Despite challenges, dispute resolution service on track

WITH more than 21 000 schemes having applied to be registered with the Community Schemes Ombud Service, this new dispute resolution process in the property sector looks set to be a great success despite challenges from some homeowners’ associations, says specialist sectional title attorney Marina Constas.

“Over 2 000 applications have been processed. Of all the mediations which have been undertaken, a high percentage have been resolved,” says Constas, who is a director of BBM Attorneys.

While she concedes that the onslaught of queries and applications for dispute reso- lution by the ombud service will inevitably result in teething problems, she believes that once the correct infrastructure becomes operational, and once the quarterly payments are received from the schemes and the service achieves its goal of becoming self-funding, it will prove a positive development for anyone involved in community housing schemes like townhouse complexes and retirement villages.

“It will ultimately provide a world-class alternative dispute resolution platform, providing education and consumer campaigns, which will empower schemes, owners, trustees and directors, and which will cement transformation and better access to justice for all.”

Working as a specialist sectional title attorney with managing agents, owners and trustees, and hosting workshops on the new legislation, has given her an excellent platform from which to gauge the industry’s response to the new property laws, Constas says, including the creation of an ombud, which became effective last October.

Her position on the Community Schemes Ombud Service Board further enhances the holistic picture she has of events playing out in the industry following the implementation of the new Community Schemes Ombud Service Act.

Constas says the changes have mostly been embraced, especially by the large umbrella organisations like the National Association of Managing Agents and the Association of Residential Communities.

Most proactive managing agents have moved speedily to update their employees on the changes and train them in the implementation of the act.

However, there have been some naysayers, Constas says.

“They viewed the implementation of the Community Schemes Ombud Service levy as another government tax waiting to disappear into the ether; this opposition has been quite underwhelming, and once explanations were provided by managing agents and the ombud service itself, the dust seemed to settle and many fears were allayed.”

The area in which the Community Schemes Ombud Service Act has not been as well received, she says, is by homeowners’ associations, those hybrid schemes which fall awkwardly into the Companies Act fold or loosely-formed constitution definition.

“These have pushed back the hardest against their inclusion as a community scheme within the definition of the legislation. Six independent residential estates forming The Midstream Residential Community Development have commenced with a legal challenge surrounding the funding of the ombud service and the imposition of the levy.

“The legal team at the Department of Human Settlements will have to face the challenge, and in all likelihood a few more, to properly bed down the new system.

“It must be borne in mind that the emergence of these acts has not come about on a whim. We have been waiting for this legislation for just under 20 years... to bring to South Africa a combination of the best and most workable provisions,” says Constas.