The Community Schemes Ombud Service Act, 9 of 2011 was passed by Parliament in 2011. It will come into force on a date to be determined by the President once the Regulations have been published. The Act will potentially bring about a change in the manner in which community schemes are managed in South Africa.

Commu­nity Schemes are developments where there is shared responsibili­ty among the owners for parts of the land and buildings. They include sectional title schemes, share block schemes, home or property owners associa­tions, housing schemes for retirees and housing co-operatives. The Act establishes the Commu­nity Schemes Ombud Service (CSOS) and introduces provisions governing the management of Community Schemes. The purpose of the Act is to pro­vide a national dispute resolution service for community schemes; train conciliators, adjudicators and other employees of CSOS; take cus­tody of: control quality of and pro­vide public access to all sectional title scheme governance documen­tation and any other such documen­tation determined by the Minister.

It should also promote good gov­ernance of community schemes and monitor that governance; pro­vide education, information, docu­mentation and services to raise awareness of owners, occupiers, ex­ecutive committees and others who have rights and obligations in com­munity schemes. It is envisaged all foundation documents of community schemes, including rules, will have to be lodged with CSOS. Currently rules for sectional ti­tle schemes are filed in the Deeds Office.

The Memorandum of Incor­poration for Associations that are incorporated as companies are filed with the Companies and Intel­lectual Property Commission. But constitutions of Associations that are not incorporated as companies and rules for associations and share block schemes are not re­quired to be filed in any publicly accessible place. The Act prescribes various pro­cedures for the adjudication of spe­cific disputes, including disputes regarding financial issues, be­havioural issues, scheme gover­nance, meetings, management services and maintenance and im­provement works. A dispute is de­fined in the Act as a dispute re­garding the administration of a community scheme between per­sons who have a material interest in the scheme, where one party is the association, an owner or an occupier. Any person may make an application to the CSOS for the res­olution of a dispute if they are a party to a dispute.

Legal represen­tation will not be permitted unless the adjudicator and all other par­ties to the dispute agree or the ad­judicator decides it would be un­reasonable to expect the applicant to deal with the application with­out legal representation. An order by the adjudicator will have the effect of an order of either the magistrate's court or the High Court, depending on the value of the award. The parties may appeal the order to the High Court but only on a point of law and they must do so within two days of the order being granted. The parties may also apply for a stay of the order pending the appeal.

The CSOS will be funded partly by Stam funding, partly by fees charged for the services it provides and partly by levies raised against all schemes. Every Community Scheme will be required to pay an annual fee and submit copies of their annual financial statements to the CSOS.

Some view the Act as a welcome regulation of the governance and management of community schemes and the introduction of affordable dispute resolution. Others view it as an intrusion on the private affairs of the Com­munity Schemes.