CSOS

• Acting Chief Ombud, Thembelihle Mbatha

ON A PATH TO TRANSFORM GATED COMMUNITIES… THE CSOS INITIATIVE

In the vibrant and diverse landscape of South Africa, the concept of community living has taken a significant leap forward. With the country being the fourth largest hub of community schemes globally, the appeal of shared spaces, collective security, and communal management has drawn many South Africans towards this modern way of living. Accounting for nearly 30% of the residential property value, these schemes are not just homes but a testament to a changing society.

Historically, the governance of community schemes like sectional title complexes, retirement housing schemes, and share blocks was a fragmented affair. The lack of regulation led to self-managed entities often mired in disputes and inefficiencies. Recognizing the need for oversight and structure, the Community Schemes Ombud Service (CSOS) was established under the CSOS Act. This pivotal legislation aimed to introduce an era of orderly and well-managed community schemes.

The CSOS's mandate is multifaceted, focusing on dispute resolution, stakeholder education, documentation control, and promoting good governance. By fostering stability and harmonious relations, the CSOS ensures that community schemes are not just well-run but also embody the spirit of equality and human dignity as enshrined in South Africa's Constitution.

The Minister of Human Settlement's vision, as outlined in the CSOS Annual Report 2023/24, stated that the human settlement trajectory proposes that by, “by 2050 visible results from effectively coordinated spatial planning systems shall have transformed human settlement in South Africa into equitable and efficient spaces, with citizens living in close proximity to work with access to social facilities and necessary infrastructure.”

To this end, the CSOS is an important regulatory in the Human Settlement’s family of entities. At the core of the strategic intent of the Entity is to ensure that it meets the Constitutional mandate – which is human dignity, the achievement of equality and the advancement of human rights and freedom.

Community Schemes are defined in the CSOS Act as "living arrangements where there is shared use of and responsibility for land/buildings such as sectional title, homeowners’ associations, retirement housing schemes, share block companies and housing cooperatives”.

With an estimated 70,000 community schemes and a growing trend towards gated living, the sector represents a significant portion of the nation's economy. The services these schemes require, such as security, gardening, auditing, and management, are predominantly sourced from small and medium enterprises (SMEs), making it a vital contributor to job creation.

However, the current state of affairs is not without its challenges. The sector's economic potential is often hindered by a lack of inclusivity and transparency. Services are frequently procured from familiar companies, sidelining emerging black-owned SMMEs and perpetuating a cycle of inequality.

To address this, the CSOS is advocating for a transformation in procurement practices, mandating opportunities for these emerging businesses and ensuring that the benefits of community living are accessible to all.

The transformation of the Managing Agents sector is particularly crucial. As the entities responsible for the day-to-day operations of community schemes, their role is central to the sector's success. The CSOS's push for transparency and economic inclusivity will not only reshape the landscape of community living but also contribute to the broader narrative of South Africa's growth and development.

A Sector in Need of Change: The CSOS's Call for Transformation

The CSOS initiative is more than just a regulatory measure; it's a catalyst for change. By championing good governance, equitable opportunities, and a commitment to human rights, the CSOS is paving the way for a future where community schemes are not just places to live but beacons of a transformed and thriving society.

The Community Schemes sector in South Africa, managing an estimated R800 billion in assets, stands at a crossroads. As noted by the Department of Human Settlement Minister, Ms Mamoloko Kubayi, during the CSOS Inaugural Indaba, the time for change is now. The sector's transformation is not just a matter of regulatory compliance but a crucial step towards socioeconomic development and equitable opportunities for all South Africans.

The industry currently faces a number of significant challenges, including but not limited to:

Inadequate change within the community schemes industry: The Community Schemes sector

in South Africa is grappling with a persistent lack of transformation, posing significant challenges to the realisation of socio-economic development and equitable opportunities within the country.

Despite notable changes in the broader social and economic landscape, the Community Schemes sector has not kept pace with the evolving needs and expectations of a diverse and inclusive society.

Community Schemes account for nearly 30% of the residential property value, these schemes are not just homes but a testament to a changing society.

Inadequate Representation and Participation: The sector continues to face challenges in achieving meaningful representation and participation from historically disadvantaged groups, including but not limited to women, youth, persons with disabilities, and military veterans. Recent statistics reveal a disproportionate lack of diversity in the population of managing agents, residents, and service providers within community schemes.

Limited Adaptation to Societal Changes: Recent years have witnessed substantial changes in demographics, governance structures, and technological advancements within the Community Schemes environment. However, the sector has struggled to adapt comprehensively to these changes, resulting in an environment that does not fully reflect the diverse composition and evolving preferences of the South African population.

Limited Economic Empowerment Opportunities: Despite the significant economic value of the Community Schemes sector, recent data highlights a lack of effective measures to empower

historically disadvantaged individuals economically. The procurement landscape within the sector remains skewed, with limited opportunities for black -owned businesses and entrepreneurs to participate and thrive.

These challenges underscore the need for a strategic overhaul of the Community Schemes sector. Transformation is imperative to close the existing gaps, empower marginalized communities, and align community schemes with the nation's broader socio-economic objectives.

The CSOS has outlined two key themes for the transformation:

1.Capacitation and Access to Funding:

Strengthening the capabilities of community schemes and facilitating financial support.

2.Market Access and Opportunities:

Opening the market to new players, particularly emerging black-owned SMMEs, to foster inclusivity and economic growth.

“The transformation journey has commenced, with the CSOS leading the charge. “We are actively engaging with industry stakeholders through roundtable discussions to secure their support and commitment. The goal is to create sustainable and inclusive neighbourhoods that embody sustainability, inclusivity, and community engagement.

As the CSOS continues to push for these changes, we call upon all stakeholders to join in this transformative initiative.

It's a collective effort to reshape the gated communities’ sector into a model of diversity, vibrancy, and inclusivity, reflecting the rich tapestry of South African society” says the Acting Chief Ombud, Ms. Thembelihle Mbatha.

WHO IS THE CSOS?

Established in terms of the Community Scheme Ombud Service Act, 2011 [Act 9 of 2011] to regulate the conduct of parties within community schemes and to ensure their good governance, the CSOS came into operation on the 7th of October 2016.

The CSOS plays a multifaceted role in promoting good overnance, fostering harmonious relations, conducting educational ampaigns, enhancing community schemes' tenure, and implementing organisational measures to transform the sector.

WHAT IS A COMMUNITY SCHEME?

A community scheme is defined as any scheme or arrangement where there is shared use of and responsibility for parts of land and buildings, including but not limited to:

a. Sectional titles development schemes

b. Share block companies

c. Home or property owners' associations (inclusive of non-profit companies and common law associations)

d. Housing schemes for retired persons; and

e. Housing co-operatives.

COMMUNITY SCHEMES MUST BE REGISTERED WITH THE CSOS BY LAW

In terms of the CSOS Act, read with Regulation 18(2)(a)(v) of the CSOS Regulations, all community schemes must be registered with the CSOS within 30 days after the incorporation of the community scheme. CSOS Connect, our selfservice digital platform which was launched in November 2022. The system allows stakeholders to easily register their schemes online.

CONTACT INFORMATION

Address: Berkley Office Park, 8 Bauhinia Street, Highveld Techno Park, Centurion, 0169

Call: 0800-000-653

E-mail: info@csos.org.za

Website: www.csos.org.za

Registration: www.csosconnect.org.za