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Community housing schemes across the country are under severe pressure as unpaid levies drive many developments to the brink of collapse. Legal expert Johlene Wasserman, head of Community Schemes and Compliance at VDM Incorporated, has warned that essential services such as water, electricity, sewage, and garbage collection are at risk in several sectional title complexes.
What Happened
According to Wasserman, thousands of community schemes are crumbling due to widespread levy defaults. The Community Schemes Ombud Service (CSOS) reported 15,587 disputes in its 2023/2024 Annual Report, with 62.5% of cases (9,742) related to financial issues, primarily levy arrears and interest.
“Once-thriving complexes are falling apart,” said Wasserman. “Residents are facing raw sewage, decaying infrastructure, and unpaid municipal bills all because levy payments have dried up.”
She stressed that non-payment, regardless of reason, can rapidly destabilize a scheme, pushing it into a service delivery crisis.
Official Response and Legal Recourse
When a court grants judgment for unpaid levies, bodies corporate can apply for a Section 66 application under the Magistrates’ Courts Act, which allows creditors to seize and auction off the debtor’s movable property including furniture, electronics, and vehicles.
Wasserman made it clear: “Creditors can’t cut off water or electricity, restrict access, or shame owners. But they can use Section 66 to recover what’s owed legally.”
She explained that such actions must follow strict procedures:
- A valid court judgment
- Proof of non-payment despite demand
- A formal application via the magistrate’s court
- Enforcement by the sheriff
Landmark Court Rulings
Wasserman pointed to recent cases that reinforce the legal power of community schemes. In the Bondi Body Corporate matter, the South Gauteng High Court upheld the body corporate’s right to sell a Roodepoort unit over R50,974.31 in arrears despite the unit having a R1.4 million market value and an existing mortgage.
Another key ruling, Cilaos Body Corporate v Tsengiwe (2025), confirmed that bodies corporate may disconnect electricity for non-payment, provided they meet regulatory requirements. The owner in that case owed nearly R100,000 in combined levies and utilities.
Community Impact
The rulings have sent a clear message to scheme members: you can’t avoid your obligations.
“When you buy into a scheme sectional title, HOA, or retirement village you’re bound to pay levies,” Wasserman said. “You don’t need to sign anything. Membership is automatic upon transfer.”
She urged trustees to act within 60 days of arrears to prevent disruptions and rising costs. Delayed action can lead to special levies, legal fees, and deteriorating conditions for all residents.
Key Legal Principles for Trustees and Owners
- Trustees must act early to protect the financial stability of the scheme.
- Levies must be paid, even if the unit is rented or owners disagree with management.
- Rental redirection is possible through a CSOS order if owners fail to pay.
- Payment plans can be negotiated, but must be fair to the broader community.
- Legal costs incurred to recover arrears can be reclaimed from the defaulting owner.
“With the right legal strategy, schemes can recover debt and avoid collapse — without breaking the law,” Wasserman concluded.
