There are many different community schemes and arrangements in South Africa. For many years there was no regulatory body governing these schemes. The Community Schemes Ombud Service Act 9 of 2011 (“CSOSA”) came into operation in October 2016 and many of these schemes now qualify as community schemes under the CSOSA. Subsequently, the CSOSA established a regulatory body established by government to deal with complaints and disputes in community schemes and to oversee compliance and corporate governance in such schemes.
The CSOS is designed to provide an alternative, impartial, cost-effective and transparent service for the resolution of administrative disputes in community schemes. The term “community scheme” refers to a wide range of shared land use arrangements, including sectional title, share block and retirement schemes, home owners’ associations and housing co-operatives.
The CSOSA defines a “dispute” as:
“a dispute in regard to the administration of a community scheme between persons who have a material interest in that scheme, of which one of the parties is the association, occupier or owner, acting individually or jointly”.
This means that the CSOS can deal with disputes regarding the administration of a community scheme if the dispute is between persons who each have a material interest in the scheme, such as executive committee members, owners, occupiers, managing agents and bondholders, and one of the parties to the dispute should either be the association or an owner or occupier.
Section 39 of the CSOSA provides for a list of seven types of orders that a CSOS adjudicator can give in terms of a dispute application. For the last nine months, I have considered various types of orders from a practical point of view to determine which kind of community scheme disputes can be taken to the CSOS for resolution and how an adjudicator can deal with such disputes. It is important to note that the list of orders provided for in the CSOSA is not exhaustive as the chief ombud is entitled to propose any other order. For this final month, I will have a look at the types of orders which do not necessarily fit into any of the previously discussed categories and I will briefly consider each of these orders as mentioned in section 39(7) of the CSOSA.
An order requiring the association to give access to information
There are many persons who might have a material interest in matters relating to community schemes. Owners, occupiers or any other persons with a material interest in the matters of a scheme are normally entitled in terms of the law and governance documentation to inspect and obtain copies of association documentation. On the other hand, there might be instances in which the applicable law and scheme governance documents do not allow owners or other parties to inspect the association’s management information. This might lead to disputes and uncertainty.
In terms of section 39(7)(a) of the CSOSA, an application may be made for an order declaring that the applicant has been wrongfully denied access to information or documents and requiring the association to make such information or documents available within a specified time. I would assume that such an application would have to be supported by a disclosure of the legal basis for the applicant’s right to access the said information or documents. The applicant will also have to proof that access has been wrongfully denied.
An order overturning an unreasonable refusal of consent to sectional title use change
If the sectional plan specifies that a section or exclusive use area is for a particular purpose and the owner wants to use it for a different purpose, in terms of section 13(1)(g) of the STSMA, the owner is entitled to ask other members of the body corporate for their written consents to the use change.
If any other sectional owner refuses consent and the affected owner considers that the refusal is unfairly prejudicial, unjust or inequitable to them, the affected owner can within six weeks after the date of such refusal, apply to the ombud for relief.
Any other order
The types of disputes discussed above, and orders specifically provided for are not the only types of administrative disputes that may arise in a community scheme. Therefore, the legislature made provision for the chief ombud to propose other suitable orders, which adjudicators will then be able to give.
In terms of section 39(7)(b) of the CSOSA, an application may be made for any other order proposed by the chief ombud. However, it must be remembered that according to the definition of a “dispute” in the CSOSA, the CSOS only has power to deal with disputes regarding the administration of a community scheme.
Please visit our website if you missed any of the articles this year relating to disputes in community schemes and do not hesitate to contact our offices should you require any assistance relating to such community scheme disputes.
Daniël Van Zyl
Attorney & Conveyancer
Van Zyl Kruger Inc