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Impact of the new Community Schemes Ombud Service Act

Ombud Office good news for SA property industry.

Newly formed Ombud Office a positive step for South African property industry.

In a nutshell, the new Community Schemes Ombud Service Act 9 of 2011 (CSOSA) promotes good governance and creates an Ombud office to help and assist in resolving and dealing with disputes in community scheme scenarios. This is an incredibly positive move and something that the property industry has needed for quite some time.

CSOSA came into effect on 7 October 2016 alongside the new Sectional Titles Schemes Management Act 8 of 2011 (STSMA). Both new pieces of legislation flow from the Sectional Titles Act 95 of 1986.

Applies to all community schemes in South Africa

The first noteworthy feature is that this office is set-up to be applicable to all community schemes and not just sectional title, meaning that it also applies to Home Owners Association’s within estates and complexes.

Affordable and reliable justice for community scheme members via the new Ombud Office.

New Ombud Office provides an alternative dispute resolution service for community scheme members.

Offers an affordable dispute resolution platform

In the past, when a dispute arose in a community scheme that could not be resolved, the only recourse for members was to approach court. As we all know, court procedures can often be very lengthy in nature and extremely costly, thus putting it out of reach of many members of community schemes.

This newly formed Ombud office now grants such members a cost-effective platform to hear disputes and to effectively deal with them. Current fees for referring a dispute to the office is R50, and in the event that conciliation cannot occur and the matter needs to be adjudicated on, then the cost will be R100.

Handles financial issues, plus conduct, management, and more

Local adjudicators (to be appointed by the Chief Ombud) will handle the disputes and are obliged to report to the Chief Ombud.

The adjudicator is in position to handle matters of the following nature:

  • matters relating to financial issues;
  • issues of conduct;
  • governance;
  • conduct of meetings;
  • management issues; or
  • access to information or documents.

The Chief Ombud has already been appointed and the office is now held by Mr Themba Mthethwa, a former Human Rights Attorney. The decision of the adjudicator may be taken on appeal to a High Court but only in respect of a question of law.

Ombud office levy for all community scheme members

Although government have made an initial contribution towards establishing the office of the Ombud for community schemes, the office itself will need to become financially self-reliant. In order to achieve this as envisaged in terms of this Act, there is a duty on body corporates to collect a levy every month from each member of every scheme which will be paid to the Chief Ombud.

The fee’s payable are staggered depending on the municipal valuation of the unit of each member and ranges from R3.40 a month for units valued between R500,000 and R600,000, up until R68 per month for units valued over and above R2,250,000.

Abrahams and Gross in adjudication with Ombud office

Our offices have already submitted our first dispute for adjudication to the office of the Chief Ombud and can confirm that we have received excellent feedback and response time to our application. We believe that this office will add great value to the property industry and will continue to keep our clients apprised of any developments associated with the office.

Should you have any enquiries about either STSMA or CSOSA, please don’t hesitate to contact our attorneys who are experts in Conveyancing and Property Law.

For detailed information about the new Sectional Title Schemes Management Act (STSMA), please read our article titled ‘Interesting observations regarding the new Sectional Title Schemes Management Act’.

 By

Nicholas Hayes and Basil de Sousa |  Abrahams & Gross Attorneys

t    021 422 1323    |    e   info@abgross.co.za

Disclaimer

The articles on these web pages are provided for general information purposes only. Whilst care has been taken to ensure accuracy, the content provided is not intended to stand alone as legal advice. Always consult a suitably qualified attorney on any specific legal problem or matter.

 

 

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