Centenario Body Corporate v Mlotya (2024/136216) [2026] ZAGPJHC 263 (10 March 2026)
Levy recovery is the financial lifeblood of sectional title schemes. When owners fall into arrears, every unit owner feels the effect—maintenance is delayed, service providers go unpaid, and the scheme’s stability is threatened. South African law expects bodies corporate to manage and fund the scheme responsibly through levies and proper financial administration.
But a recent Johannesburg High Court decision has delivered a clear message: how levy arrears are recovered matters, and the courts will not automatically enforce debt-collection models that appear to generate questionable charges, obscure the underlying account, or produce legal costs wildly out of proportion to the debt.
In Centenario Body Corporate v Mlotya, the body corporate pursued summary judgment based on an acknowledgment of debt (AOD) for R17,981.86. The court refused to grant summary judgment and instead granted the owner leave to defend, identifying bona fide triable issues—including disputes about payment allocation, allegedly illegitimate charges (including water charges), and significant attorney-driven costs.
What happened in the case
The matter arose from a familiar sectional title scenario: a homeowner fell behind on levies, signed an AOD as part of a “debt management solution,” and later disputed how payments were handled and what exactly was being charged on the running account.
The owner alleged that payments made under the AOD were appropriated to other items of alleged indebtedness, and that the scheme exposed the owner to “numerous illegitimate charges”, with particular concern about attorney-related charges and prima facie illegitimate water charges. The judge held that these allegations raised triable issues that must be ventilated at trial, making summary judgment inappropriate.
The court also noted the broader context: a claim of roughly R18,000 being pursued in the High Court, where the costs of litigation can quickly exceed the principal debt, raising questions about proportionality and fairness.
Why the court refused summary judgment
Summary judgment exists to prevent defendants from delaying a matter with a sham defence. It is not designed to shut out genuine disputes that require evidence and cross-examination.
Here, the court found multiple disputes that were not cosmetic. Among the most significant:
1) Alleged unlawful or illegitimate charges on the account
The judge accepted, at least on a prima facie basis, that illegitimate water charges and other questionable items could be present on the account and that this alone was a triable issue.
2) Whether the body corporate could “create” charges through the AOD mechanism
The court questioned whether it is competent for a body corporate to impose unlawful charges on homeowners as part of a payment scheme linked to ownership in the scheme.
In other words, the court signalled that an AOD should not be used as a tool to legitimise charges that the body corporate could not lawfully charge in the first place.
3) Disproportionate litigation for a small debt
The judge described the relatively small amount claimed in the High Court context as “cause for concern,” stating that pursuing a little over R17,000 in the High Court was prima facie uneconomical when regard is had to costs.
4) Attorney-driven debt collection and governance concerns
Perhaps the most striking feature of the judgment is its concern that the body corporate’s attorneys appeared to be effectively running the recovery process—potentially displacing the body corporate’s own governance role and statutory responsibilities in managing the scheme fairly.
The court observed a model in which AODs are standardised, the process is driven from “hand-over” onward by attorneys, and summary judgment is used as the engine to convert levy arrears and disputed charges into enforceable judgments—often accompanied by steep attorney-and-client costs.
The judge noted that, in this case, attorney costs appeared to eclipse the claim by at least five-fold, creating a risk of a “costs spiral” for financially stressed owners.
The court went as far as to say that the approach might arguably amount to an abuse of the High Court process, although it did not need to decide that question at the summary judgment stage.
The outcome
The court granted the owner leave to defend and ordered costs in the cause.
The judgment was marked “of interest to other judges,” signalling that the court considered its observations relevant beyond this one matter—particularly because the attorneys involved appeared to set similar matters down frequently on summary judgment rolls.
Why this ruling matters for sectional title schemes
This judgment does not say levy arrears should not be collected. On the contrary, bodies corporate must remain financially functional, and levy compliance is essential.
What the ruling does is underline a principle that is increasingly important in modern sectional title governance:
Levy recovery must be lawful, proportionate, and transparently administered—especially where additional charges and legal costs are being loaded onto an owner’s account.
Likely consequences going forward
1) AODs will not be treated as “bulletproof”
Bodies corporate and their attorneys often rely on AODs to streamline recovery. This judgment makes it clear that an AOD does not automatically erase disputes about what sits underneath the debt—particularly where the owner raises plausible disputes about payment allocation or unlawful charges.
2) Increased judicial scrutiny of proportionality
Where the debt is relatively small, courts may increasingly interrogate why the High Court was chosen and whether the recovery method is proportionate to the claim, especially when legal fees dwarf the principal debt.
3) More focus on trustees’ oversight and governance
The STSMA places scheme management responsibilities in the hands of the body corporate (and practically, its trustees), and this judgment warns against models where that role appears to be ceded to external debt collection systems driven by attorneys.
4) Greater risk for “debt management solutions” that load charges onto owners
Schemes that rely on standardised AODs, aggressive attorney-and-client cost provisions, and rapid High Court escalation may face pushback—particularly if those AODs are used to introduce charges that are not clearly grounded in the scheme’s lawful charging powers.
5) Owners may be more willing (and better equipped) to defend
The judgment effectively signals to owners: if you have proof of payments, can identify questionable charges, and can demonstrate a genuine dispute on the account, you may have a bona fide defence that cannot be brushed aside through summary judgment.
Practical lessons (for bodies corporate, managing agents, and owners)
For bodies corporate / trustees
- Keep direct oversight of recovery decisions and ensure proper authorisation for litigation steps.
- Ensure the running account is clear, lawful, and auditable—especially municipal and water-related charges.
- Treat legal recovery as a governance function, not an outsourced “black box.”
For attorneys and managing agents
- Re-check the proportionality of High Court recovery for small debts.
- Avoid recovery structures where fees become the dominant feature of the claim.
For owners
- Keep proof of payments and insist on a full account breakdown where charges are disputed.
- Do not assume an AOD prevents you from raising legitimate disputes about unlawful or misallocated charges.
Conclusion
Centenario Body Corporate v Mlotya is a significant cautionary judgment: it keeps levy recovery lawful, transparent and proportionate, and it warns against attorney-driven models that risk turning levy arrears into escalating litigation costs.
This article is general information and not legal advice. For advice on a specific dispute, consult a qualified attorney.