ADJUDICATION ORDER IN TERMS OF SECTION 54

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

Ref: CSOS11399/GP/22

IN THE MATTER BETWEEN

AKHONA BATHANDE-BONKE MPIKELELI Applicant

and

PRETOR GROUP Respondent

(Represented by Rejoice Tolo / Taitai Matjeni Pretor Group in her capacity as Debt
collection officer / administrator of the Body Corporate)

ADJUDICATION ORDER

EXECUTIVE SUMMARY

• Relief applied for in terms of the CSOS Act: Section 39(1)(e)- in respect of
financial issues – for an order compelling the Body Corporate / Managing Agent
to reverse all administrative and debt collection fees charged on Applicant`s
levy account.
• Date Adjudication conducted: 27 June 2023.
• Name of the Adjudicator: Zama Matayi.
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• Order: As per paragraph 29 below.
• Circulate: No
• Authority:
• Legislative Provisions: CSOS Act no. 9 of 2011.
STSMA 8 of 2011.
• Date issued: 20 June 2023.
• Date sent to parties: 20 June 2023.

INTRODUCTION

1. The Applicant is Akhona Bathande-Bonke Mpikeleli owner of unit 32 Villa Rossa

Sectional Scheme situated at 13 Nentabos Street, Rooihuiskraal, Centurion,
Gauteng.

2. The Respondent is Pretor Group a Property Management company who in terms

of a Management Agreement dated 02 November 2022 is the Managing Agent of
the Body Corporate. The Respondent is represented by Rejoice Tolo who is the
debt collecting agent of the Respondent.

3. The community scheme is the Villa Rossa Court Body Corporate established in
terms of section 2 of the Sectional Titles Scheme Management Act, situated at
Centurion, 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”’). The application was
made in the prescribed form and lodged with the Community Schemes Ombud
Service (CSOS) by way of email.

5. The application seeking relief in terms of section 39 of the CSOS Act, is in respect
of-
Section 39(1)(e)- in respect of financial issues – for an order compelling the Body
Corporate / Managing Agent to reverse all administrative and debt collection fees
charged on Applicant`s levy account.

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6. This matter is adjudicated in terms of the CSOS Act and Practice Directive on
Dispute Resolution, 2019 as amended and more specifically 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 ”. The parties were requested to
make written submissions. The adjudication was conducted based on the
submissions made by the parties and an order is now determined.

PRELIMINARY ISSUES

7. There were no preliminary issues raised.

RELEVANT STATUTORY PROVISIONS

8. 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 regarding 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”.

9. 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”.

10. 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”.

11. 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”.

12. 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”.

13. In terms of Section 50-

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

14.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”.

15. If the dispute has not been resolved through conciliation, the matter may be
referred to an adjudicator. Accordingly, a certificate of non-Resolution was issued
in terms of Section 48(1) of the CSOS Act. The matter was referred directly to
adjudication due to no response from the Respondent. In terms of Section 39(1)(e)-
in respect of financial issues – for an order compelling the Body Corporate /
Managing Agent to reverse all administrative and debt collection fees charged on
Applicant`s levy account.

SUMMARY OF RELEVANT EVIDENCE

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Applicant’s Submissions

16. The Applicant submitted that the 1st Respondent who is the Managing Agent of the
scheme has been charging residents debt collection fees and debt collection
related administrative fees for the late levy payments. The Applicant submitted that
the scheme`s conduct rules do not discuss or mention that debt collection would
be applicable on late levy payment.

17. The Applicant submitted that the Managing Agent did not advise members that
fees and interests will be charged on outstanding arrears. The Applicant further
submitted that fees and charges have been charged on his levy account. The
Applicant submitted that the Managing Agent did not advise members that they are
registered as debt collectors.

18. The Applicant submitted that he sent an inquiry to the Managing Agent requesting
clarity on the additional fees and charges on his levy account. The Applicant
submitted that he was advised that the Managing Agent was entitled to charge
administration fees on outstanding levies. The Applicant submitted that he
requested a refund of all charges / fees levies on his levy account. The Applicant
submitted that the Managing Agent refused to reverse and or refund the additional
charges on his account. The Applicant submitted that the Managing Agent should
allow members to vote on whether debt collection and charges should be levied on
members.

Relief sought by the Applicant:

19. Applicant seeks an order compelling the Managing Agent to reverse the
administrative and debt collection fees.

Respondent’s Submissions

20. The Respondent submitted that its relationship with the Body Corporate is based
on the service level agreement between the parties. The Respondent submitted
that in terms Clause 4.7.1 of the Management Agreement signed between the
Body Corporate the 1st Respondent is empowered to collect arrear levies in its
capacity as a registered Debt Collector in accordance with the Debt collector`s Act
in respect of amounts owing by members to the Body Corporate.

