A Paddocks Sectional Title Lifestyle Blog
By Prof. Graham Paddock
Most people know of the Community Schemes Ombud Service (CSOS) and that levies must be paid to fund its operations. In this article I will address some of the issues that are causing confusion.
From when are CSOS levies payable?
The CSOS Act and Regulations came into effect on 7 October 2016, and in terms of section 29(1)(b) of that Act all community schemes must pay levies to the CSOS. The Regulations that detailed the levies came into effect 90 days after the Act, so the CSOS levies are payable from 7 January 2017.
Who is liable to pay the CSOS levies?
The CSOS levies are not debts owed by individual owners to the CSOS. Even though the amounts of the levies and waivers of are calculated by reference to the contributions payable by individual owners, the total amount due by all owners in a community scheme is a debt payable by the scheme to the CSOS. Section 59(a) of the CSOS Act provides that every community scheme must pay the prescribed CSOS levies.
When are CSOS levies payable?
In terms of General CSOS Regulation 11(1) every community scheme must pay CSOS levies on a quarterly basis.
Can schemes insist that CSOS provide an invoice before they pay levies?
There is no provision in the CSOS Act or Regulations that requires the CSOS to issue schemes with invoices for levies. Schemes are legally obliged to remit levies to CSOS as soon as CSOS is in a position to accept payment. At this time CSOS does not have details of all community schemes. While its staff are trying to get as many community schemes as possible recorded on its database, this is an ongoing process.
What will happen if a scheme collects the levies but withholds payment to CSOS?
In terms of General CSOS Regulation 13 any community scheme which fails to pay a CSOS levy on the due date is liable to pay interest at a rate prescribed by the National Credit Act, 2005. This is likely to be a rate of 22% per annum on the basis that the debt arises from an incidental credit agreement.
Community scheme executives should:
Paddocks has designed a free, online guide to assist you in understanding the CSOS, the types of orders it can grant and the process of putting together an application for dispute resolution. Click here to visit the guide and minimise the chance of your order being rejected unnecessarily.