Thinking Inside the Box

A Paddocks Sectional Title Lifestyle Blog

Home Owners’ Associations – What applies?

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By Zerlinda van der Merwe

Since the Sectional Titles Schemes Management Act (“the STSMA”) and the Community Schemes Ombud Service Act (“the CSOSA”) came into operation on 7 October 2016, we have been asked whether, and to what extent, these statutes apply to home owners’ associations (HOA’s), either established in terms of the Common Law, or registered as non-profit companies in terms of the Companies Act.

Sectional Titles Schemes Management Act 

We will first answer this question in light of the STSMA. The STSMA and its Regulations (containing the prescribed management and conduct rules), applies only to sectional title schemes. Bodies corporate which form part of HOA’s are also administered and managed in terms of the STSMA, within the framework of the relevant governance documentation of the master HOA.

Community Schemes Ombud Service Act

We will now look at the CSOSA. The CSOSA, its Regulations, and the Schedule to the Regulations: Levies and Fees, are applicable to all community schemes, including HOA’s.

Section 1 of the CSOSA defines a “community scheme” 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 title 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.

The CSOSA, in its entirety, is applicable to HOA’s. Therefore, as a member, trustee or director of an HOA, you must ensure that you and your HOA complies with the provisions of the CSOSA, its Regulations and the Schedule of Fees.

Requirements

We will finally look at some of the requirements under the CSOSA that must be complied with. As an owner of an erf within an HOA, your HOA must collect a prescribed monthly levy from you, which will in turn be collected from your HOA by the Community Schemes Ombud Service (“CSOS”) on a quarterly basis, commencing on 1 April 2017.

The trustees or directors must further ensure that the HOA is registered with the CSOS, and that copies of the prescribed documents, such as the HOA’s annual return, annual financial statements and governance documentation, being either the constitution or memorandum of incorporation, is submitted to CSOS along with the registration of the HOA. It’s important to note that should the HOA’s Constitution be amended by the members, the approval and lodgement thereof to the local municipality is still required. Similarly, if the memorandum of incorporation is amended, it must still be submitted to the Companies and Intellectual Property Commission (“CIPC”).

The CSOS may be approached, should there be a dispute between member/s or tenant/s and the HOA, or the HOA and its member/s or tenant/s, or between members, and all internal remedies have been exhausted. There is a prescribed complaint form to be completed and a process to be followed, in order to obtain the relief sought on one or more of the prescribed grounds.

Should you have any queries relating to this topic, contact us via email at consulting@paddocks.co.za or telephonically on 021 686 3950, for a non-obligation quote. Alternatively, contact us telephonically for a 10 minute telephonic consultation at a cost of R390.00 (incl. VAT).

Image source: thinkhomesandland.files.wordpress.com

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2 comments on “Home Owners’ Associations – What applies?

  1. KAREN MILES
    May 10, 2017

    Hi,

    Do STS have to pay 2 CSOS levies if within an HOA?

    thanks

    • Paddocks
      May 17, 2017

      Dear Karen,

      Thank you for your comment. We are more than happy to help, however we do not give free opinions / advice. Please email us on consulting@paddocks.co.za with regards to your matter, and we can provide you with a no-obligation quote, so that we can assist you.

      Kind regards,
      Paddocks

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