The Community Schemes Ombud Service (CSOS) has issued a new legal directive that changes how trustees and scheme managers govern residential complexes, eliminating long-standing “undesirable estate rules” that have frustrated many residents.
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“These are rules which are sometimes implemented by trustees that could be deemed unconstitutional or discriminatory,” explains Grant Smee, chief executive officer of Only Realty Property Group.
“This has been an issue for some time in South Africa, and the new legal directive, which is aimed at trustees and scheme managers, provides residents and tenants of sectional-title properties with a much more equitable framework in which to live.”
A new era of accountability
The CSOS Consolidated Practice Directive 1 of 2025 (signed 18 July 2025) consolidates and supersedes prior CSOS practice directives, creating a single reference for community-scheme governance. It is important to note that the directive is not new legislation: it is practice guidance issued under section 36 of the CSOS Act, providing direction but not creating primary law.
“This directive sets out stricter compliance standards around scheme governance, conduct rules and penalties while also ensuring the rules are more transparent and legally compliant,” notes Smee.
“For residents and homeowners, this is beneficial as there’s now greater clarity on what rules can and cannot be enforced, as well as reinforcing a members’ rights to access scheme records, with certain documents required to be provided within five to 10 business days.”
He adds that for trustees and managing agents, the stakes are higher as non-compliance is no longer simply an administrative matter: “Certain contraventions of the CSOS Act can lead to a fine or imprisonment of up to five years for a first offence, or up to 10 years for repeat offences.”
Tackling undesirable rules head-on
Smee cites a case that went before the Pietermaritzburg High Court regarding regulations at a KwaZulu-Natal golfing estate, which were deemed unconstitutional.
“Residents were being subjected to excessive speeding fines within the estate by the Homeowners Association, and domestic employees were being limited in their freedom of movement. As the judge noted, this ‘prevailed in the apartheid era’, showing the kind of overreach CSOS aims to curb.”
CSOS’s annexures flag categories of undesirable rules including discriminatory limits on domestic workers, compelling private arbitration, and unfair levy/voting limits. Practitioners also caution against rules that enforce specific service providers or unreasonably restrict letting/sales; and CSOS assesses these against the undesirable-rules criteria.
“If your scheme currently has rules like these in place, they may be struck down by CSOS adjudicators,” explains Smee. “You cannot be subjected to rules that violate your constitutional rights or impose unfair limitations. The directive strengthens your position when dealing with overreach by trustees or managing agents.”
Regulated fines and enhanced compliance
Smee notes that excessive or arbitrary fines have long been a point of contention in sectional-title complexes – something that the new directive addresses.
“Penalties imposed by Trustees must follow the fair process set out in the scheme’s CSOS-approved rules (e.g. written notice(s) and an opportunity to be heard) says Smee. “Additionally, fines must not exceed the monthly levy for your unit, and there is no place for open-ended fines.
“Any resident who receives a fine should request a copy of the scheme’s conduct rules and check that it aligns with the CSOS directive. If not, you may have grounds to challenge it.”
Beyond fines, Smee says that the new legal directive enforces stricter compliance with broader governance requirements. For residents, this is where documents like the POPI (Protection of Personal Information) Act, levy structures and registered conduct rules come into play.
“When investing in a sectional-title unit, it’s important to ask the managing agent or trustees for copies of the scheme’s POPI manual and conduct rules, and to check these are registered with the CSOS,” Smee advises. “These documents outline how your personal information is stored and protected, what behaviour is expected of residents, and how levies are calculated and enforced.”
Considerations for prospective buyers
“Buying into a sectional-title property means buying into a community, with its financial obligations, governance and long-term responsibilities,” says Smee. “Understanding the scheme’s compliance status helps you avoid unpleasant surprises later.
“For homebuyers considering a sectional-title scheme, the new directive makes estate investments more attractive, but regardless of this, it’s always important to do your due diligence.”
Smee advises the following before signing an Offer to Purchase (OTP):
Request documents: Such as the CSOS-approved conduct/management rules, PAIA/POPIA compliance info (e.g., PAIA s51 manual), levy schedules, special levies history, building-insurance valuations, and the 10-year maintenance plan.
Review carefully: Check for rules that may be unconstitutional, discriminatory or inconsistent with CSOS guidance.
Ask about levies: Query the levy structures and ask about any special levies planned.
Know your rights: Ask about the fines and penalties process, checking that these do not exceed your levy.
Stay engaged: Attend AGMs where trustees are elected and decisions about levies and maintenance are made.
“Ultimately, the directive is designed to promote fairness, accountability and compliance across South Africa’s sectional-title and estate schemes. But for residents, it is also about empowerment,” says Smee.
“By knowing your rights and understanding the governance framework, you can play an active role in ensuring your complex is well-managed and compliant. This benefits not only your day-to-day living environment but also the long-term value of your property.”
