The Community Schemes Ombud Service
By Dr Carryn Melissa Durham
As the Regulations are currently with Parliament, it is hoped that they will be signed during the course of this year. It is for this reason that I will go back to basics in this blog post and discuss the main purpose for the establishment of the Community Schemes Ombud Service (“the Service”).
A crucial development in South African sectional title legislation occurred in 2011 with the promulgation of the Community Schemes Ombud Service Act 9 of 2011 (the “Act”). The Act will be administered by the Department of Human Settlements. The Act will only come into operation at a date fixed by the President by proclamation in the Gazette, which will be after the Regulations under this Act has been enacted. Furthermore, the provisions in the Act requiring consideration and determination by the Service will only come into operation at the date at which the Service is in full operation.
The rationale for the establishment of the Service is that there is no existing ombudsman for community schemes in South Africa. The regularisation of community schemes has, until now, been dealt with by fragmented regulations. There has been a lack of an effective dispute resolution mechanism. The time delays and costs relating to arbitration and litigation are high, and a barrier for many persons to deal with their disputes. Even minor disputes must 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 Service has marked the advent of a new regulatory regime.
The primary purpose of the 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.”
The functions of the Service are:
- to develop and provide a dispute resolution service;
- to train conciliators, adjudicators and other employees of the Service;
- to regulate, monitor and control such other scheme governance documentation as may be determined by the Minister; and
- 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.
In performing these functions the Service 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 Act.
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.
Ms Dinkie Dube, who has been appointed as the Adjudicator-General, reports that the Service has seen a steady inflow of applications for dispute resolution, although officially the service is not yet in operation. The nature of the disputes that have been lodged with CSOS, comprises behavioural issues, such as a neighbour who allegedly plays loud music; collection of levies incorrectly calculated; incorrect procedure followed in the election of trustees; irregular resolutions passed at general meetings and 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.
Thinking Inside the Box 
I couldn’t work out what the date of this article is. Is the CS Ombud Service operational yet (March 2017)?
Hi Fred,
The CSOS are indeed operational. Visit http://www.csos.org.za.
Kind regards,
Paddocks