In a move to streamline governance and dispute resolution in South Africa's community schemes, the Community Schemes Ombud Service (CSOS) has released its Consolidated Practice Directives 1 of 2025 on July 18, 2025.
This comprehensive document serves as a single reference point for all stakeholders, replacing previous directives, circulars, and guidelines. The directive outlines essential rules to ensure fair, transparent, and efficient operations.
CSOS, established under the Community Schemes Ombud Service Act 9 of 2011, regulates schemes like sectional titles, homeowners' associations (HOAs), share block companies, housing co-operatives, and retirement villages. The directives emphasise good governance, compliance, and dispute resolution amid ongoing legislative reviews. Here's a breakdown of the key highlights to help you navigate this important update.
Why These Directives Matter
South Africa's community schemes sector is booming, with millions living in shared properties. However, disputes over levies, rules, and management are common. The directives aim to:
- Promote mandatory registration and compliance.
- Provide clear processes for governance, payments, and disputes.
- Ensure protection of personal information and access to records.
- Adapt to challenges like disasters (e.g., under the Disaster Management Act).
Stakeholders are urged to check the CSOS website (www.csos.org.za) regularly for updates, as the directives may evolve with legislative changes.
Key Chapters and What They Cover
1. Registration, Compliance, and Enforcement
All community schemes must register with CSOS via the online platform CSOS Connect (www.csosconnect.org.za) – no fees apply. Registration generates a unique number for levy payments and a certificate. The process involves creating a user profile, activating it, and linking or registering schemes, with distinctions for new (under one year) and existing schemes.
Compliance is non-negotiable: Schemes must submit accurate documents (listed in Annexure A, e.g., governance rules, title deeds). Non-compliance triggers investigations, notices, or enforcement actions like fines or court referrals. CSOS offers assistance through engagements, but intentional breaches face strict consequences.
2. Scheme Governance
This chapter addresses meetings, resolutions, and rules amid disruptions like national disasters. Virtual or hybrid meetings are encouraged for safety, with guidelines on biometric access, common area use, and employee health.
It details approvals for special/unanimous resolutions (e.g., under Section 6(9) of the Sectional Titles Schemes Management Act), rule amendments, and appointments of executive managing agents or administrators. Undesirable rules (e.g., those discriminating or conflicting with laws) are flagged in annexures, ensuring schemes remain fair and legal.
Voluntary submissions of governance documents for non-sectional title schemes are also covered, promoting transparency.
3. Payments, Levies, and Annual Returns
CSOS levies fund the service and are payable quarterly or annually. Schemes must use electronic payments (details in Annexure E) and maintain separate bank accounts. Waivers or discounts are available for low-income schemes via a means test, but non-payment leads to debt recovery.
Annual returns, including executive details and financials, must be submitted within four months of the financial year-end. Supporting documents (Annexure F) ensure accurate records.
4. Dispute Resolution
A core CSOS function, this outlines a step-by-step process: Applications (in English, with support for other languages) go through assessment, conciliation, and adjudication. No legal advice is provided, but parties must exhaust internal remedies first.
Urgent matters skip conciliation, and hearings can be face-to-face or document-based. Adjudication orders are enforceable like court judgments, with appeals possible. A code of conduct for conciliators and adjudicators (Annexure G) ensures impartiality.
5. Protection of Personal Information and Access
Aligned with POPIA and PAIA, CSOS acts as a responsible party for data handling. Schemes must appoint information officers and manage requests for records. Applications for access are detailed, emphasising privacy while enabling transparency.
General Guidelines for All Stakeholders
- Use professional communication; derogatory behaviour is prohibited.
- Adhere to timelines and exhaust internal disputes before approaching CSOS.
- Walk-ins are welcome despite the shift to CSOS Connect.
- Contact CSOS via 0800 000 653 or info@csos.org.za
Looking Ahead
These directives repeal all prior ones, fostering consistency in a sector vital to South Africa's housing landscape. CSOS encourages schemes to register promptly and comply to avoid penalties. For full details, download the PDF from www.csos.org.za.
If you're in a community scheme, review your governance docs today – better governance means fewer disputes and happier communities.
Serious Consequences for Non-Compliance
Backed by the CSOS Act and the Sectional Titles Schemes Management (STSM) Act, the directive introduces stringent enforcement mechanisms. Failure to meet requirements—such as registering scheme rules, maintaining a Protection of Personal Information (POPI) manual, or appointing an information officer registered with the Information Regulator—can result in administrative penalties. Intentional breaches may escalate to criminal charges, with severe consequences like imprisonment or significant fines. Trustees and managing agents must act promptly to align with these rules to avoid legal repercussions.
Eliminating "Undesirable Rules"
A key focus of the directive is the identification and rejection of “undesirable rules”—provisions deemed unconstitutional, discriminatory, or inconsistent with legislation. These are detailed in Annexures B and C for sectional titles and other schemes. During CSOS’s quality assurance process or adjudication, such rules can be rejected or struck down. Examples include:
- Restrictions on domestic workers, such as prohibiting visitors or conversations in common areas, or requiring name tags/passes.
- Rules infringing on constitutional rights, directly or indirectly.
- Inconsistent pet policies (e.g., banning cats but allowing dogs, as seen in recent disputes).
CSOS has the authority to remove, amend, or replace these rules, ensuring governance documents uphold fairness and legality.
Stricter Rules on Fines
The directive clamps down on arbitrary or excessive fines, mandating a structured process:
- Written warnings must precede penalties.
- A clear internal dispute resolution process with defined timeframes is required.
- Fines cannot exceed the monthly levy of the unit in question, and open-ended or summary penalties are prohibited.
Trustees lack unilateral authority to impose fines and must adhere strictly to CSOS procedures to avoid having their decisions overturned.
Banning Restrictive Sales and Letting Practices
The directive prohibits schemes from mandating the use of specific estate agencies for renting or selling units, deeming such rules unconstitutional. CSOS can order these provisions to be removed, amended, or replaced, protecting owners’ rights and promoting fair competition.
Practical Implications
The structured dispute resolution process—covering application, conciliation, and adjudication—ensures swift action, with urgent matters bypassing initial steps for immediate relief. Adjudication orders are enforceable like court judgments, and appeals are available.
Core Requirements of the Directive
The directive outlines essential processes for community schemes:
- Registration: Mandatory via CSOS Connect (www.csosconnect.org.za), free of charge. Schemes receive a unique registration number and certificate. Supporting documents (Annexure A) include governance rules and title deeds, with distinctions for new (under one year) and existing schemes.
- Levies and Annual Returns: CSOS levies, payable quarterly or annually, fund operations. Low-income schemes may apply for waivers via a means test (Annexure E details electronic payments). Annual returns, due within four months of the financial year-end, include executive and financial details (Annexure F).
- Governance During Disasters: Virtual or hybrid meetings and guidelines for common areas and employee safety are covered under the Disaster Management Act.
- Dispute Resolution: Parties must exhaust internal remedies before approaching CSOS. The process includes urgent hearings, document-based or face-to-face adjudication, and a code of conduct for conciliators/adjudicators (Annexure G).
- Data Protection: Compliance with POPIA and PAIA requires schemes to appoint information officers and manage access to records.
A Call to Action
It is advisable for trustees, with the assistance of their managing agent (where applicable), to review and align their governance documents with the new framework to avoid penalties. The full directive is available at www.csos.org.za, and stakeholders are encouraged to stay updated as legislative reviews may bring further changes.
Visit our website at www.watchprop.co.za or call us on 0219146660 / email on info@watchprop.co.za to learn more about our services. Together, we can build a thriving and sustainable community scheme.
