of 2011 (the STSMA), which took over the management provisions previously found in the Sectional Titles Act 95 of 1986, together with the regulations to the STSMA, which contain the prescribed management and conduct rules that apply to schemes unless lawfully amended. Section 3 of the STSMA obliges the body corporate to establish both an administrative fund, for the day-to-day expenses of the scheme, and a reserve fund, for future maintenance and repairs, and to fund them by raising contributions from the owners. Those contributions are what everyone calls levies.

How levies arise, and what happens when they are not paid

Levies are not an optional charge invented by trustees; they are a statutory liability that follows from ownership of a unit. They are determined on the strength of budgets approved by the members, and the rules also make provision for special contributions where necessary expenses arise that were not budgeted for. When an owner falls into arrears:

• the body corporate may charge interest on the overdue amount, but only at a rate that complies with the prescribed management rules, which cap the rate by reference to the maximum permitted under the National Credit Act 34 of 2005;
• the prescribed management rules require proper credit control, including a final notice before recovery proceedings are taken;
• the reasonable legal costs incurred in collecting arrear contributions are ultimately for the defaulting member’s account under the rules;
• levies, like most debts, are subject to extinctive prescription under the Prescription Act 68 of 1969, so a body corporate that sits on old arrears for years risks losing them.

Importantly, trustees are obliged to collect what is owing. They have no general discretion simply to forgive an owner’s levy debt, because the shortfall lands on every other owner in the scheme.

What a body corporate may not do

Frustrated trustees sometimes reach for self-help: cutting off a defaulter’s water or electricity, deactivating gate access, or barring the owner from common facilities. Unless a court order or a properly applicable rule authorises the step, conduct of this kind is generally unlawful, and disconnection of services that an occupier enjoys as part of possession of the unit exposes the body corporate to an urgent spoliation application and a costs order. The correct route for arrears is a demand followed by recovery proceedings, not pressure through the utilities. Owners, for their part, are generally not entitled to withhold levies because they are unhappy with the trustees or the state of the common property; the courts treat levies and grievances as separate questions, each to be resolved through the proper channel.

Exclusive use areas

Exclusive use areas are parts of the common property, such as garden areas, parking bays, storerooms or balconies, in respect of which a particular owner has the exclusive right of use. They may be created formally by registration under the Sectional Titles Act 95 of 1986 or conferred through the scheme’s rules. Because the areas remain common property, the body corporate remains responsible for them, and the legislation permits it to recover from the holder the costs attributable to the exclusive use area over and above the ordinary levy. Disputes in this area are common: owners query how the additional contributions were calculated, trustees discover that historic allocations of bays and gardens were never properly formalised, and buyers find that the exclusive use rights they thought they purchased were never validly created. These disputes frequently require careful analysis of the scheme’s registered documents and rules before they can be resolved.

The CSOS: a dedicated dispute forum

The Community Schemes Ombud Service (CSOS), established under the Community Schemes Ombud Service Act 9 of 2011, provides a statutory dispute-resolution service for all community schemes, including sectional title schemes, homeowners’ associations and share block companies. In terms of section 38 of the Act, any person who is a party to a dispute, or materially affected by it, may apply to the CSOS for relief. Section 39 lists the categories of orders an adjudicator may make, which include financial issues such as incorrectly determined or unreasonable contributions, behavioural issues, scheme governance issues, disputes about meetings, management services, and works on private and common areas.

The process is designed to be accessible: an application is assessed, referred to conciliation, and if conciliation fails, referred to an adjudicator, who investigates and makes a binding order. An adjudicator’s order may be taken on appeal to the High Court, but under section 57 of the Act only on a question of law, and the appeal must be lodged within 30 days. In Stenersen and Tulleken Administration CC v Linton Park Body Corporate 2020 (1) SA 651 (GJ) the court emphasised that the adjudicator’s factual findings are treated with deference, and the appeal is confined to whether the law was correctly interpreted and applied.

CSOS or court?

The CSOS is an inexpensive forum well suited to the everyday disputes of scheme life, and for many owners it is the natural first port of call. It is not, however, the answer to everything. Bodies corporate routinely pursue substantial arrear levy claims through the courts, urgent matters such as spoliation or interdicts belong in the High Court, and complex questions about the validity of rules or exclusive use rights may justify court proceedings from the outset. Choosing the right forum at the start of a dispute is itself a strategic decision on which proper advice pays for itself.

Conclusion

Levy and body corporate disputes sit at the intersection of statute, registered rules and ordinary neighbourly friction, and they escalate quickly when either side takes a shortcut. Whether you are a trustee dealing with a persistent defaulter, or an owner disputing a levy, a special contribution or an exclusive use charge, we can help you choose the right forum and present your case properly. As part of our property litigation practice we act in CSOS applications and court proceedings alike, so please contact us for advice on your situation.