Resolving Disputes in Community Schemes

Rule changes for sectional title community schemes. With the new Community Schemes Ombud Services Act having come into effect just a little more than a year ago, it is clear that one of the biggest issues Community Schemes are still struggling with is how to resolve disputes internally before it ends up with the Ombud Service.

Many members and scheme executives of schemes forget that CSOS will not hear any complaint, from either an owner, resident or even trustees/directors until they are satisfied that the community made an attempt to first resolve the matter internally:

Paragraph 40. Of the Community Schemes Ombud Service Act:

After receiving an application, an ombud may require: (c) the applicant to provide evidence that an internal dispute resolution mechanism has been unsuccessful.

This means that every Community Scheme needs to develop a way to first try resolve disputes internally before they call upon the services of the Ombud. One of the easiest ways to start this process is to arrange a mediation session between the disputing parties.

The following are things to keep in mind when trying to resolve a dispute by way of a mediation session:

  1. Trust – this is a BIG factor when dealing with issues. A trustee that is going to oversee the internal dispute process must understand how important confidentiality is and cannot discuss disputes with other members or owners in the scheme.
  2. Decision makers must be neutral, it does become very difficult for a decision maker to be neutral when he/she is chosen from within the community scheme and in difficult cases it may require the use of an outside person. Try and use a qualified mediator if necessary, especially when a dispute is between the trustees and an owner.
  3. Participation – you should always try to get full participation by all involved parties. There is nothing more frustrating than going through a whole process of resolving a dispute for it only to be brought up again weeks, or even months later because an affected party was left out of the process.
  4. The resolution process must not be too time consuming. Usually the longer a matter is left unattended the bigger, and often costlier, it gets!
  5. Communicate!!! It is critical that people are aware that there is a formal mechanism available in the scheme for resolving disputes. Communicating with those in charge of the dispute resolution process must also be easy. Often the lack of communication turns out to be the biggest reason for tension between owners and community scheme managers!!
  6. Any outcome reached at a mediation must be communicated to all involved parties in writing. A mediation decision can be made an order of court if it is agreed upon by all parties.

The South African Association of Mediators lists the contact details of qualified independent mediators on their website. Mediators charge their own rates and depending on the complexity of the matter could cost anywhere from a couple of hundred rand an hour to as much as R 6000 per day for attending a mediation. Mediators will also charge a fee for compiling a report and travelling:

Conflict in companies or even sporting teams often gets resolved by changing mangers or even trading players, however in communities affected parties are often owners or residents that can’t simply be replaced. Having an effective way of dealing with disputes will not only save Scheme Executives (trustees or directors) from wasting unnecessary time, but could also save everyone involved a lot of money.

Rule changes for sectional title community schemes.

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.