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CSOS Practice Directive No 1 of 2018 – Amendment of the Practice Directive on Payment of Levies and Fees (14-Jun-18)

The CSOS Practice Directive No 1 of 2018 was issued on the 14^th of June 2018 and provides amended and more detailed guidelines in respect of the initial Practice Directive (No 1 of 2017) issued on the payment of levies and fees.

In this Practice Directive, you will find the following:

• the difference between a “CSOS levy” and a “scheme levy”;
• an explanation of a community scheme’s obligation to pay the CSOS levy;
• the payment intervals of the CSOS levy;
• an explanation of the administrative process to be followed by a community scheme for the payment of their CSOS levy (including the reference numbers and banking details to be used for the payment of the CSOS levy);
• guidelines on how to deal with CSOS levies if you stay in a “scheme within a scheme”;
• confirmation of what will happen if your community scheme fails to pay its CSOS levy.

CSOS Practice Directive No 2 of 2019 – Amendment of The Practice Directive on Payment of Levies and Fees (01-Aug-19)

The CSOS Practice Directive No 2 of 2019 was issued on the 1^st of August 2019 and provides amended guidelines in respect of the first Practice Directive (No 1 of 2018) issued on the payment of levies and fees.

This Practice Directive differs from the one issued in 2018 in that it:

• amended the email address to be used by community schemes that have not yet been issued with a registration/reference number (paragraph 6.1);
• added a request that community schemes inform CSOS when they change their managing agent to ensure their receipt statements are sent to the correct managing agent;
• added a paragraph dealing with the waiver of levies (where a unit owner has been exempted from paying CSOS levies).

CSOS Practice Directive – Regarding amendment of rules and issuing of compliance certificates during lockdown period (25-May-20)

On the 25^th of May 2020, CSOS issued a Practice Directive regarding the amendment of rules and issuing of compliance certificates during the lockdown period.

In summary, this Practice Directive provides:

• confirmation that CSOS’ Governance Unit completed the review of most of the community scheme governing documentation that was submitted to them;
• confirmation that they will be issuing compliance certificates to community schemes whose rules were approved and compliant;
• the process to be followed by CSOS in respect of the issuing of these compliance certificates.

CSOS Circular No 1 of 2021 – Amendment of rules in terms of the STSMA

On the 6^th of May 2021, the CSOS issued an updated circular on the amendment of rules in terms of the Sectional Title Schemes Management Act, 8 of 2011 (“STSMA”).

In this circular community schemes will find guidelines in respect of the following:

• the administrative procedure to be followed when applying to have their rules amended;
• the requirements to be met in respect of an application for the amended of the scheme’s rules;
• the quality assurance process to be followed by the CSOS when reviewing the application for the amendment of the community scheme’s rules;
• the undesirable rules as identified by the CSOS.

CSOS Practice Directive No 1 of 2019 – Dispute Resolution (01-Aug-19)

The CSOS Practice Directive No 1 of 2019 was issued on the 1^st of August 2019 and replaced the Practice Directive No 2 of 2018 on dispute resolution in its entirety. This Practice Directive provides detailed information on the implementation, procedures and requirements for dispute resolution applications lodged with the CSOS.

More specifically, this Practice Directive provides guidelines in respect of the following:

• the required form to be completed when applying for dispute resolution at CSOS;
• where to find and submit the required dispute resolution application form;
• guidelines on how to complete the required dispute resolution application form;
• the requirement of an internal dispute resolution process;
• the administration process followed by CSOS after submission of an application for dispute resolution, including the payment process of the prescribed fee;
• the processes followed to resolve the dispute (in the form of conciliation and adjudication);
• the Adjudication Order issued and how to enforce it if there is non-compliance;
• what CSOS deem as urgent matters and how to apply for relief in urgent matters;
• the appeal process to be followed if not satisfied with the Adjudication Order issued (remember you can only lodge for appeal on a question of law).

CSOS Practice Directive – Amendments to the Practice Directive of 2019 (02-Dec-21)

The Amendments to the 2019 Practice Directive were issued on the 2^nd of December 2021 and provide updated guidelines on the implementation, procedures and requirements for dispute resolution applications lodged with the CSOS.

More specifically, the updated guidelines include:

• the indefinite suspension of the prescribed dispute resolution application fee;
• the waiver of the prescribed adjudication fee;
• the reduction of the number of days’ notice (from 10 days to 5 days)an applicant will be allowed to inspect the submission and to provide a written response relating to the issue raised in the submission (extension to be considered in exceptional cases);
• the reduction of the notice period to be given to parties in terms of 17.1 of the Practice Directive is herein reduced for conciliation and adjudication (from 14 days to 7 days);
• commitment of a “90-day” timeframe within which CSOS must dispose of disputes.

CSOS Practice Directive No 4 of 2022 – Waiver of Levies (04-Feb-22)

The CSOS Practice Directive No 4 of 2022 was issued on the 4^th of February 2022 to provide more information as to who will be entitled and/or qualify to apply for a discount or waiver for the payment of CSOS levies.

