As of the 1st of January 2017, sectional title owners will be required to pay an extra levy to the Community Schemes Ombud Service Act 9 of 2011, making provision for all disputes related to sectional schemes to be referred to the Community Schemes Ombudsman. The calculation of the levy is based on the basic levy less R500, multiplied by 2%, capped at R40 per month per unit.
The current Sectional Titles Act does provide for arbitration; however, this is not as cost effective as approaching the Ombudsman. It is important to note that the Ombud does not only apply to sectional title schemes, but also the following:
- Home owner associations (NPC or voluntary associations);
- Shareblock schemes;
- Retirement villages;
- Housing associations.
In order to use the services of the Ombudsman, community schemes were to register by 6 November 2016 by electing an authorised representative (by resolution signed by two trustees or directors) and the necessary application forms and thereafter the certificate certain governance documentation by 6 January 2017. Non-compliance with the act will have criminal consequences and executives of the community scheme may be held personally liable.
An owner wanting to use the Ombudsman must first exhaust internal dispute procedures and failing this, must lodge the relevant forms with the Ombudsman and pay the prescribed fee (a R50 application fee and an adjudication fee of R100). The forms are available on the Community Schemes Ombudsman website (http://www.csos.org.za/disputeresprocess.html).
Any dispute referred to the ombudsman will have a turnaround time of 5 – 120 days. An order may be disputed in a court of law but only on a valid point of law.
The new Ombudsman shall hopefully provide a speedy conclusion to dispute resolution.