Advice and Opinion

Sectional title industry welcomes the Community Schemes Ombud Service Act

Now that the Community Schemes Ombud Service Act has been signed into law and became effective as of the 7th October 2016 (when it was published in the Government Gazette), the sectional title industry finally has a “helping hand” to deal with troublesome cases that they have not been able to rectify on their own.

From the time that the Community Schemes Ombud Service announced that they were provisionally taking in case submissions, a steady stream has been logged via their website.

“What could be of concern, however”, says Michael Bauer, general manager of property management company IHFM, “is the number of complaints that might be logged in a very short space of time”.

The service will be predominantly funded through a small levy to be added to the overall levies of each community scheme and is paid to the CSOS quarterly. The CSOS levy is calculated in proportion to each owner’s monthly levy payment to the scheme, e.g. if the monthly levy paid is R600, then the CSOS levy would be R2. The maximum CSOS levy payable is R40 per month. The full table of levies was published within the CSOS regulation notice on the same day as the full Act and can be downloaded from http://www.ihfm.co.za/ihfm/faqs.php?fcid=8 or obtained by emailing info@ihfm.co.za.

There is also a small application fee of R50 for cases submitted to the CSOS and an adjudication fee of R100. Applicants who earn less than R5 500 per month do not have to pay the application or adjudication fee if they wish to use the service.

“It is, in my opinion, good that the CSOS are charging a fee as this will make applicants think carefully about whether their problems are serious enough for them to a third party involved in order to sort them out,” said Bauer.

“On checking the CSOS website when it was opened to the public for submissions, there were a fair amount of complaints logged, and considering that this team of specialists will have to deal with cases from sectional title schemes, HOA run schemes, share block companies, retirement villages, and housing co-operatives, there will be a lot of work to be done in processing each complaint. Each case will have to be screened as to whether it can be sorted out without mediation or arbitration or whether the seriousness of taking it to the CSOS is justified”, said Bauer.

“What should perhaps happen”, he said, “is that each party should be coached as to how to tackle their problem going forward, and whether it is serious enough to involve the CSOS or whether it can be sorted out between the two parties on their own (or with the help of one other unbiased party). It ultimately is meant to offer a cost effective, efficient service to resolve disputes and one hopes that they won’t be inundated with cases”.

“There still seem to be a few practical issues to sort out”, said Bauer, “such as ensuring that each problem is dealt with by someone with the skill set required. One can appreciate that someone who does not know about buildings or structural problems might not be able to rule in a case where a balcony or water pipe leak is causing damage to other units, for example”.

“With over 60 000 HOA run or bodies corporate in South Africa, there is likely to be many cases reported, and these will be spread across the various provinces, so there needs to be regional representatives that can meet with complainants in the areas that they reside in”, said Bauer.

“We can anticipate an initial influx of people logging complaints and hope with time a streamlined system is in place to resolve problems within community schemes,” said Bauer.