ATC231212: Report of the Portfolio Committee on Human Settlements on the Attendance and Participation In the Community Schemes Ombud Services (CSOS) Indaba from the 3 to 4 August 2023, in Canvas, Riversands in Midrand, Gauteng Province, Dated 8 December 2023

Human Settlements

Report of the Portfolio Committee on Human Settlements on the Attendance and Participation In the Community Schemes Ombud Services (CSOS) Indaba from the 3 to 4 August 2023, in Canvas, Riversands in Midrand, Gauteng Province, Dated 8 December 2023

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The Portfolio Committee on Human Settlements (hereafter called the Committee) attended the CSOS Indaba from 3 to 4 August 2023 in the Canvas, Riversands in Midrand, Gauteng Province.  The Committee reports as follows:

 

The Committee received an invitation to attend the inaugural Indaba which was held under the theme: “Governance and Regulations: Shaping the Future of Community Schemes”. The Indaba was aimed to promote good governance of community schemes educate community schemes occupiers, strengthen their governance, administration, and management, in terms of the CSOS mandate. It was also anticipated that the Indaba would further stimulate community discussions and allow community schemes to share lessons learned, challenges, and potential solutions which may be proposed as further enhancements or amendments of the CSOS legislation.

 

The delegation comprised of Chairperson of the Committee, Ms R M Semenya, (ANC); Mr M P A Tseki, (ANC); Ms N N Sihlwayi, (ANC); Mr C Malematja (ANC); Dr N V Khumalo (DA); and Mr L Mphithi, (DA) accompanied by the Committee Secretary, Ms K Pasiya-Mndende.

 

Ms T Mbatha, the Acting Chief Ombud, opened and welcomed all the attendees in the inaugural Indaba of CSOS.  She expressed her appreciation for the first and historical inaugural event and hoped that it would mark a significant milestone in the history of CSOS’s existence, regulations, and governance of the scheme. Ms. Mbatha explained that the gathering was about paving the way for the future of their communities living in gated communities. Community schemes play an important part in communities. She said that the Community Scheme Ombud Service (CSOS) was there to help and that there were mutual, impartial mediators who want to make sure that cases were resolved in a fair and efficient manner. She hopes that grievances will be heard and further explained to the house that there were desks outside (at the conference venue) to assist with cases.

 

Ms P Mthethwa, Chairperson of the Board set the tone of the inaugural event.  She stated that the objective of the Indaba was to confront and find solutions to the various problems that were multi-faceted but share one thing in common: the potential to undermine the very fabric of the communities. These issues range from non-payment of levies, conflicts of interests, and a whole lot of other issues. It was precisely under these challenges that CSOS find growth and transformation. The reasons that prompted the convention of the Indaba were rooted in the CSOS’s commitment to enhancing the well-being of community scheme occupants, unregistered schemes, lack of financial transparency, unauthorized expenditures, disputes over governance, and undermining the trust and harmony that community schemes should embody.

 

Ms M Kubayi, Minister of Human Settlements, delivered the keynote address virtually.  She indicated that the number of people living in community schemes had increased rapidly due to the growth of the middle class, migration, and rapid urbanisation.  Schemes were occupied by people from diverse cultural backgrounds, which meant that the governance of schemes must be sensitive to different cultural and religious practices. 

 

In terms of Section 4(2) of the CSOS Act 9 of 2011, CSOS is mandated to promote good governance of community schemes, provide a dispute resolution service, and provide education, information, documentation, and such services as may be required to raise awareness to owners, occupiers, executive committees and other persons or entities who have rights and obligations in community schemes.  Despite employed training interventions and awareness sessions, several residents in Community Schemes (gated communities or sectional titles) continue to struggle with several challenges relating to the governance of their Schemes. These governance concerns end up with the CSOS in the form of disputes that are lodged by those owners or residents who have some knowledge about the Community scheme Governance environment and the Sectional Titles Schemes Management Act. It is evident that, not all residents know about their rights in this regard.

 

Some of the challenges that hindered CSOS were the following:

• Unregistered Schemes - incomplete scheme universe.
• Non-payment of levies.
• Inadequate schemes governance.
• Lack of transparency regarding financial management of the Scheme.
• No audits of the financial statements.
• Utilization of funds in a manner inconsistent with approved budgets by the Body Corporate (unauthorized expenditure).
• Conflict of interests by Board of Trustees on business decisions such as procurement on behalf of the Scheme.
• Managing Agents collusion with some Trustees.
• Disputes on resolutions of the Annual General Meetings e.g., Disputes about who are the lawful trustees.
• Special levies imposed on members without appropriate SGM resolutions.
• Rules enforced without submission to CSOS for approval, including discriminatory and/or unconstitutional rules.
• No proper handover of records to new trustees and/or new managing agents.
• Lack of accountability in the management of schemes.
• General lack of maintenance of common areas within Schemes and leading to their dilapidation and resulting in loss of investment for homeowners.

 

The Indaba resolved that there should be:

• Increased awareness and understanding of CSOS and its offerings.
• Owners’ executives need to understand rights and obligations of staying in a gated community.
• Enhanced collaboration and networking among CSOS stakeholders.
• Improved compliance with CSOS regulations and Governance processes.

 

 

Report to be considered.