What is a community scheme?

Section 1 of the Regulations to the Community Schemes Ombud Service Act 9 of 2011 (“the CSOSA”), describes a “community scheme” 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 title 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.

In this article, we will focus on Home Owner’s Associations (HOAs) and bodies corporate.

Firstly, you need to ensure that you are fully au fait with the relevant legislation which underpins your appointment as a community scheme executive.

• Companies Act 71 of 2008, for directors of a non-profit company and
• Sectional Titles Act, No. 95 of 1986 and Sectional Titles Schemes Management Act, No. 8 of 2011), for trustees of a body corporate
• Governing documentation, such as
  • Memorandum of Incorporation (in the case of HOAs formed under the Companies Act) or Constitution (in the case of a common law HOAs)
  • Rules applicable to your body corporate or HOA

Furthermore, you must also familiarise yourself with the duties of a community scheme executive, as prescribed under the CSOSA, which are in addition to the duties found in the relevant legislation or governing documentation of community schemes.

The duties of a community scheme executive under the CSOSA

Let us look at the duties of a community scheme executive prescribed by the CSOSA. Firstly, attendance at, and preparation for, all executive and general meetings, is compulsory for scheme executives, unless an executive has a reasonable excuse for not being able to attend such a meeting, and following notification to the chairperson of the executives, they are excused.

In order to effectively fulfil the role of scheme executive, such a person, whether or not they are a member of the community scheme, must take reasonable steps to inform and educate themselves about their scheme, and its governance documentation, such as a constitution, memorandum of incorporation, and management or conduct rules.

The scheme executive must take reasonable steps to obtain sufficient information and advice relating to any matter due to be decided on, in order to make conscientious and informed decisions in their executive capacity.

The scheme executives must further exercise an active and independent opinion in respect to the aforementioned decisions taken, and in this regard the other executives cannot simply rely on the decision of the chairperson, but must take their decision independently of that of the chairperson, which may conflict.

Paddocks Community Scheme Specialists offer UCT training courses, legal advice, consulting and books for those involved in sectional title schemes, homeowners’ associations and other forms of community schemes.

Should you have any queries relating to this topic, contact Paddocks via email at consulting@paddocks.co.za or telephonically on 021 686 3950.

By Zerlinda van der Merwe, specialist community schemes attorney at Paddocks

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