CSOS deadline for registration is 31st March 2018

CSOS deadline for registration is 31st March 2018.
31 March is the deadline for all Community Scheme’s to be registered AND have their CSOS levy payments up to date. Many scheme executives (the new term for trustees and directors in housing estates or complexes) are still not sure if their scheme should even register with CSOS, or how to go about it.

In this article, I hope to provide you with all the information you will need to ensure your scheme is registered and up to date with the CSOS requirements.

Why should my scheme be registered with CSOS?
In short, because it is the law. The Community Schemes Ombud Service Act was established in 2011 and came into effect on the 7th of October 2016. Schemes are responsible to register and send CSOS all their scheme governance documents. They are also to collect CSOS levies (which are paid once every quarter) and submit an annual return not more than 4 months after their financial year-end each year.

So, I have to pay CSOS levies?

That’s correct, all community schemes registered with CSOS are obliged to collect from their members monthly contributions (levies) that are paid over to CSOS on a quarterly basis. Some schemes and owners maybe exempt, like those with individual levies less than 500 per month or a unit where the monthly household net income is below R5 500.

CSOS levies for each unit (owner) are calculated by deducting the first R500 of the basic levy (all levies of R500 or less are exempt from paying CSOS levies), then calculating 2% of the remainder of the levy, to a maximum of R40 per month.

So, how do you know if my scheme, complex or estate falls under CSOS’ definition of a community scheme? According to the Community Schemes Ombud Service Act a Community Scheme is defined as any scheme or arrangement in terms of which there is shared use of and responsibility for parts of land and buildings, including but not limited to a sectional titles development scheme, a share block company, a home or property owner’s association, however constituted, established to administer a property development, a housing scheme for retired persons and a housing co-operative as contemplated in the South African Co-operatives Act. So basically, if you live in a Body Corporate, Home Owner’s Association, Retirement Scheme, Shareblock or even have a Residents Association where owners jointly pay levies to maintain shared roads or infrastructure, your scheme should be registered with CSOS. Also remember that this is NOT only limited to residential schemes; business, retail and industrial parks or schemes are also considered community schemes.

But who is CSOS?
CSOS (the Community Schemes Ombud Service) is a statutory body that provides dispute resolution services for anyone that lives in a Community Scheme, or that is a member of a Community Scheme. Established in terms of the Community Schemes Ombud Service Act [Act 9 of 2011) CSOS regulates the conduct of parties within community schemes and ensures their good governance –www.csos.org.za

CSOS will also be responsible for keeping track of various governance matters such as Reserve Funds and Fidelity Insurance. They will also review Rules changes and 10-year Maintenance Plans.

How do I register my scheme with CSOS?
In terms of section 18(3) of the regulations on the Community Schemes Ombud Service, all community schemes are required to file a registration with CSOS. The registration form requires the community scheme to detail their domicile, governance documents, the executive committee, managing agent, the financials and authorized representative.

Registration can only be filed using the CS1 Form which you can find on our website: CSOS Form Registration of Community Scheme

Community Schemes can download the CS1 Form, fill in the details, attach the required Annexures and email to registration@csos.org.za or hand deliver at of any of the CSOS offices.

The annual return form CS2 is also available on our website at: CSOS Form CS2 Submission of Annual Return

It is advisable to make use of an Authorised Representative or appoint a CSOS officer for your scheme. Many schemes choose to make use of the services of their auditor to help them with this.

Registering with CSOS might sound like unnecessary admin and you must pay those quarterly levies, but there might just be some method behind the perceived “madness” as CSOS also brings a few very important benefits:

All schemes must submit their governance documentation, which greatly reduces the risk of valuable documents going missing, not being up to date or as in the case with Conduct Rules, not complying with legislation.

Reserve Funds and compulsory Fidelity Cover will also ensure for better Financial Management. Sadly, in many schemes poor financial management has often left owners with hefty special levies or in extreme cases properties that lost significant value due to of a lack of maintenance, often because of a shortage of funds.

Arguably though, CSOS’s most important role will be in providing affordable dispute resolution options to owners and schemes alike. In the long run, fewer disputes that result in costly arbitrations or court cases will not only save schemes and owners money, but also make for better-managed schemes which are more enjoyable to live in.

If you have any difficulty with your CSOS registration, or have any question please don’t hesitate to contact me on johan@amiti.cloud

CSOS deadline for registration is 31st March 2018

Johan NothlingAuthor
Johan has been in the Community Scheme industry for more than 10 years with 8 years of experience as a senior portfolio manager. He currently consults on and helps to design online management solutions for Community Schemes.

Please note that the views and opinions expressed in articles and/or blog posts are those of the authors concerned and do not necessarily reflect the official policy or position of Amiti Solutions.