- Although South Africa has approximately 70,000 residential community schemes, fewer than 40,000 are officially registered with the Community Schemes Ombud Service (CSOS).
- In the past five years alone, more than 30,000 disputes have been reported, most commonly relating to governance disagreements, levy disputes, and rule enforcement.
- Experts caution that volunteer trustees frequently oversee multimillion-rand residential schemes without formal training or accreditation, which raises significant governance and financial risks.
Community schemes governance is playing an ever-greater role in shaping South Africa’s urban housing landscape, as more people move into estates, complexes, retirement villages, and sectional title developments.
Over the past decade, this model of housing has quickly transformed the way millions of South Africans live together and manage shared spaces.
Johlene Wasserman of VDM Incorporated notes that the sector has grown into a network of about 70,000 residential schemes nationwide. Yet, despite this impressive expansion, fewer than 40,000 schemes are formally registered with CSOS.
This gap between growth and registration is a persistent concern. CSOS annual reports have flagged this issue since 2017, showing that nearly half the sector still operates outside of formal oversight.
Wasserman points out that the implications go beyond paperwork. “Trustees and directors in community schemes are shouldering enormous legal and financial responsibilities, often without the training or support they need,” she says.
She adds that this points to a deeper structural challenge. “CSOS data shows a sector that has outgrown the governance model it was built on. With nearly half of South Africa’s schemes unregistered, it is even harder to maintain consistent standards or to intervene early when things go wrong.”
Disputes continue to rise
The strain on the system is clear from the volume of disputes that reach the Ombud each year. In just five years, CSOS has handled more than 30,000 disputes from residents, trustees, and managing agents.
Each year, the number of disputes now exceeds 16,000. While CSOS manages to resolve about 80 percent of these cases, the root issues remain much the same.
Wasserman says the patterns reveal broader governance challenges rather than just isolated misconduct. “Most disputes are not about bad behaviour, they are about uncertainty, inconsistent processes, and people trying to make complex decisions without the right tools,” she explains.
Many disputes centre on disagreements over governance decisions, levy contributions and budgeting, enforcement of scheme rules, access to governance records, and allegations of maladministration.
According to Wasserman, the ongoing nature of these disputes suggests that regulation has not kept up with the sector’s growth. “The sector has matured, but the governance framework has not kept pace,” she says.
Volunteer trustees under pressure
A major concern in community schemes governance is the heavy reliance on volunteer trustees and directors to manage large, complex residential operations.
These individuals are often responsible for managing budgets worth millions of rand, making financial decisions, enforcing scheme rules, and resolving resident disputes.
CSOS reports highlight this as a key pressure point. Wasserman says the root problem is the lack of mandatory training or formal qualifications for people in these leadership roles.
“Community schemes depend heavily on volunteer trustees and directors to run what are, in effect, multimillion-rand residential businesses, without any requirement for formal training, qualifications, or accreditation,” she says.
She warns that this can lead to inconsistent rule enforcement, uneven financial management, and governance decisions made without the right preparation.
A sector with a growing financial footprint
Beyond governance, the sector’s financial footprint is also growing. Income from CSOS levies now exceeds R400 million each year.
Compliance among registered schemes ranges between 70 percent and 80 percent. But non-compliance remains a challenge, especially among unregistered schemes.
Wasserman sees this as a systemic risk. “Non-compliance is a major problem, particularly among unregistered schemes, and that risk is only increasing as the sector grows. CSOS recognises that its funding model is vulnerable to governance failures at the scheme level.”
Technology reforms but mixed results
To modernise its operations, CSOS launched a digital platform called CSOS Connect in November 2022. The system was designed to make scheme registrations, annual returns, governance document submissions, and dispute tracking easier and more secure.
Although this was a major step for digital administration, industry feedback suggests the system has not yet delivered the reliability or efficiency that was hoped for.
Wasserman believes the deeper challenge is structural governance, not just technology. “Yes, the regulator is stronger than it was a decade ago, but governance-related disputes have not declined,” she says.
“Despite new laws, digital tools, and stricter enforcement, the same issues keep surfacing year after year.”
Calls for professionalised governance
For Wasserman, the answer is to strengthen community schemes' governance through professional standards and structured training for trustees and directors.
Drawing on her own experience as a former CSOS official, she argues that mandatory competency standards could make a real difference to governance outcomes across the sector.
“Community schemes are now too large, too valuable, and too complex to depend solely on volunteer governance,” she says.
“We need a structured, professional framework that supports trustees, instead of leaving them to navigate their statutory duties alone.”
She believes introducing a national competency standard would be a practical step forward. “Practical, accessible training should be mandatory when trustees are appointed,” Wasserman says.
“A baseline qualification will not solve everything, but it will immediately reduce avoidable disputes, strengthen financial management, and give residents confidence that their schemes are being run responsibly.”
Preventing disputes before they arise
While CSOS has committed to resolving disputes within 90 days, Wasserman believes the real goal should be to prevent disputes from happening in the first place.
“The CSOS 90-day pledge is an important benchmark for justice, but the regulator cannot carry the weight of the sector alone,” she explains.
She believes stronger governance at the scheme level will ultimately protect residents across the country.
“When trustees have the right tools, we do not just resolve disputes more quickly, we prevent them from arising in the first place.”
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