The various changes to community schemes | Legal Articles


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The various changes to community schemes

The Community Schemes Ombud Service Act

The Community Schemes Ombud Service Act (CSOSA) came into effect on 7 October, together with the related Sectional Titles Schemes Management Act. 

CSOSA applies to all Community Schemes, as well as, sectional title development schemes, homeowner associations, property owners associations, share block companies, retirement housing schemes, housing co-operatives and any other scheme or arrangement in terms of which there is shared use of and responsibility for parts of land and buildings. 

Community Scheme Rules

The CSOSA brought into effect a new process for resolving community disputes. For those who have worked in any community will know how easily they arise, and how bitter they can be. 

The disputes can also be very difficult to resolve. 

Resolving community scheme disputes

The range of disputes that this service can resolve is extensive and covers levy disputes, nuisance complaints, repairs and maintenance disputes, complex meetings, financial, governance and management issues, exclusive use rights etc.

This scheme’s administrators can also ask for an order that a tenant pay rentals direct to them to clear landlord arrears. 

Any cost incurred for using the dispute resolution service itself is usually minimum. However, the individuals levies will be increase when schemes have to start recovering a Service Levy based on that individual’s monthly levies.

There are new duties for scheme executives and schemes which includes a duty to be informed and educated about the community scheme, its affairs and activities and the relevant legislation and governance documentation. 

Community scheme governance

Governance documentation means any rules, regulations, articles constitution, terms, conditions or other provisions that control the administration or occupation of private areas and common areas in a community scheme. 

The schemes have to take out fidelity insurance against loss of money through fraud or dishonesty, register with CSOS and the lodge annual returns and governance documentation with CSOS.

A new 10 year plan and a reserve fund is required by body corporates and trustees. The 10 year plan is relating to maintenance, repair and replacement of capital items. 

This needs to be supported by the reserve fund which is sufficient enough to cover the cost of future maintenance and repair of common property. 

If the scheme is unable to meet this requirement then levies will go up until they can catch them.

Community Scheme changes

Other key changes that were made and now make it a requirement for the Body Corporate to notify the CHief Ombud, local municipality and registrar of deeds of its domicilium citandi et executandi address for service of process. 

Procedure changes include a provision that no attendee can act as proxy for more than two members. 

There is a 3 year revaluation requirement for all buildings and improvements, the valuation to be presented to an AGM for approval of insurance schedules. 

A body corporate may charge interest on arrears levies and other payments that are overdue by a member.

Van Deventer & Van Deventer Incorporated - Property Lawyers Sandton

Contact Van Deventer & Van Deventer Incorporated for any assistance with the Community Schemes Ombud Service Act

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