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1.1 Registration of Schemes

• This directive provides a clear process and timelines for an authorised representative to register a scheme in order to be compliant and receive their CSOS registration certificate.
• CSOS has implemented an online registration system called CSOS Connect to streamline processes, which should be utilised by schemes to be more compliant and ensure proper archiving of essential documents, as-well as mandatory compliance with regulation requirements for a functioning scheme.

1.2 Compliance and enforcement

• The compliance requirements for Community Schemes encompass the following:
  • The registration of the Community Scheme in terms of section 59 (b)((iii) read with regulation 18(3)(a) and (b) of the CSOS Act;
  • The submission of the annual returns in terms of section 59(b)(i), (ii) and (iii) read with regulation 18(2) of the CSOS Act;
  • The quality assurance of all other scheme governance documentation as prescribed by applicable legislation; and
  • The payment of levies in terms of section 59(a) read with Regulation 11(1) of the CSOS Act

• The directive sets out varying degrees of compliance enforcement and their associated consequences, with a dual approach to ensure the upkeep of these standards.
• Non-punitive enforcement includes a schemes engagement with CSOS to become compliant, physical site visits, or non-compliant notices.
• Punitive enforcement includes imposition of penalties/ fines and/or imprisonment for a period not exceeding five years. Subsequent convictions can attract a fine and/or imprisonment for a period not exceeding 10 (ten) years.
• CSOS may refer a matter to the NPA to issue statutory notices to Community Schemes if they fail to provide access to any books, accounts, documents, or assets when required to do so under the CSOS Act, amongst other instances.
• Access to schemes accounts may be seen as an overreach by CSOS, which could likely create undue influence and open the gates to illegal activity.

2.1 Scheme governance under the Disaster Management Act (DMA) and regulations

• In the event of any conflict or inconsistency between the provisions of the DMA and the provisions of the CSOS Act, STSM Act or this Practice Directive, the provisions of the DMA shall prevail.
• Meetings may be held by other means, as long as the attendees can be identified however the requirements relating to the time period for calling of the meeting, quorum and voting remain applicable.
• Community Schemes must ensure the safety of their employees during a state of disaster by providing the necessary risk mitigation kits.
• If necessary risk mitigation measures cannot be implemented, the common facilities must be closed.

2.2 Approval of special and unanimous resolutions for sectional title schemes

• The section only applies to applications in terms of section 6(9) of the STSM Act, which stipulates that “a Body Corporate or an owner who is unable to obtain a special or unanimous resolution, may approach the Chief Ombud for relief”.
• It should be noted that at least 75% (seventy-five) or more of members entitled to vote both in number and value should have voted in favour of the unanimous resolution prior to the approval of the application by the Chief Ombud.
• At least 50% (fifty) or more of members entitled to vote both in number and value should have voted in favour of the special resolution.
• There must have been a valid attempt to have passed the relevant resolution.
• The application must be made within a period of 90 (ninety) business days if the applicant was unable to obtain the required approval.
• No fee is payable for the processing of the application.

2.3 Approval of special and unanimous resolutions for schemes other than sectional title schemes

• This is a brand new proposed directive, and only applies to community schemes that are not body corporates, however it is concerning that this process will only exist in terms of the 2025 practice directive, and not one that is cemented in terms of legislation, perhaps in terms of the CSOS Act.

2.4 Lodgement of rules substituted, added to, amended or reappealed for approval

• The Community Scheme must complete the necessary application form for the amendment of rules, using the prescribed Form B.
• Form B can be completed online on the CSOS Connect platform (www.csos.connect.org.za) or downloaded from the CSOS website. Alternatively, it may be obtained at any of the CSOS regional or satellite offices nationwide.
• Quality assurance is designed to ensure that the scheme’s governance documentation applies fairly and equally to all members of the Community Schemes.
• Should any provision of the governance document be found to be in conflict with the applicable legislation, such provision will be rendered invalid and must be severed from the document.
• All scheme governance documentation must be subjected to a process of periodic review to ensure that the information contained in the document is still correct and accurately reflects current and any changes to legislation.
• CSOS has also set out a list of current undesirable rules based on the fairness test, inter alia.
  • Imposition of penalties without due process;
  • Language policy;
  • Certain restrictions on domestic workers;
  • Termination or restriction of utilities without a court order;
  • Restrictions of specified property practitioners;
  • Slaughtering of animals in a nature and wildlife estate context;
  • Costs

2.5 Voluntary submission of rules and scheme governance documents for all community schemes other than sectional title

• The application shall be voluntary and non-submission to CSOS does not invalidate the scheme’s governance documentation.

