The effect on all community schemes moving forward
On 18 July 2025, the Community Schemes Ombud Service (“the CSOS”) published their latest, and consolidated, version of all their Practice Directives, and very aptly named this, “Consolidated Practice Directives 2025.”
What is the aim of these consolidated practice directives?
The main purpose of the consolidation was to ensure that there was a single reference document containing each CSOS Practice Directive ever issued, with the belief that it would be more convenient for stakeholders with everything contained in a single document.
However, the result is an extremely lengthy document of over 200 (two hundred) pages, with various areas that can be difficult for the traditional community scheme stakeholder to navigate and understand.
This article aims to highlight some of the most pertinent items and matters addressed in the new Consolidated Practice Directives 2025, and to explain the effect that these provisions will have, not only on the community schemes themselves, but the various stakeholders playing a role in them.
What are the key updates?
The first important thing to highlight is that the Consolidated Practice Directives 2025 have repealed all Practice Directives previously issued, meaning that the Consolidated Practice Directives 2025 now form the central source of each Practice Directive ever issued by the CSOS up until this point.
In addition, these Consolidated Practice Directives 2025 are applicable to each type of community scheme, as defined in the CSOS Act 9 of 2011, and it has been confirmed that each community scheme is required to be registered with the CSOS, and pay the quarterly CSOS contributions.
It must be noted that in certain schemes, e.g. where there is a frail care centre component, when residents are living off social grants, and where the monthly levy contribution is less than R500.00 (five hundred rand), application can be made to the CSOS for the waiver of these quarterly CSOS contributions.
A further matter highlighted in the Consolidated Practice Directives 2025 is the distinction between an “executive managing agent” and an “administrator”.
What is an executive managing agent?
An “executive managing agent” is a qualified managing agent with the required skill and experience, who is appointed to carry out all the functions and powers of the trustees of a body corporate, in accordance with Prescribed Management Rule (“PMR”) 28 of Regulation 1 of the Annexures to the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”).
It was, once again, confirmed in the Consolidated Practice Directives 2025 that a body corporate can apply to the CSOS for the appointment of an executive managing agent, in accordance with PMR 28(2).
However, an additional requirement was established in the instance when a body, in accordance with section 16 of the STSMA, makes an application for the appointment of an administrator in the relevant Magistrate’s Court. This additional requirement now compels any person or party making an application to a Magistrate’s Court for the appointment of an administrator to simultaneously also serve the relevant application for the appointment on the CSOS.
Furthermore, it is noted, as per the Consolidated Practice Directives 2025, that the CSOS have compiled a panel of administrators, similar to their panel of executive managing agents, and it is alleged that in the instance of an application for the appointment of an administrator at the Magistrate’s Court, the CSOS may also be requested by the Magistrate’s Court to recommend an administrator from the CSOS Panel. In addition, an applicant may also request and choose an administrator for appointment from the CSOS panel.
Another important matter addressed in the Consolidated Practice Directives 2025 is the topic of undesirable rules in a community scheme.
Although the CSOS still only has the legal mandate to approve management and conduct rules in a body corporate, as per section 10 of the STSMA, the CSOS have now highlighted that there is nothing stopping them from declaring any rules within any type of community scheme as unreasonable and undesirable, and therefore invalid.
Examples of undesirable rules
Some notable examples of undesirable rules that apply to all community schemes, not only bodies corporate specifically, as outlined in the Consolidated Practice Directives 2025, are:
- The imposition of penalties without due process: the CSOS will immediately determine that a penalty has been unreasonably raised if, before the imposition of the penalty, the offender has not first been provided with a formal warning and/or the offender has not been provided with an opportunity to defend themselves against the contravention. This aims to uphold the legal principle of audi alteram partem (“listen to the other side”);
- Rules attempting to recover the legal costs of the CSOS dispute resolution processes from a member will not be approved: the CSOS strongly believe that, because it provides a free dispute resolution forum, it is unnecessary for any party participating in the dispute resolution process to make use of professional legal services. In light of this opinion, they will declare any rule attempting to recover any CSOS dispute-related costs as unreasonable and undesirable;
- Proxies: in bodies corporate, persons may appoint any person to represent them as a proxy in a general meeting, and it is emphasised that any person may only hold 2 (two) proxies. In the event of a member, as a sole registered owner, owning a unit, they may hold 2 (two) proxies in addition to their own unit’s vote.
