{"id":856537,"date":"2026-04-11T07:00:00","date_gmt":"2026-04-11T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=856537"},"modified":"2026-04-10T16:19:26","modified_gmt":"2026-04-10T14:19:26","slug":"high-court-warning-for-estates-and-complexes-collecting-levies-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/856537\/high-court-warning-for-estates-and-complexes-collecting-levies-in-south-africa\/","title":{"rendered":"High Court warning for estates and complexes collecting levies in South Africa"},"content":{"rendered":"\n

A recent High Court ruling has sent a warning to bodies corporate and residential estates across South Africa.<\/p>\n\n\n\n

Levy collection practices that allow legal costs to spiral far beyond the underlying debt may not stand up in court, even where the arrears themselves are not disputed.<\/p>\n\n\n\n

In a judgment handed down on 10 March 2026, the High Court of South Africa refused to grant judgment against a homeowner living in a gated community.<\/p>\n\n\n\n

The homeowner owed just under R18,000 in unpaid levies after legal costs ballooned to nearly five times that amount.<\/p>\n\n\n\n

The case has highlighted and criticised how levy arrears are pursued in estates, gated communities, or sectional title schemes.<\/p>\n\n\n\n

This is the feedback from Johlene Wasserman, Director of Community Schemes and Compliance at VDM Incorporated, who said the ruling signals a shift in how courts approach these matters.<\/p>\n\n\n\n

\u201cThe ruling reflects growing judicial concern about how levy arrears are pursued. Levy arrears are the financial lifeblood of community schemes,\u201d she said. <\/p>\n\n\n\n

\u201cHowever, this judgment is a clear warning that recovery processes cannot be allowed to run out of control.\u201d<\/p>\n\n\n\n

She added that courts are not prepared to simply rubber-stamp enforcement where legal costs appear excessive or poorly supervised.<\/p>\n\n\n\n

Wasserman explained that the judgment comes at a time when levy recovery disputes are increasingly under scrutiny.<\/p>\n\n\n\n

This is particularly due to rising legal costs affecting not only defaulting homeowners but also trustees and managing agents responsible for governance.<\/p>\n\n\n\n

\u201cThe ruling makes it clear that courts are scrutinising not just whether levies are owed, but whether the methods used to recover them are fair, transparent, and proportionate,\u201d she said.<\/p>\n\n\n\n

As the matter progressed, the legal fees escalated dramatically, which prompted the Court to examine whether the costs being claimed were lawful, reasonable, and proportionate. <\/p>\n\n\n\n

The Court ultimately found that the issue had shifted beyond unpaid levies to a broader question about the justification of those costs.<\/p>\n\n\n\n

\u201cOn that basis, the homeowner was granted leave to defend the claim rather than facing immediate judgment,\u201d said Wasserman.<\/p>\n\n\n\n

Excessive recovery fees can place homeowners under severe<\/h2>\n\n\n
\n
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Johlene Wasserman, Director of Community Schemes and Compliance at VDM Incorporated<\/em><\/figcaption><\/figure><\/div>\n\n\n

A key issue in the case was the use of acknowledgements of debt (AODs), commonly used by bodies corporate to formalise repayment arrangements.<\/p>\n\n\n\n

Wasserman warned that these agreements are not beyond challenge. \u201cThe Court made it clear that an AOD is not a blank cheque,\u201d she said. <\/p>\n\n\n\n

\u201cIf an acknowledgement of debt includes questionable or potentially unlawful charges, those charges will be open to challenge. Signing an AOD does not automatically make every line item enforceable.\u201d<\/p>\n\n\n\n

The judgment also highlights governance concerns, particularly where levy recovery processes appear to be driven largely by attorneys with limited oversight from trustees.<\/p>\n\n\n\n

\u201cFor the Court, the process appeared to be attorney-driven right from the early communications with the homeowner through to the structuring of the AOD,\u201d said Wasserman.<\/p>\n\n\n\n

\u201cThis prompted serious questions about whether trustees of the scheme had effectively ceded their oversight role.\u201d<\/p>\n\n\n\n

She stresses that responsibility cannot be delegated away. Trustees cannot abdicate responsibility simply because a matter has been handed to attorneys.<\/p>\n\n\n\n

\u201cThe ultimate accountability for fair and lawful governance always remains with the body corporate,\u201d she said.\u00a0The Court also raised concerns about the broader impact of excessive legal costs on homeowners.\u00a0<\/p>\n\n\n\n

The Court warned that excessive recovery fees can place homeowners under severe financial pressure and, in extreme cases, contribute to their property being attached or insolvency proceedings.<\/p>\n\n\n\n

\u201cThis judgment underscored a growing judicial sensitivity to the real-world impact of disproportionate levies and legal costs,\u201d she added.<\/p>\n","protected":false},"excerpt":{"rendered":"

A High Court ruling has sent a warning to bodies corporate and residential estates across South Africa about levy collection practices.<\/p>\n","protected":false},"author":92,"featured_media":856541,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[20832,853,23507],"class_list":["post-856537","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-estates","tag-south-africa","tag-vdm-incorporated"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/856537","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=856537"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/856537\/revisions"}],"predecessor-version":[{"id":856563,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/856537\/revisions\/856563"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/856541"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=856537"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=856537"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=856537"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}