Can a Body Corporate disconnect water and electricity services for non payment of levies

Introduction

We often receive inquiries from Bodies Corporate regarding their rights to disconnect utilities for owners who are in arrears with their levies. The case of Lion Ridge Body Corporate v Alexander; Lion Ridge Body Corporate v Morata; Lion Ridge Body Corporate v Mukona and Another (17074/2022; 18106/2022; 19220/2022) [2022] ZAGPJHC 713 (21 September 2022) directly addresses this issue: Can a Body Corporate within a sectional scheme disconnect water and electricity services for non-payment of levies? This article examines the case, outlining its key facts and the court’s findings, and explores the legal complexities surrounding this matter.

Facts

In this case, the Lion Ridge Body Corporate (“Lion Ridge” and/or “the scheme”) sought a court order to recover arrear levies, water, and electricity charges from certain property owners in the scheme. Beyond seeking a judgment for the outstanding amounts, Lion Ridge also requested permission to disconnect electricity and limit water supply to the defaulting owners’ units until the debts were settled. Additionally, Lion Ridge sought to impose costs on these owners for the disconnection, limitation, and potential reconnection of utilities. Lion Ridge argued that, under the Sectional Titles Schemes Management Act 8 of 2011 (the “STSMA”), it had the authority to manage the common property and enforce the rules of the scheme. It cited sections 4(h) and 4(i) of the STSMA, claiming that these provisions gave it the right to enter into agreements with owners for utility services and to take action to enforce these agreements. However, Lion Ridge did not specify the terms of the alleged agreements or rules it sought to enforce.

Lion Ridge is in principle entitled to claim judgment for outstanding levies. The power to do so is an incident of section 4(i) of the STSMA, read with Prescribed Management Rule 25 (“PMR”) of the Regulations to the STSMA. The Management and Conduct Rules will apply to most bodies corporate by operation of law. However, the issue of disconnecting or limiting utilities raised more complex concerns:

Lack of legal authority for disconnection

Neither the STSMA nor the PMR’s and Conduct Rules grant a Body Corporate the authority to interfere with a member’s utility supply. Lion Ridge did not cite any other common law or statutory power that would justify such actions. Importantly, Lion Ridge did not establish that it had adopted a rule or entered into an agreement with the owners that permitted the disconnection of utilities for non-payment of levies.

Absence of Explicit Agreement or Rule

While it may seem reasonable to assume that a Body Corporate could withhold services to recover debt, the legal framework governing sectional title schemes requires clear agreements or rules for such actions. Lion Ridge had neither introduced such a rule nor demonstrated the existence of an agreement that allowed it to disconnect utilities upon non-payment.

Failure to Comply with Procedure

PMR 25 of the Regulations to the STSMA outlines the procedure for collecting arrears, including providing written notice to members of the amounts owed and the details of a dispute resolution process. Lion Ridge failed to show compliance with these requirements, which would have been necessary before taking further action.

Constitutional Considerations

Additionally, and probably most importantly, the relief that Lion Ridge claimed implicated a delicate web of constitutional rights. These are the right against arbitrary deprivation of property (section 25 of the South African Constitution), the right to sufficient water (section 27(1) b) of the Constitution), the public law right to receive electricity from a municipality, even where the electricity is transmitted through an intermediary such as a landlord or a Body Corporate.

Relief limiting these constitutional rights is plainly incompetent if it is not authorised by law. The form which that “law” might take, depends on the facts of a particular case. In this matter, the very least that Lion Ridge would have had to establish was that there was a provision to that effect in the STSMA, or a rule of the Body Corporate, or a term in an agreement with the owners that authorises it to do that. Lion Ridge did not allege any of this in the present matter.

As a result of the above, the application was dismissed.

In Conclusion: Can a Body Corporate disconnect utilities?

The Lion Ridge case underscores the importance of adhering to the legal framework when attempting to limit or disconnect utilities for non-payment within a sectional title scheme. While the need to recover debts is acknowledged, constitutional rights including property rights and access to water, and electricity, must be respected. Any relief affecting these rights must be explicitly authorised by law.

To view the Lion Ridge judgment, please click the link below:

https://www.saflii.org/za/cases/ZAGPJHC/2022/713.html

If you are interested in seeking our legal advice on the above matter, please email info@tvdmconsultants.com or contact 061 536 3138 today!

Meet the Author

Rizaar Smidt is a Community Schemes Consultant at TVDM Consultants, to read more about Rizaar, click here.

Disclaimer: This article is the personal opinion/view of the author(s) and is not necessarily that of TVDM Consultants. The content herein is for information purpose only, and should not be seen as an exact or complete exposition of the law. Accordingly, no reliance should be placed on the content for any reason whatsoever, and no action should be taken on the basis thereof unless the application and accuracy has been confirmed by a legal advisor. TVDM Consultants and the author(s) cannot be held liable for any prejudice or damage resulting from action taken on the basis of this content.