By Auren Freitas dos Santos
The recovery of legal costs from defaulting owners remains one of the most contentious issues in sectional title schemes.
Prescribed management rule 25 appears, at first glance, to provide a relatively straightforward framework. A member is liable for reasonable legal costs incurred by the body corporate in collecting arrears or enforcing compliance, but only insofar as those costs have been “taxed or agreed”. The body corporate may also not simply debit an owner’s account with an amount that is not a contribution or charge authorised by the legislation or rules, unless the owner has consented or the amount has been authorised by a judgment or order.
The practical difficulty is obvious: when, precisely, has an owner “agreed” or “consented” to the legal costs?
The South Gauteng High Court’s judgment in SS Glen High v Kruger NO provides an important—and potentially far-reaching—answer. According to the Court, the necessary consent may already be contained in the scheme’s rules.
The dispute
The body corporate applied for summary judgment against the executor of the estate of a former owner for an amount of R322,966.82. The amount comprised outstanding levies, CSOS levies, special levies, interest and legal costs.
One of the defences raised was that the legal costs included in the claim had not been taxed or agreed and therefore did not constitute a liquidated amount capable of being recovered by way of summary judgment.
The Court was consequently required to consider prescribed management rules 25(4) and 25(5).
Prescribed management rule 25(4) provides that a member must pay the body corporate all reasonable legal costs and disbursements, as taxed or agreed by the member, incurred in collecting arrears or enforcing compliance with the legislation and rules.
Prescribed management rule 25(5), in turn, prohibits the body corporate from debiting a member’s account with an amount that is not a contribution or an authorised charge without the member’s consent or the authority of a judgment or order.
The Court considered the well-known Supreme Court of Appeal decisions in Barnard NO v Regspersoon van Aminie en ‘n Ander and Body Corporate, Marsh Rose v Steinmuller and Others.
In these judgments, the Supreme Court of Appeal confirmed that legal costs incurred by a body corporate in recovering amounts owed by an owner fall within the protection afforded by section 15B(3)(a)(i)(aa) of the Sectional Titles Act. A body corporate may therefore insist on payment of those costs before issuing a levy clearance certificate.
The Court in SS Glen High interpreted the Supreme Court of Appeal’s repeated reference to “legal costs incurred” as supporting the conclusion that legal costs already incurred by a body corporate need not necessarily be taxed before they may be recovered from an owner.
It reasoned that there is a distinction between:
- legal fees claimed by an attorney from the attorney’s client, which ordinarily require taxation before they become a liquidated debt; and
- legal costs that the body corporate has already incurred and seeks to recover from an owner under an existing obligation to reimburse the body corporate
On this reasoning, once the body corporate has incurred and quantified the costs, the amount is capable of determination and may constitute a liquidated amount for purposes of summary judgment.
That part of the judgment aligns with the principles laid down by the SCA. The more interesting finding, however, concerns the meaning of “agreed” and “consent” in prescribed management rules 25(4) and 25(5).
Can consent be contained in the rules?
The conduct rules of the scheme provided that, where the body corporate or trustees instructed attorneys in connection with an infringement of the rules, the relevant occupant would be liable to reimburse the body corporate, on demand, for all legal costs incurred on the attorney-and-client scale.
The Court held that an owner becomes bound by the scheme’s rules upon becoming a member of the body corporate. The owner had therefore consented or agreed, through the rules, to reimburse the body corporate for the legal costs covered by the rule.
The Court stated:
“The conduct rules are rules that the Respondent consented to upon becoming a member. There is an underlying agreement to be bound by it.”
It consequently found that the rule satisfied the “agreed” and “consent” requirements contained in prescribed management rules 25(4) and 25(5). The legal costs did not need to be separately agreed with the owner or taxed before being included in the body corporate’s claim.
This is the central significance of the judgment.
According to the Court, prescribed management rule 25 does not necessarily require the owner to provide fresh or transaction-specific consent whenever legal costs are incurred. Where the scheme’s validly adopted rules clearly impose liability for those costs, the owner’s obligation to comply with the rules may itself constitute the required consent or agreement.
Why the judgment matters
Many bodies corporate presently debit legal costs to owners’ accounts on the assumption that prescribed management rule 25(4) automatically authorises them to do so.
That assumption is questionable.