2.6 Appointment and applications for Executive Managing Agents (EMA)

• In terms of PMR 28(1), the Body Corporate may, by special resolution, appoint an EMA to perform the functions and exercise the powers that would otherwise be performed and exercised by the trustees.
• In terms of PMR 28(2), members entitled to 25% (twenty-five) total quotas of all sections may apply to the CSOS for the appointment of an EMA.
• In the event that a Community Scheme has resolved to appoint an EMA in terms of PMR 28(1), but does not have details of EMAs, the Community Schemes may approach CSOS and request a copy of their panel list.
• The directive ensures that EMA’s appointed by CSOS conduct themselves in a manner which aligns with the principles of good governance and accountability.
• CSOS will issue all appointed EMAs with a code of conduct.
• An EMA exercises these functions and powers during the tenure of their appointment.
• For a CSOS appointed EMA this is 3 (three) years, however the appointment can be terminated prior to the expiry of 3 (three) years.
• The establishment of such a CSOS EMA Panel creates grounds for regulatory capture and mechanisms for undue influence in scheme governance.

2.7 Application to the Ombud for approval in relation to consent for use of section of exclusive use area

• The section only applies to applications in terms of section 13(2) of the STSM Act.
• Assessment of applications will not take more than 30 (thirty) business days, from the date that all the information is received from the applicant.
• Once the Ombud has made a decision, any affected or interested party who is not satisfied by the decision may file a review application with the High Court against the decision of the Ombud.
• No fee is payable for the processing of the application.

2.8 Appointment and reporting of administrators to CSOS

• An administrator is a suitably qualified and independent person appointed to serve as the administrator of a Body Corporate.
• A body corporate, a local municipality, a judgment creditor of the Body Corporate or any owner and other person having a registered real right in or over a unit may apply to a Magistrate’s Court for the appointment of an administrator.
• CSOS may also be requested by the Magistrate Court to recommend an administrator from the CSOS Panel.
• In addition, stakeholders in the Community Scheme sector may request and choose an administrator for appointment from the CSOS panel.
• The CSOS has a legal mandate to oversee and regulate Community Schemes and ensure good governance, therefore, the CSOS must be notified of the appointment of an administrator and subsequently served with an application.
• Once the Magistrate Court has issued a court order for the appointment of the administrator, the administrator has a duty to report to CSOS in accordance with Section 16(4) of the STSM Act.
• In the event that the Magistrate Court appoints an administrator from the CSOS panel, CSOS does not have the authority to remove or extend the appointment of the administrator.
• CSOS will establish and maintain a panel of administrators, which the Court may refer to when considering the appointment of an administrator.
• An administrator appointed by the Court must submit quarterly reports to the CSOS in accordance as directed by the relevant court order.

3.1 Payment and collection of CSOS levies

• Upon registration, the Community Scheme will receive a CSOS registration number which should be used at all times when effecting payment of the CSOS Levy.
• All Community Schemes that were registered before the commencement of CSOS Connect, will receive a new CSOS registration number after linking their scheme.
• The new CSOS registration number after linking the Community Scheme on CSOS Connect platform will be as follows YEAR / PROVINCE NUMBER / 6-DIGIT NUMBER
• The old CSOS registration number sequence was REG/YEAR/PROVINCE/6 DIGIT NUMBER, which is no longer in use.
• It remains the full responsibility of the Community Schemes to ensure that payment is received by CSOS within 30 (thirty) business days of receiving the invoice or when the levy becomes due and payable to avoid any penalties and/or interest being charged

3.2 Waiver of levies and fees

• In case of a unit owner who has been exempted from paying the CSOS levies as the scheme must, when submitting a levy schedule to CSOS, indicate that the unit owner is a SASSA grant recipient or that the unit owner falls in the category of persons residing within frail care or assisted living/mid care living, or that a person is receiving an income of less than R5 500.00.

