Africa-Press – South-Africa. A recent High Court ruling made it clear that courts may block enforcement where levy collection costs spiral out of proportion to the debt itself.
This was confirmed in the matter of Centenario Body Corporate v Thandeka Mlotya, which was heard by the Johannesburg High Court.
In its 10 March 2026 ruling, the court refused to grant judgment against a homeowner who owed just under R18,000 in unpaid levies after legal costs escalated to almost five times the original amount claimed.
VDM Incorporated’s director of community schemes and compliance, Johlene Wasserman, said the case has sparked renewed scrutiny of levy recovery practices in sectional title schemes.
This is especially because courts are now seemingly attaching as much importance to proportionality and governance as to the recovery of the debt itself.
According to Wasserman, this ruling reflects growing judicial concern about how body corporates pursue levy arrears.
“Levy arrears are the financial lifeblood of community schemes, yet this judgment is a clear warning that recovery processes cannot be allowed to run out of control,” she said.
“Courts are not prepared to simply rubberstamp enforcement where legal costs appear excessive or poorly supervised.”
The judgment comes at a time when levy recovery disputes are increasingly under the spotlight, as rising legal costs place pressure on defaulting owners, trustees and managing agents responsible for governance.
“The 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,” she said.
What began as a relatively modest levy claim evolved into a far more complex dispute once it reached the High Court, Wasserman explained.
“As the matter progressed, the legal fees escalated dramatically, prompting the court to examine whether the costs being claimed were lawful, reasonable, and proportionate,” she said.
The court found that the case was no longer solely about unpaid levies but had become a dispute over whether the costs themselves could be justified.
“On that basis, the homeowner was granted leave to defend the claim rather than facing immediate judgment,” she said.
Acknowledgements of debt are not a blank cheque
Wasserman explained that a key issue for the court in this case was the use of acknowledgements of debt (AODs), which are commonly relied on by bodies corporate to formalise repayment arrangements with owners in arrears.
“The court made it clear that an AOD is not a blank cheque. If an acknowledgement of debt includes questionable or potentially unlawful charges, those charges will be open to challenge,” she said.
“Signing an AOD does not automatically make every line item enforceable.” The ruling made it clear that bodies corporate that rely on standard‐form AODs are at risk.
It is essential that they carefully review the legality and proportionality of each cost component, particularly where recovery processes are driven primarily by legal representatives.
The judgment also raised governance red flags where levy recovery processes appear to be heavily attorney‐led, with limited oversight by trustees themselves.
According to Wasserman, the court questioned whether trustees were exercising meaningful control over the recovery process.
“For the court, the process appeared to be attorney‐driven right from the early communications with the homeowner through to the structuring of the AOD,” she said.
“This prompted serious questions about whether trustees had effectively ceded their oversight role. Trustees cannot abdicate responsibility simply because a matter has been handed to attorneys.”
She added that the ultimate accountability for fair and lawful governance always remains with the body corporate.
A warning against legal cost spirals
Significantly, Wasserman said, the court expressed concern about the broader consequences of unchecked legal cost escalation.
“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,” she said.
“This judgment underscores a growing judicial sensitivity to the real‐world impact of disproportionate legal costs. Yes, it is essential to recover levies, but the process has to be fair, transparent, and defensible.”
The case made a few things clear. First, courts may refuse to enforce where the legal costs are disproportionate to the levy arrears.
Acknowledgements of debt also do not automatically legitimise unlawful or excessive charges, and trustees remain accountable for oversight, even where attorneys manage recovery.
For trustees, managing agents, and property practitioners, Wasserman stressed that levy recovery strategies must be properly supervised, proportionate to the debt, and capable of withstanding judicial scrutiny.
“In today’s regulatory and judicial environment, the way a debt is recovered can be just as important as the debt itself. Bodies corporate that ignore this risk turn routine collections into costly legal setbacks,” she warned.
Looking ahead, she said the judgment will influence how levy recovery matters are approached, with greater emphasis on measured, transparent processes that balance enforcement with fairness.
For More News And Analysis About South-Africa Follow Africa-Press