However, in the event of a representative of a juristic person owner, i.e. a company, close corporation, trust, etc., or in the event of a unit having co-owners, the natural person elected to represent and attend the general meeting, on behalf of the co-owned unit or unit owned by a juristic person, can only hold 1 (one) proxy in addition to the proxy they are holding authorising their representation of the unit;
- Short-term letting: the CSOS will not approve any rule imposing that only a single or certain operators/platforms may be used for the purpose of short-term letting in a scheme, but it not unreasonable to require any short-term letting operators register with the community scheme for security and access control purposes;
- Disconnection of services (water, electricity): this is quite an important confirmation from the CSOS, as they have noted that any rule seeking to restrict and/or disconnect water and/or electricity supply to members due to non-payment of levies is not undesirable, provided that the legal due process prior to the disconnection, i.e. the relevant application for disconnection through the appropriate Court, has been complied with by the community scheme, and
- Cannabis: any rule that prohibits a resident from using and growing cannabis within their unit is undesirable and will be declared unreasonable, as, in terms of legislation, the use possession of cannabis by an adult person in private for the adult’s personal consumption in private is legally permissible.
To avoid any potential disputes regarding possibly unreasonable and undesirable rules in the future, it is recommended that community schemes review their current governance documentation to ensure compliance with the above.
Changes in the Dispute Resolution Process
On the topic of disputes, the Consolidated Practice Directives 2025 emphasised and concreted the recommended dispute resolution process to be followed within community schemes, and highlights that any affected party with a material interest in a dispute, as per section 39 of the CSOS Act 9 of 2011, is permitted to launch an application for dispute resolution at the CSOS.
An interesting change to the dispute resolution process are that the CSOS has totally removed its internal capabilities of reviewing and/or setting aside of Adjudication Orders which contained material errors. Instead, they are emphasising that once an Adjudication Order has been handed down by an Adjudicator, both the Adjudicator and the CSOS are functus officio, meaning that they no longer have any powers or functions applicable to the Adjudication Order or the dispute resolution process.
The above has the effect that now, in the event of an Adjudicator coming to an incorrect conclusion in an Adjudication Order, an aggrieved party has no other option but to make the relevant application to High Court in the form of a review, if the Adjudication Order contained procedural faults and/or irregularities, or an appeal, if the Adjudication Order contained material faults and/or errors in law.
Protection for personal information in community schemes
The final topic addressed in the Consolidated Practice Directives 2025 that this article will discuss are the requirements placed on community schemes in terms of the Protection of Personal Information Act 4 of 2013 (“POPIA”) and the Promotion of Access to Information Act 2 of 2000 (“PAIA”).
In this regard, a community scheme has a duty to ensure that the personal information of its members and residents are protected, but the CSOS has emphasised that a member of a community scheme is deemed, by virtue of ownership or occupation of a unit within a community scheme, to have consented to their personal information being stored and/or shared with the relevant parties, i.e. the of trustees/directors, or any other relevant governance structure of a community scheme, for the purposes of managing the affairs of the community scheme.
In addition, should the community scheme instruct an operator, e.g. a managing agent or security company for access control, to process personal information of community scheme members or residents, an operator’s agreement must have been concluded by the community scheme and the operator. Furthermore, the operator must notify the community scheme immediately if there are reasonable grounds to believe that the personal information of the community scheme members has been accessed or acquired by an unauthorised person.
Further to the above, the CSOS have noted that the processing of information of a member of a community scheme must only be limited to the management of the community scheme such as collection of levies, compliance with community scheme rules, maintenance, and security of the community scheme. Therefore, the sharing of personal information with members of the community scheme or debt collectors relating to the defaulters in terms of levy payments or members who have failed to adhere to the community scheme rules, will not require a member’s consent.
In finality on this point, and particular emphasis must be placed on this, the CSOS have noted that a member of the community scheme, i.e. not persons forming part of the governance structure of the community scheme or an operator so empowered in terms of contract, shall not be entitled to access other members’ personal information without their consent, other than information readily available in terms of the governance or management of affairs of the community scheme.
Conclusion | The impact is evident
In conclusion, it is clear to see the far-reaching effects of this new CSOS Consolidated Practice Directives 2025, and we hope that this article made some of the most pertinent points slightly more digestible and easier to understand. We know that working with the CSOS can often be a tricky process, and our doors are always open should you require any assistance in this regard.
Have any questions on the above? Contact us today on +27 28 312 4474 or at hpm@hermanus.co.za.
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