3.3 The opening of a BC bank account in terms of STMA

• In terms of section 3 of the STSM Act, the trustees must open and operate a bank account with any bank or financial institution registered in terms of the Banks Act No. 94 of 1990.
• In respect of other Community Schemes, the opening of the bank account shall be in accordance with the scheme governance documentation, management rules and applicable legislation.

3.4 The submission of annual returns of a community scheme

• In terms of section 59(b)(i) of the CSOS Act and regulation 18(2)(a) (i), all Community Schemes must file their annual returns to CSOS within 4 (four) months after the end of the Community Scheme’s financial year.
• Non-compliant Community Schemes will be notified and issued with a non-compliant certificate and be required to comply within a specified period.
• Failure to comply shall attract the allocation of an account executive/officer to enforce compliance and the officer’s report shall determine whether a fine is imposed.

4.1 Dispute resolution of community scheme

• The directive applies to all disputes within community schemes and covers a wide range of issues, such as disputes between owners, tenants, and the scheme’s governing bodies.
• It further specifies the procedural steps for dispute resolution.
• The application must comply with the provisions of section 38 of the CSOS Act and the expected outcome must fall within section 39 of the CSOS Act.
• Applicants must have the requisite legal standing to bring the matter before CSOS.
• It defines the roles of Conciliators and Adjudicators, outlines the procedures for filing disputes, and establishes the processes for hearings, conciliation, and adjudication.
• These procedures are aimed at promoting fair and timely resolution of disputes.
• It further ensures all parties have an equal opportunity to present their cases and that outcomes respect the rights of each party involved in the dispute.
• Applicants must complete the prescribed CSOS application Form DR 1, in order to lodge an application for dispute resolution and can be completed from the CSOS Connect website at www.csos.org.za/forms, or alternatively may be obtained from any CSOS regional or satellite offices.
• There is no application fee payable.
• The applicant must submit proof that any prescribed internal processes for resolution of the dispute have been exhausted.
• The applicant will be exempted if they can prove that the respondent has failed and/or refused to participate in any internal dispute resolution process, that the respondent rejected any invitation to internal dispute resolution process; or there is no functioning scheme executive committee.
• CSOS will make a decision to refer a matter to conciliation or adjudication within 5 (five) business days after receiving all responses from the affected parties however, there are certain instances where CSOS will refer the matter directly to adjudication.
• Applications may be brought on an urgent basis, and will be determined based on imminent harm, loss of life, damage or loss that may occur if the dispute is not handled on an urgent basis, the termination of essential utility services or denial of access to the scheme, common property or common infrastructure or unit.
• If it is later found that the matter was not urgent, the Adjudicator may issue a cost order against the applicant in favour of the respondent, or any active participant affected materially by the application.
• Parties should also be aware that adjudication orders are published and made available on the CSOS website.

5.1 Protection of personal information and access to information

• A member of the Community Scheme shall not be entitled to access any members’ Personal Information without their consent, other than information readily available in terms of the governance or management of affairs of the Community Scheme.
• Executive Committee Members must ensure that appropriate measures are put in place to safeguard the unlawful possession or access to this personal information.
• Each Community Scheme must accordingly designate a person to be an Information Officer for the Community Scheme, which may be a member of a managing agent.
• Personal Information can therefore only be processed in a lawful manner, if necessary, if consent is obtained and collected directly from the data subject.
• Parties involved in dispute resolution proceedings are entitled to access documents and/or information in so far as it relates to the dispute and are not mandated to follow the POPIA or PAIA process for access to information.
• CSOS has muddied the ruling of Judge Wilson in the Montrose Mews Body Corporate v Moela case, which stated:
  • “PAIA is not intended to apply to situations where a duty to disclose information arises from a pre-existing legal relationship between the person seeking information and the person or body holding that information.”
  • A member’s right to access Body Corporate records arises from Prescribed Management Rule (“PMR”) 26(2) and 27(4), not PAIA.
  • PAIA applies only when no specific legal relationship or statutory right exists.
  • Using PAIA to regulate access to information already governed by other legislation leads to unnecessary administrative burdens, and the erosion of statutory rights granted to members under the STSM Act.

