This article will discuss the main purpose for the establishment of the Community Schemes Ombud Service (“the CSOS”). A crucial development in South African sectional title legislation occurred on 7 October 2016 when the Community Schemes Ombud Service Act 9 of 2011 (the “CSOS Act”) came into operation – this was the date on which the CSOS became operational as an ombudsman for community schemes. The CSOS is administered by the Department of Human Settlements.

The rationale for the establishment of the CSOS was that there was no existing ombudsman for community schemes in South Africa. The regulation of community schemes was, until 2016, dealt with by fragmented regulations. There was a lack of an effective dispute resolution mechanism. The time delays and costs relating to arbitration and litigation are high, and this acted as a barrier for many people to deal with their disputes. Even minor disputes had to be dealt with by initiating arbitration or litigation.

Furthermore, bodies corporate cannot approach the Small Claims Court, as only natural persons can initiate proceedings. There is a power and financial imbalance between individual property owners and the executive committees of the bodies corporate or home owners’ associations. The establishment of the CSOS has therefore marked the advent of a new regulatory regime.

Why was the CSOS established?

The primary purpose of the CSOS Act is to establish an efficient, cost-effective and independent dispute resolution service in respect of community schemes.

Community scheme” is defined as “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.”

What are the functions of the CSOS?

1. To develop and provide a dispute resolution service.
2. To train conciliators, adjudicators and other employees of the CSOS.
3. To regulate, monitor and control such other scheme governance documentation as may be determined by the Minister.
4. To take custody of, preserve and provide access electronically or by other means to sectional title scheme governance documentation, and such other scheme documentation as may be determined by the Minister by notice in the Government Gazette.

What are the goals of the CSOS?

In performing these functions the CSOS must promote good governance of community schemes; provide education, information, documentation and such other 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 right and obligations; monitor community scheme governance; and generally, deal with any such matters as may be necessary to give effect to the objects of the CSOS Act.

 

How to resolve a dispute?

In regard to the first function the Act provides for two methods of dispute resolution, namely conciliation and adjudication. In the conciliation process the parties use the services of an independent conciliator, to be appointed by the Chief Ombud, to assist parties to arrive at a mutually agreeable solution.

In the adjudication process, an independent adjudicator, appointed by the Chief Ombud, or selected by both parties from the list provided by the Ombud, determines how the dispute is to be resolved and makes a binding order to this effect.

Since the CSOS has become operational it has seen a steady inflow of applications for dispute resolution. The nature of the disputes that have been lodged with CSOS have been varied, and comprise behavioural issues, such as a neighbour who allegedly plays loud music; financial issues, such as collection of levies incorrectly calculated; general meeting issues, such as incorrect procedure followed in the election of trustees and irregular resolutions passed at general meetings; and physical issues, such as the installation of an inefficient security gate at the entrance of the scheme.

Paddocks is a specialist sectional title and home owners’ association law firm that provides education through online courses, workshops, books, consulting, community forums and more. For further information, visit  http://www.paddocks.co.za

By Dr Carryn Melissa Durham, Specialist Sectional Title & HOA Consultant BA (Law) LLB LLM LLD (Stellenbosch)

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