Ombudsman vs Litigation in community schemes | What the court has ruled
25 June 2026
Sarah’s Socials | Post 8
Summervale Lifestyle Estate is a retirement village in Strand, Western Cape. It was built in phases, on a piece of land called “Erf 5”, starting with 162 freestanding cluster homes (Phase 1) and later 78 sectional title flats and a care centre (Phase 2). When the City of Cape Town approved the development, it required the residents to form a Homeowners' Association (“HOA” referring to the “Summervale HOA”) and adopt a formal constitution to govern the estate.
A few years later, the developer obtained permission to rezone a neighbouring piece of land (“Erf 6”) and build 55 garden cottages there. The rezoning approval came with a condition: Erf 6 must resort under the Summervale HOA and their constitution be amended accordingly. Notably, the Summervale HOA was not a party to this application and not formally bound by this condition. From 2014, the garden cottages were physically integrated with the rest of Summervale, sharing the same entrance, roads and security. The developer sold Erf 6 to Parch Properties 72 (Pty) Ltd (“Parch”) in 2015-2016.
Despite this practical integration, the HOA's constitution still defined the estate's "Area" as Erf 5 only. Under clause 5.1, only registered owners of properties within that "Area" could be HOA members. Erf 6 was not included.
In 2021, a group of existing Summervale residents (“the Venter group”) formally raised the issue, arguing the garden cottages did not fall within the HOA's boundaries. Two attempts were made to amend the constitution to include Erf 6: one in April 2022 by round robin ballot, and another in June 2022 at a meeting. Both failed. The first achieved 68% support, short of the 75% required. The second was rejected by a large majority. A petition opposing the amendment was signed by 97 members.
Unable to obtain the votes, Parch went to the Western Cape High Court. It asked the court to declare that the garden cottages already fell within the HOA's boundaries, or alternatively, to use a special power under the Community Schemes Ombud Service Act 9 of 2011 (“the CSOS Act”) to override the failed vote on the grounds that the opposition was unreasonable. By the time the matter reached the Supreme Court of Appeal (“the SCA”), Parch had dropped all other arguments and focused only on the last point, the unreasonable opposition claim.
What is the relevance?
This case raised two distinct questions:
1. The procedural question: Can a person go straight to the High Court with a community scheme dispute, or must they first go through the Community Schemes Ombud Service (“CSOS”)?
2. The substantive question: Was the Venter group's refusal to vote for the constitutional amendment unreasonable enough that a court should step in and override the democratic outcome?
What does the law say?
The CSOS Act created the CSOS as a body specifically designed to resolve disputes in community schemes like sectional title schemes and HOAs. The CSOS process is meant to be faster, cheaper, and less formal than going to court.
Section 38(1) of the CSOS Act says that any person who is a party to, or affected by, a dispute in a community scheme "may" make an application to the Ombud. The key word is "may." It does not say "must." This became central to the jurisdiction debate.
Section 39(4)(d) of the CSOS Act gives the CSOS (and by extension, a court) a special power: where a motion failed to pass because of unreasonable opposition, the decision-maker can declare that the opposition was unreasonable and give effect to the motion anyway, either as originally proposed or in a modified form. What counts as "unreasonable" is not defined in the CSOS Act and is left to the judgment of the CSOS or court applying the facts.
On the question of whether people must use the CSOS before going to court, two competing principles were at play. On one side, the CSOS Act was designed to be a dedicated, accessible forum for exactly these kinds of disputes, and there is a general legal principle that where a specialist tribunal exists, parties should use it. On the other side, South African law has a strong presumption against taking away the High Court's inherent jurisdiction.
Courts have consistently held that a statute must use clear language before it will be read as blocking people from going to court. The parties disagreed about which principle should win here.