Rule 25(4) establishes a member’s potential liability for reasonable legal costs, but it expressly refers to costs “as taxed or agreed”. Rule 25(5) separately restricts the body corporate’s ability to debit amounts to an owner’s account without consent or an authoritative order.
The significance of SS Glen High is that it identifies a possible bridge between these requirements. A properly framed rule may constitute the owner’s advance agreement to reimburse the body corporate for legal costs incurred in defined circumstances.
This may substantially strengthen the position of a body corporate where its rules expressly provide that an owner is responsible for legal costs incurred:
- in collecting arrear contributions or other amounts;
- in enforcing compliance with the legislation or the scheme’s rules;
- as a result of a contravention by the owner, occupier or visitor; and
- on a specified scale, such as the attorney-and-client scale
A vague provision stating merely that an owner may be held liable for “costs” will not necessarily achieve the same result. The wording should identify when liability arises, whose conduct triggers the liability, which costs are recoverable and the applicable scale.
A potentially controversial interpretation
The Court’s conclusion that an owner “consents” to the rules upon becoming a member is practical, but it is not beyond debate.
Owners are bound by the legislation and rules as a matter of law. It does not necessarily follow that this statutory binding effect is identical to personal consent in the ordinary contractual sense. One could argue that, if mere membership and the existence of a rule were always sufficient, the express consent safeguard in prescribed management rules 25(4) and 25(5) would have a considerably narrower function.
The judgment also appears to move beyond the precise issue determined by the Supreme Court of Appeal in Marsh Rose. That matter concerned the amounts that could be secured through the statutory embargo on transfer. It did not definitively decide every question relating to the debiting of untaxed legal costs to an owner’s levy account.
The finding should therefore be applied with care. Nevertheless, until another court takes a different approach, SS Glen High provides meaningful authority for the proposition that a clearly drafted legal-costs provision in a scheme’s rules may satisfy the consent and agreement requirements of prescribed management rules 25(4) and 25(5).
The conflicting CSOS position
A further practical difficulty arises from the CSOS Consolidated Practice Directive issued in July 2025, approximately ten months after the SS Glen High judgment. The Directive regards rules that seek to debit or charge members without their consent, or without the authority of a judgment or order by a judge, adjudicator or arbitrator, as undesirable.
The difficulty with this position is that it appears to contradict the central finding in SS Glen High: namely, that a valid rule imposing liability for legal costs may itself constitute the member’s consent or agreement for purposes of prescribed management rules 25(4) and 25(5). The Directive appears to assume that consent must be obtained separately from the rules, whereas the Court expressly found that an owner’s agreement to be bound by the rules may satisfy the consent requirement.
In our view, this aspect of the Directive is untenable and should be reconsidered by CSOS. A distinction should be drawn between a rule that permits trustees unilaterally to impose arbitrary or unspecified charges and a carefully drafted rule recording members’ advance agreement to reimburse the body corporate for reasonable legal costs actually incurred in defined circumstances.
The immediate practical problem is that schemes wishing to adopt such a rule are likely to encounter resistance from CSOS during the certification process. Despite the authority provided by SS Glen High, CSOS may refuse to approve the rule on the basis that it is undesirable. Unless CSOS revises its position—or its approach is successfully challenged—schemes may therefore be prevented in practice from adopting the very type of rule that the Court held could satisfy the statutory consent requirement.
The practical takeaway
Bodies corporate should review their rules before assuming that legal costs may be debited to an owner’s account.
Where the rules clearly provide that an owner must reimburse the body corporate for reasonable legal costs actually incurred in collecting arrears or enforcing compliance, the SS Glen High judgment supports the argument that the owner has already agreed or consented to that liability by becoming and remaining a member of the scheme.
Conversely, where no such rule exists, or where the wording does not cover the particular costs, the body corporate should be cautious about debiting those costs without taxation, express agreement or an appropriate judgment or adjudication order.
The judgment therefore does more than expand on Marsh Rose. It highlights the important role that a scheme’s own rules play in determining whether legal costs are legally recoverable from the defaulting owner.
If you have any questions regarding this topic or require assistance drafting suitable conduct rules, feel free to contact us at info@theadvisory.co.za for a no-obligation quote.
Specialist Community Scheme Attorney (LLB, LLM), Auren Freitas dos Santos, is a Director of The Advisory, a boutique consultancy specialising exclusively in community schemes law. Reach out to him via email at info@theadvisory.co.za for a no-obligation quote to discuss this topic in more detail.
