- The CSOS Act allows affected parties to challenge invalid body corporate meetings and resolutions.
- Section 39(4) sets out specific adjudication orders relating to meetings and resolutions.
- Proper procedure and reasonable decision-making remain essential to sectional title governance.
The foundation of any sectional title body corporate is its meetings. Whether it is a trustees’ meeting, an annual general meeting, or a special general meeting, decisions taken during such gatherings and the procedure they followed are subject to scrutiny.
If there is a flaw in the process or reasoning behind a body corporate resolution, that decision, together with the entire meeting that it occurred within, can be challenged at the Community Schemes Ombud Service.
The Community Schemes Ombud Service Act
The Community Schemes Ombud Service is a dispute resolution body governing sectional title schemes in South Africa, which allows an affected party, such as a unit owner, to lodge an application for dispute resolution in terms of the Community Schemes Ombud Service Act, 2011 (better known as the CSOS Act).
Once lodged, the dispute proceeds to be served on the responding party for a reply before being moved to conciliation and, lastly, adjudication, where an adjudicator rules on the matter and makes a binding order that is only appealable via the High Court.
Section 39 of the CSOS Act outlines the types of relief that an applicant to a case can request, which falls within the ambit and jurisdiction of the Community Schemes Ombud Service. In particular, Section 39(4) of the CSOS Act details the types of adjudication orders that can be sought in respect of body corporate meetings.
Orders under Section 39(4) of the CSOS Act
To start with, Section 39(4)(b) of the CSOS Act is an order that a meeting was not validly convened. This could be on the basis of the meeting notice not being duly served upon all parties or the fact that there was no notice of the meeting at all, in non-compliance with the Sectional Titles Schemes Management Regulations, 2016.
Thereafter, Section 39(4)(c) of the CSOS Act provides that a resolution passed at a meeting is either void or invalid. This could be for a number of reasons, including the unreasonable withholding of consent for an improvement in an Exclusive Use Area, ignorance of governing laws, a procedural defect (i.e. a disqualified person voting), etcetera.
Section 39(4)(e) then allows for an order declaring that a resolution passed at a meeting is void because it unreasonably interferes with the rights of an owner or occupier. This commonly applies to resolutions to adopt unreasonable conduct or management rules that are actually in violation of the Sectional Titles Schemes Management Regulations, 2016, or the Community Schemes Ombud Service’s Practice Directives.
Proper procedure and reasonable decisions are the key
Considering the above adjudication orders from the CSOS, it is therefore of utmost importance for body corporates to comply with the procedure set out in the Sectional Titles Schemes Management Regulations, 2016, for calling and running a body corporate meeting.
By the same token, body corporates must exercise an objective degree of reasonableness in their decisions, which must be compliant with existing case precedents and statutes. Otherwise, their decisions (and the meetings they arise from) will be declared void or invalid, creating turmoil in the governance of a sectional title scheme.
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