On reasonableness, South African courts have developed a test through caselaw: the assessment is objective, not subjective. It does not matter what individual owners personally felt or intended: the question is whether, looking at all the facts and circumstances from the outside, the opposition had a logical and understandable basis. Importantly, an opposition can be understandable without necessarily being the "correct" or best outcome. Where the threshold sits, how strong a reason is needed before opposition becomes unreasonable, is a question of degree that depends heavily on the specific facts.
The court-vs-CSOS debate
Parch argued that going straight to the High Court was perfectly valid. The CSOS Act uses the word "may," which it said gives people a free choice between the CSOS and the courts. There is no requirement to exhaust the CSOS route first.
The Venter group disagreed. They argued that the CSOS was created precisely for disputes like this one, and that Parch was jumping the queue by going to the High Court without first trying the cheaper, more accessible route Parliament had specifically designed for community scheme members.
Was the opposition unreasonable?
Parch's case was that the Venter group had no good reason to block the amendment. The garden cottages had been part of Summervale in every practical sense for years, with shared security, shared roads, shared access. Parch had paid levies since 2010, its director had served as a trustee since 2015, and everyone had treated Erf 6 as Phase 3 of the Summervale HOA. Blocking the formal recognition of this reality was, Parch said, unreasonable.
The Venter group provided the below reasonings:
The Summervale HOA constitution was clear: membership was limited to owners on Erf 5. Erf 6 was a separate piece of land, separately approved, and the HOA was never a party to those planning decisions. The rezoning condition that referred to the HOA was a matter between the developer and the City of Cape Town, it did not bind the HOA's members.
The real issue was money. If Parch became a full member of the HOA, it would gain a share of ownership in the HOA's common property, which had an estimated value of approximately R60 million, without paying anything for it. The Venter group was not opposed to Parch using the estate's facilities and paying for the privilege. They were opposed to effectively handing over a share of that R60 million asset for free.
Concerns about the character of the estate. Summervale HOA is a retirement village. The garden cottages on Erf 6, however, were being rented out to tenants of any age, with no retirement-age requirement. Existing members had chosen Summervale specifically for its retirement environment and felt that unrestricted admission of Erf 6, with its mixed-age tenants, would undermine what they had bought into.
Alleged that some HOA trustees were also linked to Parch, creating a conflict of interest, and that those trustees had pressured members to support the amendment with threats of litigation. This led one respondent to open criminal charges of extortion.
Conclusion | Parch lost
On the court-vs-CSOS question, the SCA came down firmly on the side of choice. The word "may" in section 38(1) means what it says: people can choose whether to go to the CSOS or to court. The High Court has inherent jurisdiction over disputes like this one, and the CSOS Act does not take that away. Parch was entitled to approach the High Court directly, and the High Court was right to hear the matter.
This is an important finding for community scheme members generally: you are not forced to use the CSOS. You have a choice of where to take your dispute.
That said, the CSOS remains the cheaper and faster option for most people, the court route comes with legal costs and delays that the CSOS process was specifically designed to avoid.
On reasonableness, the SCA sided with the Venter group. The undisputed fact that Parch rented the garden cottages to people of any age, without any retirement restriction, was enough. Summervale's retirement character was a legitimate concern, and Parch had not disputed the allegation. Taken together with the Venter group's well-founded distrust of the process, the conflicts of interest, the alleged pressure tactics, the court found the opposition was objectively reasonable.
The SCA added a note of caution to both sides: the parties had a real opportunity to reach a mutually satisfactory arrangement if they approached the matter in a spirit of conciliation rather than confrontation.
But that was an observation, not an order. The bottom line was that Parch lost. The appeal was dismissed with costs.
As always, if your scheme needs guidance on how to navigate this, reach out to us at info@tvdmconsultants.com or call 061 536 3138. We are here.
About the author
Sarah Sydenham is a community schemes consultants at TVDM Consultants.
Sarah is also an admitted attorney, brings a well-rounded legal background and a passion for community schemes to her role.
Learn more about Sarah Sydenham.
