Trustees and managing agents of residential complexes and estates in South Africa are being cautioned to take immediate note of a new legal directive that carries serious legal consequences for non-compliance.

Johlene Wasserman, Director of Community Schemes and Compliance at VDM Law, confirmed that the Community Schemes Ombud Service (CSOS) has issued a Practice Directive that represents a substantial shift in how community schemes are regulated and enforced.

The directive, signed and published on 18 July 2025, sets out uniform standards for addressing a range of governance issues, including the treatment of pets, the imposition of fines, and the regulation of domestic workers.

“The CSOS Practice Directive supersedes all previous documents and now serves as a single reference source for trustees, managing agents, and other stakeholders,” said Wasserman.

A Single Authoritative Source For Scheme Governance

Wasserman, who has previously worked at both CSOS and the Property Practitioners Regulatory Authority (PPRA), emphasised that this directive replaces the patchwork of guidance previously available. From now on, trustees and managing agents will have one central framework to follow.

She warned that the consequences of ignoring these obligations have escalated well beyond administrative inconvenience. Under the directive, trustees and managing agents could face penalties of up to 10 years’ imprisonment or significant fines if they fail to comply.

Defining “Undesirable Rules” In Community Schemes

One of the most notable aspects of the new directive is the clear identification of “undesirable rules” — provisions that CSOS considers unconstitutional or discriminatory and which therefore have no legal standing.

Such rules, if included in a scheme’s governance documents, can be rejected during the CSOS quality assurance process or later struck down by a CSOS adjudicator.

Wasserman provided examples, noting that unacceptable rules include:

• Restrictions on domestic workers, such as prohibiting them from having visitors or speaking to each other in common areas
• Requiring domestic workers to wear name tags or carry passes
• Any rule that directly or indirectly infringes on constitutional rights

Stricter Limits On Fines

Excessive or arbitrary fines are another major focus of the directive. Trustees may no longer impose penalties without due process. Any fine-related rules must:

• Provide for written warnings before penalties are applied
• Include a clear internal dispute resolution process
• Set specific timeframes for each stage of enforcement

In addition, fines may not exceed the monthly levy applicable to the unit in question, and open-ended or summary penalties are expressly prohibited.

“Trustees do not have any power to decide on fines or take action against an owner or occupier on their own. They have to follow the CSOS rules,” Wasserman stressed.

Prohibited Sales And Letting Restrictions

Another recurring issue addressed by the directive is the practice of forcing owners to use a specific estate agency to rent or sell their units.

Such provisions are considered a violation of constitutional rights and cannot be upheld. CSOS has the power to order these rules to be removed, amended, reinstated to a prior lawful version, or replaced entirely.

Administrative Penalties For Non-Compliance

The directive also introduces administrative penalties for schemes that fail to meet basic regulatory requirements, including:

• Failing to register scheme rules with CSOS
• Operating without a POPI (Protection of Personal Information) manual
• Not appointing and registering an information officer with the Information Regulator

Wasserman further noted that scheme rules must also align with the Sectional Title Schemes Management (STSM) Act, reinforcing the need for trustees to ensure consistency across all governance documents.

How The Directive Could Apply In Practice

Two recent cases illustrate how the new framework might operate. In one instance, a rule banning cats but allowing dogs was challenged, highlighting the potential for discriminatory or inconsistent rules to be struck down.

By providing this level of clarity and enforcement authority, the directive leaves little room for trustees or managing agents to claim ignorance or rely on outdated practices.

Final Note

This directive represents a turning point in the governance of residential schemes in South Africa. For trustees, managing agents, and other stakeholders, the message is clear: review your rules, align them with the directive, and ensure compliance now — or risk serious legal consequences.

VDM Attorneys – Community Schemes Legal Compliance

The new CSOS Practice Directive demands precision, legal insight, and immediate action from trustees and managing agents. VDM Attorneys offers in-depth knowledge of community scheme law, coupled with practical experience in regulatory compliance, governance reviews, and dispute resolution. Our team can assist with reviewing your scheme’s rules, aligning them with the directive, and ensuring that every requirement is met before CSOS or other regulators intervene.

For sound legal guidance that protects both your scheme and its stakeholders, contact VDM Attorneys.