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The new Community Schemes Ombud Services Act (“CSOS Act”) finally came into effect on the 7 th October 2016.

 

While the new Act has caused a flurry of speculation and concern amongst home owners, there is little doubt that the dispute resolution mechanism provided and the monitoring and governance intended are inherently positive. The Act applies to any scheme including a sectional title, a home owner’s association, a share block company or a housing scheme for retired persons (hereinafter collectively referred to as “community scheme”).

 

In terms of section 38 of the CSOS Act, any person in a community scheme may make an application to CSOS if such a person is a party to or is materially affected by a dispute. A community scheme therefore has a choice as to whether to approach the Court or refer the matter to CSOS. While the creation of CSOS was intended to bring a cost-effective alternative to litigation, community schemes are under pressure to resolve matters quickly and therefore seek the most efficient form of dispute resolution. Until such time as CSOS is equipped to deal with the influx of disputes, community schemes are likely to adopt the litigious approach traditionally practiced.

 

If a community scheme has an internal dispute resolution mechanism then any owner wishing to approach CSOS must first lodge a formal written complaint with the scheme and only if the matter remains unresolved may they approach CSOS. However if there is no internal dispute resolution mechanism then CSOS may be approached in the first instance.

 

Applications to CSOS must be lodged in person at the regional CSOS office or by email (wc- This email address is being protected from spambots. You need JavaScript enabled to view it.). Alternatively applications may be made on the CSOS website (www.csos.org.za). The application will then be assessed by CSOS to determine whether there is a valid claim capable of being settled amicably in which case it will be set down for conciliation. If the matter is not resolved at conciliation a Notice of Non-Resolution will be issued and the matter will be referred to Adjudication. At the Adjudication hearing the Adjudicator will consider all the evidence before making a determination which is binding on all parties and enforceable in court.

 

Alternative dispute resolution is gaining momentum in South Africa, assisting parties with a quick, cost-effective and private alternative to litigation. These are exciting times in the property industry and perhaps the CSOS levy is a small price to pay.

 

Once the uncertainties and ambiguities of the new Act have been addressed and CSOS has established a functional office we will be in a better position to appreciate the services on offer.

 

Sarah Pietersen

Legal Advisor

Faircape Group