The STSMA confirms that a special resolution will be passed at an Annual General Meeting (“AGM”) or Special General Meeting (“SGM”) if:

• 75% calculated both in value and in number,
• of the votes of the members of a body corporate
• who are present or represented in proxy
• vote in favour of the proposed special resolution.

REMEMBER that:

• the body corporate must give all members at least 30 days written notice of this meeting, specifying the proposed special resolution in the notice of the meeting (except where the rules provide for shorter notice);
• the quorum requirements will have to be met before any business can be transacted at the meeting.

These are the quorum requirements:

for a community scheme with less than 4 primary sections or a body corporate with less than four members:

• members entitled to vote and holding two-thirds of the total votes of members in value have to be present or represented in proxy.

for any other community scheme:

• members entitled to vote and holding one-third of the total votes of members in value, have to be present or represented in proxy;
• at least 2 persons must be present unless all the sections in the community scheme are registered in the name of one person;
• when calculating the value of votes required to constitute a quorum, the value of votes of the developer must not be taken into account.

If a special resolution is passed at a General meeting by members holding less than 50% of the total value of all members’ votes [PMR 20(9)(a)]:

• the body corporate must not take any action to implement that resolution for 1 week after the meeting,
• UNLESS the trustees resolve that there are reasonable grounds to believe that immediate action is necessary to ensure safety or prevent significant loss or damage to the community scheme; OR
• within 7 days from the resolution, members holding at least 25% of the total votes of all members in value may,
• by written and signed request delivered to the body corporate, require that the body corporate hold a Special General Meeting to reconsider the resolution.

Below is our special resolution templates to be used when a body corporate wants to adopt a special resolution, to borrow funds in terms of our Funding solutions, at an AGM or SGM:

Arrear Levy Funding

Project Funding

The STSMA confirms that a special resolution can be passed in writing (Round Robin) if:

• the members of a body corporate
• holding at least 75% of all the votes
• calculated in value and in number
• agree (vote in favour of) to the special resolution in writing.

Below is our special resolution templates to be used when a body corporate wants to adopt a special resolution, to borrow funds in terms of our Funding solutions, in writing:

Arrear Levy Funding

Project Funding 

Prescribed Management Rule (“PMR”) 10(1)(b) of the STSMA Regulations confirms that no document signed on behalf of the body corporate is valid and binding unless:

• it is signed on the authority of a trustee resolution
• by 2 trustees or
• 1 trustee and the managing agent.

To ensure that the nominated trustees are duly authorised to sign our loan documentation (when their body corporate borrows funds from us), we have created the following templates for trustee resolutions:

Arrear Levy Funding – Trustee resolution in terms of PMR 10(1)(b)

Project Funding (Term Loan) – Trustee resolution in terms of PMR 10(1)(b)

Prescribed Management Rule (“PMR”) 15 (7)(a) of the STSMA Regulations confirms that a General meeting may be called:

• on 7 days’ notice
• if the trustees have resolved that short notice is necessary due to the urgency of the matter; and
• set out their reasons for this resolution.

The trustees must not take such a trustee resolution regarding a meeting wherein a resolution is proposed to:

• make alterations or improvements to the common property that are reasonably necessary; OR
• install separate pre-paid meters on the common property to control the supply of water or electricity to a section or exclusive use area. 

Below are the templates for notice and trustee resolution to be used by trustees who wish to call a meeting on short notice (urgent SGM).

Arrear Levy Funding – Template Notice and Trustee resolution for calling a meeting at short notice (urgent SGM) 

Project Funding (Term Loan) – Template Notice and Trustee resolution for calling a meeting at short notice (urgent SGM)

Prescribed Management Rule (“PMR”) 20(9)(a) of the STSMA Regulations confirms that if a special resolution is passed at a General meeting by members holding less than 50% of the total value of all members’ votes:

• the body corporate must not take any action to implement that resolution for 1 week after the meeting;
• UNLESS the trustees resolve that there are reasonable grounds to believe that immediate action is necessary to ensure safety or prevent significant loss or damage to the community scheme.

Please see below the template:

Trustee resolution waiving PMR 20(9)(a)