GOVERNANCE
CSOSA
COMMUNITY SCHEMES
OMBUD SERVICE ACT
NOW OPERATIONAL
ON 7 OCTOBER 2016, THE COMMUNITY
SCHEMES OMBUD SERVICE ACT 9 OF 2011
(CSOSA) CAME INTO FORCE. THIS ACT
IMPACTS ANYONE WHO OWNS PROPERTY
IN A COMMUNITY SCHEME.
A community scheme includes sectional title
developments, share block schemes, homeowners’
associations, retirement schemes or any other
arrangement in terms of which there is shared use of
and responsibility for parts of land and buildings. This
is the first time that legislation has been enacted with
a view to promoting good governance within community
schemes in South Africa.
An ombud service (“the Service”) has been established
in terms of the CSOSA, which serves two main functions.
Firstly, it helps to regulate, monitor and control the
quality of scheme governance documentation and acts
as a repository for scheme governance documentation
to ensure that the public has access thereto. In the
case of sectional title schemes, the Chief Ombud
must approve all amendments to the management
and conduct rules. The second function is to provide
a dispute resolution mechanism.
Disputes within a community scheme may be referred
to the Service for adjudication. The parties are first
required to try to negotiate a settlement through
conciliation but, if unsuccessful, the matter will be
referred to an adjudicator whose decision will be binding
and may be made an order of court.
The factual findings of the adjudicator cannot be taken
on appeal, with only points of law taken on appeal.
Generally, legal representation is not permissible unless
the adjudicator and all other parties consent or if the
adjudicator determines that a party cannot deal with
the adjudication without legal representation.
STEYN CITY PARKLAND RESIDENCE
The type of relief that may be granted in the dispute
resolution process is very broad and ranges, for
example, from a requirement that an association
records a new scheme governance provision, declares
a resolution purportedly passed at a meeting void
or invalid, to an order requiring the removal of an
animal from a community scheme, or an order that a
tenant in a community scheme must pay all or part
of the rentals payable under a lease agreement to the
association and not to his or her landlord. There are
a host of other types of relief that may be granted.
Each community scheme must pay a monthly levy to
the Service. The levy is calculated on a sliding scale,
increasing in a ratio proportionate to the monthly levy
charged to each property owner within the scheme. The
scheme levy is to be collected and paid by the body
corporate or the association, and an additional fee is
payable to the Service for making an application to
refer a dispute. If a matter proceeds to adjudication
then an additional fee is again payable, although
provision is made for the waiver of the application and
adjudication fees in the case of persons whose gross
monthly income is less than R5 500.
In order to promote good governance, the CSOSA
introduced the concept of scheme executives for any
person who is a trustee, director or other person who
exercises executive control of a community scheme
and sets standards for their conduct over and above
those already applicable in terms of common law or
any other applicable legislatio n such as the Companies
Act, 2008, and sectional title legislation.
It remains to be seen whether the CSOSA achieves
its objective. Much will depend on the strength of the
administration of the Service and the quality of decisions
reached in the dispute resolution process.
Lazelle Paola
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