The Community Schemes Ombud Service (CSOS) Act came into force in 2016 in order to regulate the operations of all community schemes in South Africa.
Community schemes are housing schemes where the common use and responsibility for the land and buildings within the scheme is shared.
There are three fundamental purposes of the CSOS Act:
There is often conflict when there is shared responsibility for land and building and, the CSOS aims to manage operations and provide efficient and cost-effective methods for dispute resolution within community schemes.
Typical examples of community schemes include:
The Act requires all new community schemes to register with the CSOS within 30 days of the date on which they were incorporated.
The CSOS is funded by the levies collected from community schemes. The Act stipulates that certain levies are to be paid by the schemes to the CSOS on a quarterly basis.
The schemes collect prescribed monthly levies from each unit within the community on a monthly basis.
The CSOS levies are calculated according to the levies charged by the schemes. Below is a table that outlines how the levies are determined:
Therefore, depending on the community scheme levy amount, the prescribed minimum CSOS levy is R0 and the maximum is R40 per unit, per month.
CSOS levies are collected by the schemes and must be paid at the end of March, June, September and December every year.
It’s important to distinguish between a scheme’s monthly levies and special levies as special levies collected by the scheme do not form part of the CSOS levy calculation.
The regulations provide for the following exclusions when it comes to CSOS levies:
When schemes do not comply with the Act’s provisions, they will be faced with significant penalties. Schemes will be charged an interest rate of 2% per month for non-payment of levies.
According to section 34 of the Act, persons who fail to comply with the Act will face conviction and may be liable to a fine or imprisonment for a period of up to 5 years, or both.
When an individual is convicted for a second time for the same offense, he or she will be liable to a fine or imprisonment for a period of up to 10 years, or both.
Schemes will make use of normal debt collection methods to collect outstanding levies from unit owners.
How to Recover Outstanding Levies - The Legal Process in South Africa
Community schemes are responsible for managing and administering the scheme and it’s owners in a professional manner.
This includes timeous collection of levies and payment thereof to the CSOS. If you would like more information about the CSOS and community schemes in South Africa, please feel free to contact our attorneys in Cape Town and Johannesburg.
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