In this Practice Directive you would find the following:

• categories of persons who can apply for a discount or waiver for the payment of CSOS levies;
• categories of persons who automatically qualify for the waiver of the payment of CSOS levies;
• the procedure to follow when you are applying for a discount or waiver of the payment of CSOS levies;
• grounds of refusal for an application for a discount or waiver.

CSOS Circular No 2 of 2018 – Procedure for the Application of relief in terms of S6(9) of the STSMA (01-Aug-18)

On the 1^st of August 2018, the CSOS issued a circular on the procedure for the application of unanimous and special resolutions as set out in terms of section 6(9) of the Sectional Title Schemes Management Act, 8 of 2011 (“STSMA”).

Section 6(9) of the STSMA states:

“6. Meetings of Bodies Corporate

(9) A Body Corporate or an owner who is unable to obtain a special or unanimous resolution may approach the chief ombud for relief.”

In this circular community schemes will find guidelines in respect of the following:

• the procedure to follow when applying to the CSOS for relief in terms of section 6(9) of the STSMA (quoted above);
• the documentation to be submitted in support of an application for relief in terms of section 6(9) of the STSMA;
• the approval and assessment process to be followed by the CSOS.

CSOS Circular 2 of 2021 – The approval of the special and unanimous resolution process in terms of the STSMA (31-Aug-21) (also referred to as section 6(9) applications)

On the 31^st of August 2021, the CSOS issued an updated circular that provides more information and guidelines on the procedure for the application of unanimous and special resolutions as set out in terms of section 6(9) of the Sectional Title Schemes Management Act, 8 of 2011 (“STSMA”).

In this circular you will find:

• Guidelines on how to apply for the approval of a unanimous and special resolution
• The approval process to be followed by the community scheme before submitting an application of this nature
• The supporting documentation to be filed with the application to CSOS
• The assessment procedure followed by CSOS after receiving the application
• Guidelines on when an application will be rejected by CSOS
• More information on the notice by the Chief Ombud will send to the community scheme

CSOS Circular 1 of 2021 – The registration & submission of annual returns of a community scheme (31-Aug-21)

The first CSOS Circular on the annual returns was issued on the 31^st of August 2021 and provides guidelines to community schemes on the procedure and content requirements for the registration and submission of their annual returns.

In this Circular, you will find:

• The administrative procedure and requirements to register a community scheme at CSOS
• Confirmation as to when a community scheme must file their annual returns
• A list of documentation that has to be filed with the annual returns
• The procedural requirements that will be followed by CSOS after submission
• Guidelines on what to do if there was a change in the scheme executives’ particulars

CSOS Circular 1 of 2021 – Opening of a body corporate bank account (31-Aug-21)

On the 31^st of August 2021, CSOS issued a circular on the opening of a bank account in terms of the Sectional Titles Schemes Management Act, 8 of 2011 (“STSMA”). This circular aims to provide guidelines to sectional title schemes on the opening and operation of a body corporate bank account.

In this circular, you will find:

• An explanation of the STSMA requirement to open and manage a bank account on behalf of a body corporate
• The documents required to open a bank account

CSOS Practice Directive No 1 of 2022 on Compliance and Enforcement into section 36 of the CSOS Act

On the 4^th of February 2022, CSOS issued Practice Directive 1 of 2022 on Compliance and Enforcement in terms of section 36 of the CSOS Act. This directive is focused on the establishment and maintaining of a “pre-compliance culture” amongst community schemes and to ensure they are aware of, and understand their obligations.

In this circular, you will find:

• a list of legislation a community scheme has to comply with;
• confirmation from CSOS that they will prioritise community schemes that are willing to comply with the CSOS laws;
• confirmation from CSOS to guide and assist community schemes to return to compliance with the CSOS laws;
• the action that will be taken by CSOS to enforce compliance and the enforcement options, including the fines and penalties involved;
• confirmation as to where one can report non-compliance with CSOS.

CSOS FAQs by Members of Community Schemes

This CSOS FAQ document is not a Practice Directive, but it deals with and answers a lot of important questions asked by members of community schemes.

The CSOS addresses a few interesting questions in this document, amongst others:

• Who appoints the managing agent and the employees of a body corporate?
• Can the trustees lodge an application for dispute resolution with the CSOS if a summons has already been issued against a levy defaulter?
• Must a managing agent have a Fidelity Fund Certificate?
• Must an owner first waive a meeting before a Skype / Zoom / Microsoft Teams meeting can take place?
• What will happen if the community scheme does not want to register with CSOS?
• Can the person who is involved in the preparation of the monthly financial report audit the financial statements?
• In levy collections and arrears, does the CSOS have monetary jurisdiction?

It is important to note that this FAQ document was issued by CSOS and does not necessarily reflect the views and/or opinions of STS or any of its employees.

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)