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21. The Managing Agent submitted that in terms of Clause 4.7.1 of the Management
Agreement the defaulting debtor shall be charged such fees as prescribed in terms
of the Debt Collectors Act. The Respondent submitted a copy of the Management
Agreement which was received and marked Annexure “A”. The submitted that
the 1st Respondent is registered as a Debt Collector with the Council for Debt
Collectors. The Respondent submitted a copy of the registration certificate in the
name of Pretor Group (PTY)Ltd which expires on 19 July 2023. This copy was
received and marked Annexure “B”.

22. The Respondent further submitted that in terms of the Management Agreement
levies are to be paid monthly in advance on or before the 1st day of each month.
The Respondent submitted a copy of the Applicant`s levy statement which shows
that at some point the Applicant`s account was in arrears and the said debt
collection fees and charges were levied on the account. A copy of the statement
was received and marked Annexure “C”.

23. The Respondent further submitted that letters of demand were also sent to the
Applicant advising that his account was in arrears and demanding payment.

Relief sought by the Respondent.

24. The Respondents seeks an order dismissing the application.

EVALUATION & FINDING

25. In evaluating the evidence and information submitted, the probabilities of the case
together with the reliability and credibility of the witnesses must be considered. The
general rule is that only evidence, which is relevant should be considered.
Relevance is determined with reference to the issue in dispute. The degree or
extent of proof required is on a balance of probabilities. This means that once all
the evidence has been tendered, it must be weighed up and determined whether
the versions before me are probable. This involves findings of fact based on an
assessment of credibility and probability.

26. In terms of Section 3(1)(c) of the STSMA, an owner/member of a Body Corporate

is liable to contribute, in proportion towards the levies, as approved by the trustees

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of the Body Corporate, as well as any additional contributions as approved by the
trustees. The levy is a monthly instalment paid by sectional title unit owners which
facilitates the efficient day-to-day maintenance and management of the communal
property of a Sectional Title Scheme. The Body Corporate is responsible for
establishing an administrative fund that adequately meets these monthly
expenses. Every owner is liable to pay a monetary contribution towards this fund;
ensuring that ample funding is available to fulfil the obligations set forth by the Body
Corporate.

27. The Act stipulates that the levy payment is compulsory. Owners who do not pay
their levies places an unfair burden on the community of Owners within the Scheme
who are diligently paying their levies. Levies play an essential part in ensuring that
a Sectional Title Scheme continues to operate smoothly in all aspects of
management and maintenance; unpaid levies compromise the integrity and
condition of the Scheme because the Body Corporate is unable to meet its financial
obligations.

28. Levies are a vital component for the effective and efficient running of the scheme
and provide the necessary financial support for the upkeep and longevity of the
development. Each owner is essentially investing in the scheme through monthly
financial contributions, and it is therefore important that owners understand the
value and purpose of these contributions. Trustees also have the authority to raise
special levies if needed, so the understanding of special levies is essential too. The
funds collected are also used to cover administrative costs like management fees,
bank charges and stationery, municipal costs including water, electricity, refuse
collection and sewage, and insurance for the entire property. An owner who
continually defaults in his levy payments is effectively being subsidised by the other
members of the Body Corporate who pay their contributions.

29. The specified contributions, interests and charges or fees are payable monthly in
advance on the 1st day of each month as prescribed by the trustees. The trustees
are authorised and have authorised the Managing Agent to take all reasonable
steps for the collection of arrear levies and charges including legal action to ensure
that the Body Corporate receives levies and other monies due to it.

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30. The Respondent is registered as a Debt Collector with the Council for Debt
Collectors with a valid certificate which expires on 19 July 2023. It therefore follows
that the 1st Respondent is entitled to charge debt collection fees and administrative
fees. It is the Applicant`s responsibility to ensure that his levies are paid on time to
avoid additional fees and or charges. In the circumstance and in the totality of the
evidence this application is without substance and stands to be refused.

COSTS

31. As far as costs are concerned parties to a dispute are generally required to meet
their own costs. This includes the application fee, the fee for inspecting and
obtaining copies of any submission or reply, any personal costs incurred to attend
the adjudication and any legal costs incurred in making and responding to an
application. Both parties incurred legal fees in the circumstances it is only that each
party to pay for its own legal fees.

ADJUDICATION ORDER

32. In the circumstances, the following order is made in terms of Section 54(1)(a) read
with Sections 39 of the Community Scheme Ombud Service Act 9 of 2011.

1. The application for the reversal of debt collecting fees and administrative
charges is refused.

2. No order as to costs is made.

RIGHT OF APPEAL

33. 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.

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(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 Cape Town on 20 July 2023

_______________
ADJUDICATOR

Zama Matayi
Signed Electronically

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