What are “Community Schemes”?

The Community Scheme Ombud Service Act, 9 of 2011 (“the CSOS Act”) defines a “community scheme” or “scheme” to mean:

“any scheme or arrangement in terms of which there is shared use of and responsibility for parts of land and buildings, including but not limited to:

• a sectional titles development scheme,
• a share block company,
• a home or property owner’s association, however constituted, established to administer a property development,
• a housing scheme for retired persons, and
• a housing co-operative as contemplated in the South African Co-operatives Act, 14 of 2005″

The five types of community scheme mentioned in the definition are merely examples of community schemes. It is important to understand that these are not the only types of community schemes. Any scheme or arrangement, of whatever nature, that provides for shared use of and responsibility for parts of land and buildings is a community scheme.

Purposes of the CSOS Act

The Community Schemes Ombud Service Act, 9 of 2011 (“the CSOS Act”) provides for:

• the establishment of the Community Schemes Ombud Service (“the CSOS”), with detail of its mandate, management and functions; and
• a dispute resolution mechanism for administrative disputes that arise in community schemes and the collection of outstanding member contributions.

The independent CSOS employees must act impartially in assisting to resolve community scheme administration disputes. The CSOS is designed to provide an alternative, impartial and transparent service for the resolution of administrative disputes in community scheme.

Functions of the CSOS

The primary function of the CSOS is to provide a relatively inexpensive and efficient system to resolve administrative disputes that arise in community schemes. There are seven categories of administrative disputes:

• Financial
• Behavioural
• Scheme Governance
• Meetings and Resolutions
• Management Services
• Physical works
• General and Other

For more details of the orders available under each of these headings, click the “Start the Guide” button below. In addition, the CSOS has various other functions all of which exist to support its primary dispute resolution function. Details of these functions are set up in the “General information” tab above.

What are the special terms used by the CSOS?

The CSOS Act and its regulations introduce a specialised vocabulary of terms that apply to its operations.

What kind of disputes can the CSOS deal with?

The CSOS can deal with disputes in regard to the administration of a community scheme if:

• the dispute is between persons who each have a material interest in the scheme, and
• one of the parties to the dispute is the association or a scheme owner or occupier.

Examples of persons who have material interests in community schemes include, for example, executive committee members, owners, occupiers, bondholders and managing agents.

How does the CSOS deal with disputes?

Once the CSOS has received an application and confirmed that it has jurisdiction to deal with the dispute, it can arrange for conciliation and adjudication processes. Normally the CSOS will attempt conciliation before commencing an adjudication.

Conciliation

A dispute resolution process in terms of which a neutral and impartial third party, the conciliator employed by the CSOS, uses facilitative processes, techniques and methods of interacting with the parties. The purpose of the process is to engage with the parties, win their confidence and get them to interact, both with the conciliator and with each other. This is a structured attempt to help the disputing parties agree and commit to an agreement that sets out the things that each of them have agreed to do or not to do to resolve their disputes.

Adjudication

Process in which a neutral and independent adjudicator hears evidence and arguments from the parties involved in a dispute, and settles the dispute by making one or more binding orders.

How can applications be submitted to the CSOS?

The CSOS Act provides for the making of applications in both physical and electronic form. Regulation 19 (1) under that Act provides:

“An application referred to in section 38(1) of the Act must be made by submission of an application by physical delivery or electronically, in accordance with directive by the chief ombud published in the Gazette.”

Late applications

In terms of section 41 of the CSOS Act:

(1) An application for an order declaring any decision of an association or an executive committee to be void, may not be made later than 60 days after such a decision has been taken. (2) An ombud may, on good cause shown, condone the late submission of an application contemplated in subsection (1).

In calculating the number of days that has passed since the decision, you must exclude the date on which the decision was made. If the 60 day period expires on a Sunday or public holiday, the period is extended so that it expires on the next working day. An example of the type of “good cause” required to allow an ombud to condone the late submission of an application could, for example, include a situation where:

• the trustees of a sectional title scheme failed to distribute the minutes of the meeting as required under the prescribed management rules and the applicant therefore did not get the notice he or she was supposed to get that the resolution had been taken, or
• some person took steps that prevented the applicant coming to know of the decision that he or she now seeks to overturn.

Did you know: A CSOS adjudicator’s order can be made an order of the high or magistrates court, so that the creditor or successful party can proceed to enforce their proven claim using the machinery of the court system.

General information

Other than provide dispute resolution, the CSOS exists to:

• provide training for CSOS conciliators, adjudicators and other employees;
• regulate, monitor and control the quality of all sectional titles scheme governance documentation; and
• take custody of, preserve and provide public access electronically or by other means to sectional title scheme governance documentation.

The Minister of Human Settlements has the power to extend the CSOS’ mandate in regard to regulation, custody, preservation and quality control of the governance documentation for additional types of community schemes. In performing its functions set out above the CSOS must:

• promote good governance of community schemes;
• provide education, information, documentation and such services as may be required to raise awareness to owners, occupiers, executive committees and other persons or entities who have rights and obligations in community schemes, as regards those rights and obligations;
• monitor community scheme governance;

and the CSOS may generally deal with any other matters as may be necessary to give effect to the objectives of the CSOS Act. To implement its staff training function the CSOS must develop and identify training courses. For the training and provision of information to owners, occupiers, executive committees and other persons who have rights and obligations in community schemes, the CSOS must develop, identify and publicise education and information programmes.

Right of appeal

In terms of section 57 of the CSOS Act:

(1) An applicant, the association or any affected person who is dissatisfied by an adjudicator’s order, may appeal to the High Court, but only on a question of law. (2) An appeal against an order must be lodged within 30 days after the date of delivery of the order of the adjudicator. (3) A person who appeals against an order, may also apply to the High Court to stay the operation of the order appealed against to secure the effectiveness of the appeal.

Legal representation

In terms of section 52 of the CSOS Act:

The applicant and any other relevant person are not entitled to legal representation during the adjudication process unless— (a) the adjudicator and all other parties consent; (b) or the adjudicator, after considering—

(i) the nature of the questions of law raised by the dispute;

(ii) the relative complexity and importance of the dispute; and

(iii) the comparative ability of the parties to represent themselves in the adjudication, concludes that it would be unreasonable to expect the party to deal with the adjudication without legal representation.