What is the responsibility of the Community Scheme Ombud?
Category Sectional-title Advice
In South Africa, statistics show sectional-title properties such as complexes and apartments are growing in popularity among residents. According to Lightstone reports, this property type accounts for around 26.5% of all residential sales, and this is set to grow as we go into 2020. So with more people moving into sectional-title properties, it becomes more important than ever before to understand the various Acts and services such as the Community Schemes Ombud Service (CSOS).
In every sectional-title property, good governance is the cornerstone of a well-maintained building where residents are happy and proud to live. The Body Corporate and appointed trustees work in harmony and things get done right, for the betterment of the whole scheme. But of course, things are not always perfect - disputes arise, selfish interests may take the place of the collective good, and a lack of knowledge may lead to poor decision-making.
To avoid these scenarios and more, the CSOS was established in terms of the Community Schemes Ombud Service Act, 2011 (Act 9 of 2011) and the Sectional Titles Schemes Management Act, 2011 (Act 8 of 2011).
CSOS is a regulatory body that monitors and promotes the good governance of sectional-title schemes; develops and provides dispute resolution services; trains conciliators, adjudicators and other employees of the CSOS; and provides information and documentation to Bodies Corporate relating to the management of sectional-title schemes.
Besides sectional-titles, various other "living arrangements" qualify for CSOS including homeowners associations, retirement housing schemes, share block companies and housing cooperatives. In a nutshell, if there is the shared use of land, then CSOS applies.
One of the most important services performed by CSOS is resolving disputes, which is referred to as Alternative Dispute Resolution services. If an owner of a scheme has a dispute with another owner or any other person with a material interest in the scheme, they will be able to approach CSOS for help in resolving the dispute. The process will first require prior use of internal dispute resolution mechanisms, and if this proves ineffective, then only can CSOS take over. The first step will be professional conciliation, and if this fails, the matter will be referred to an adjudicator for a fast-tracked resolution.
However, there are limits to the jurisdiction CSOS has over disputes in sectional-titles. The dispute must fall into the following categories to qualify:
- Financial issues;
- Behavioural issues;
- Scheme governance issues;
- Management services and;
- Disputes regarding private areas and common areas
Important documents to monitor finances
There are various documents that a scheme must submit to the CSOS. This is for monitoring purposes and to ensure schemes are managing their funds correctly without unethical behaviour.
These forms include:
- Annual returns with a copy of the annual financial statements
- Annual submission Form CS 2
How is CSOS funded?
The implementation and everyday running of CSOS requires funding, which it receives from the levies of owners from sectional-titles on a sliding scale - ie - owners who pay higher levies contribute more towards CSOS with the maximum of R40 a month. However, owners who pay levies of R500 or less are exempt from this fee completely. There are also fees for conciliation and adjudication applications, which cost R50 and R100 respectively.
The importance of education and awareness
The CSOS Act places emphasis on education and awareness among the owners of sectional-titles. This is important in preventing unnecessary disputes which are created due to misunderstandings and a lack of information. Knowing more also creates a harmonious living environment as the owners are well aware of the rules to abide by, how to handle disputes and best management practices.
With years of experience managing sectional-title properties, De Lucia Group has become a highly trusted managing agent. To find out more about CSOS or concerns regarding your scheme, speak to us today.
Author: De Lucia Group