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The Community Schemes Ombud Services Act

Conflict within Sectional Title Schemes can be difficult to manage at the best of times, without the added stress of having to live cheek by jowl with the source of your conflict.

Fortunately the Community Schemes Ombud Services Act provides a means to a mediated legal settlement and resolution of the conflict.

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Community Schemes Ombud Services Act

The Community Schemes Ombud Service Act 9 of 2011 was signed into law on 7 October 2016. The purpose of the Act was to set-up an Ombud service which allows for issues to be resolved, and allows for the quality of relevant scheme governance documentation to be regulated, monitored and controlled. 

It also creates a central location for governance documentation to be stored, which relates to Schemes around the country. This, in turn, makes it easier for the public to access this information. 
 
Administration of the Scheme is currently run from offices located in Sandton, Johannesburg. However, provincial offices are located in Gauteng, Limpopo and North West, Kwa-Zulu Natal, the Free State and Mpumalanga, and in the Western Cape which will help to deal with matters that arise in those respective areas. 

Ombud Service Levy

The Ombud Service will be largely self-funded, aside from the R40 million which was given in order to help establish the service. This will be achieved by charging each member of a scheme in their jurisdiction up to R40 per month at the most. 

This is of course dependant on the amount of the levy which is paid by each member of a Scheme. Specific services will also be charged for however the financial affairs of the Ombud will be subject to the terms of the Public Finance Management Act. 

These levies were made payable by the scheme to the Ombud Service on a quarterly basis as of 7 January 2017. 

The procedures to be followed, should a dispute arise that needs the Ombud Service to resolve, are laid out in Section 38. You can also gain insight into the services which can be provided for by the relief examples which are listed in the Act. 

Relief provided

The examples of relief are set out in 8 categories which includes the following:

  • Financial issues, 
  • behavioural issues, 
  • Issues relating to the rules of governance, 
  • The convening of meetings and validation of decisions made at said meetings, 
  • Issues which relate to disputes between the managing parties and the Ombud Service, 
  • Issues which relate to the upkeep of or changes that are made in the scheme such as maintenance, repairs, improvements or alterations. This also relates to issues which arise when a member of a scheme requires exclusive use rights to a common area, and
  • Finally, issues which arise from information being withheld and how the Ombud Service can request for this information to be made available. 

The Jurisdiction of the Ombud Service to address issues is expanded in the final line of this section of the Act, wherein it states that “in respect of general and other issues - any other order proposed by the chief ombud.” 

Exhaust all other avenues

It is worth noting that members who have an issue with their Association will need to first make use of all the different avenues available to resolve an issue internally before they can approach the Ombud Service for relief. 

Also, certain types of applications will have a limited amount of time in which members can lodge them. For instance, were a member to seek an order so as to render a decision made by the Association void, then an application would need to be lodged within 60 days of the decision being made. 

Only for good reason can the Ombud Service increase this time limit. It can be assumed that ordinary prescription laws apply to types of claims where no time limits are given. 

The Ombud Service will have to advise all of the affected parties once the application has been lodged successfully. This will allow for them to submit their own written application. The applicant can then reply to the issues that the affected parties raised however this can only be done in their replying papers.

There are specific steps that are taken when an issue is being resolved. Parties are first advised to reach an agreement by a Conciliator, but if this doesn’t resolve the issue in question then the Ombud Service will elect an adjudicator to help bring the issue to conclusion. 

The adjudicator can be chosen by the parties involved and his/her fees will need to be secured prior to the matter being dealt with. 

The application fee is R50 and the Adjudication fee is R100 as prescribed by the Regulations of the Act. Copies for scheme governance documents or other documents will cost R8 per copy. 

Should a person’s monthly net household income be below R5,500, then said person will be entitled for 100% waiver for the application and adjudication fees. 

If they don’t qualify for this waiver, then said person could apply to the Chief Ombud for a discount or a waiver. This application will be subject to consideration and on an individual basis.  

Unlike a judge or magistrate who will sit back and allow for the cases of each party to be presented, adjudicators appointed to resolve scheme disputes will play a more active role is the resolving process. 

They have to not only follow the due process of law but they also need to try and resolve the matter as quickly as is possible for due process to be followed. 

Other people can be called in by the adjudicator so as to present relevant evidence to the case. They may ask for further information or documentation which could assist with resolving the case or otherwise conduct inspections of different aspects which could also help with this matter. 

Unless agreed to by all parties involved, legal representation cannot be used during the adjudication process. 

The adjudicator can also allow for legal representation if all factors concerning the dispute have been taken into consideration. However, all parties are allowed to have their legal representatives prepare their application to the adjudicator. 

Applications can be dismissed if the adjudicators sees fit to do so and, in the event of a party winning a dispute, the adjudicator can make the losing party liable for the total costs as a means of compensating the winning party for the losses relating to the application.

Once an award has been given by the adjudicator, an appeal can be made on points of law. This will have to be made to the High Court within 30 days of the the order being passed. 

This right of appeal will only be extended to the individual if the law has been incorrectly applied to the facts of the dispute by the adjudicator. 

Also orders for payment to be made for a specified amount carry the same authority as if they were made in court and the award that an adjudicator can make is not subject to any jurisdictional limit. 

Van Deventer & Van Deventer Incorporated - Sectional Title Attorneys Sandton

Contact us for expert legal advice.
 

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