If you have ever been involved in the process of collecting unpaid levies via the civil courts, you will know that this can be a very lengthy and often quite costly process, involving attorneys, the sheriff, various prescribed waiting periods and countless postponements.
Once the body corporate finally has its day in court and hopefully manages to obtain an order against the defaulting owner for the payment of the outstanding levy debt, the defaulting owner’s ability to repay the full amount owing to the body corporate is usually reduced by the high attorney fees and other legal costs that also need to be recovered from the owner.
During the consideration of the Sectional Titles Schemes Management Act, the Parliamentary Committee would have discussed this exact issue of the length and cost of court proceedings, for the recovery of contributions from owners, and agreed that bodies corporate should in the first instance use the Community Schemes Ombud Service to recover outstanding contributions.
Although this is a sensible approach to levy collections, unfortunately this decision has not been followed in practice and the civil court rolls continue to be burdened with proceedings for the recovery of levies.
We believe that the best way for community schemes to effectively maximise their ability to recover outstanding levies from defaulting owners, while avoiding costly legal fees and lengthy formal legal processes, is to consider using the levy collection process allowed in terms of the Community Schemes Ombud Services Act.
Firstly, an application for the recovery of unpaid contributions via CSOS only costs R150 and does not require the involvement of attorneys. Secondly, the process is specifically aimed at achieving quick results, with as little formality and technicality as possible.
The trustees simply need to download and complete an application form from the CSOS website (https://www.csos.org.za/lodge-dispute/) and accompany the application with the following supporting documents:
- The signed trustee resolution authorising the raising of contributions;
- The notice sent to owners after the AGM confirming the contributions payable;
- The final demand sent to the owner requesting payment; and
- A copy of the owners levy statement.
The owner will be given seven days to submit a response to the application, whereafter the matter will be referred to conciliation, and if conciliation fails, to adjudication. If the application is not dismissed, the adjudicator will make an order for the payment of the outstanding levies and the adjudication order is enforceable as if it were a judgment of the Magistrate’s court or High Court, depending on the amount of money claimed.
Since the establishment of the Community Schemes Ombud Service, it couldn’t be easier to recover outstanding levies and we strongly suggest that you consider putting this process to the test.
Should you require specific advice on how to lodge a successful application at the CSOS for the recovery of unpaid contributions, please don’t hesitate to contact our consulting department at firstname.lastname@example.org for a no-obligation quote to provide the necessary legal assistance.
Article reference: Paddocks Press: Volume 15, Issue 5.
Specialist Community Scheme Attorney (LLB, LLM), Auren Freitas dos Santos, has previously been a Portfolio Manager and a Legal & Compliance Officer of a large managing agency.
This article is published under the Creative Commons Attribution license.