Community Schemes Ombud Services (CSOS) has recently released new consolidated practice directives. These directives increase the compliance responsibilities and governance for Trustees, Managing Agents and other relevant stakeholders involved in community schemes. Community Schemes are required to operate in accordance with the Community Schemes Ombud Services (CSOS) Act, Sectional Title Schemes Management (STMS) Act and other applicable legislation and regulations.
These schemes include: Home Owners Associations, Housing Co-operatives, Housing Schemes for Retired Persons, Sectional Title Schemes, and Share Block Companies. These Schemes are custodians to large amounts of sensitive personal information of their members and residents. This includes identity numbers, contact details, levy payment records, biometrical information and more…
The Protection of Personal Information Act (POPIA) and Promotion of Access to Information Act (PAIA) requires that such information is processed lawfully, securely and only for legitimate purposes.
Non-compliance to POPIA and PAIA can not only trigger enforcement actions from the Information Regulator of South Africa but also from CSOS. CSOS monitors all compliance obligations of community schemes and according to Section 34 of the CSOS Act has the power to enforce action when schemes fail to meet their mandatory obligations.
When dealing with non-compliance, CSOS follows a dual approach first offering guidance and non-punitive support but will escalate to formal enforcement by notifying the National Prosecuting Authority.
Enforcement options include:
- Informal Mediation: If a scheme is in breach of a minor contravention, notifies CSOS and is willing to rectify the non-compliance then CSOS may assist through informal mediation.
- Intervention Action: If Non-compliance exists, CSOS issues a verification letter requiring the scheme to rectify the issue within a reasonable time. Failure to do so will result in a notice of non-compliance.
- Verification & Monitoring: CSOS compliance inspectors (CEIs) may conduct site visits and request documents to confirm if a scheme meets statutory duties. Self-managed schemes are also subject to these checks.
- Requests for information: If CSOS Suspects contravention, they may request relevant records from the scheme. Failure to respond or providing false information will lead to prosecution under the offence of Section 34(1) and (2) of the CSOS Act.
If a community scheme is found guilty of non-compliance with the new consolidated practice directives CSOS can issue administrative fines. In addition to this, non-compliance with POPIA or PAIA may result in serious penalties imposed by the Information Regulator. The Information Regulator has the authority to issue administrative fines of up to R10 Million and in some cases, individuals can face criminal charges including imprisonment. Furthermore, CSOS can also take action if a scheme fails to provide records, ignores directives or obstructs compliance. Offenders may face fines or imprisonment up to 5 years, and for repeat offences, up to 10 years.
For Community Schemes, the message is clear: Compliance with POPIA and PAIA is not optional. The Information Regulator of South Africa has the authority, processes, and enforcement mechanisms to ensure compliance.
