Comprising complexes, estates, retirement villages, and share blocks, South Africa's community schemes constitute a significant part of the country's urban housing landscape and have expanded into a sector of 70,000 schemes.
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The community schemes sector has expanded far beyond the governance model designed to support it.
This is troubling, as a decade's worth of Community Schemes Ombud Service (CSOS) reporting clearly paints this picture.
“Trustees and directors in community schemes are carrying enormous legal and financial responsibilities, and often without the training or support they need,” says Johlene Wasserman, director of Community Schemes and Compliance at law firm VDM Incorporated.
“CSOS data shows a sector that has outgrown the governance model it was built on, and with almost half of the country’s schemes not being registered with the Regulator, it becomes even more difficult to maintain consistent standards or intervene early when things go wrong.”
The demand for sectional title properties is said to dominate South Africa’s residential property market.
According to ooba Home Loans’ oobarometer Q4 2025, 66% of individual buy-to-let investors applying for home loans in 2025 chose sectional title properties, with demand steadily increasing across investor and owner-occupier segments over the past five years.
The CSOS regulate the conduct of parties within community schemes.
The types of dispute trends are reflecting the strain, Wasserman notes further.
“Most disputes aren’t about bad behaviour; they’re about uncertainty, inconsistent processes, and people trying to make complex decisions without the right tools.
"The sector has matured, but the governance framework hasn’t kept pace.”
South Africa’s community schemes, which include the complexes, estates, retirement villages and share blocks that comprise a large portion of the country’s urban housing landscape, have grown into a 70,000‑strong sector, Wasserman says.
The director adds that yet fewer than 40,000 schemes are formally registered with the Ombud- that’s almost half the sector. This registration gap has appeared continuously in CSOS’s annual reports since 2017, and it remains unresolved.”
In the 2024/2025 Annual Report of the CSOS, Busisiwe Nzo, chairperson of the Board of the CSOS, said the entire CSOS value chain and service delivery model is underpinned by the success of establishing and maintaining a complete database of community schemes in the country.
She said the database is critical not only for the collection of levies but also for the provision of education and training, and assuring good governance of schemes.
“In the 2024/25 financial year, 2 448 community schemes were registered with the CSOS, which resulted in the total universe of registered community schemes increasing to 37 613 community schemes by 31 March 2025.”
The entity said it monitored and made a more concerted effort to increase the percentage of compliant registered community schemes.
As a result, it says 72% of registered community schemes, which were required to submit scheme governance documents and annual returns / annual financial statements within 30 days after registering, are deemed as compliant for the 2024/25 financial year.
This translates into a 3% improvement from the previous year’s performance.
According to the report, CSOS levies are the major source of revenue for the CSOS, constituting the largest portion of the total revenue generated from non-exchange receivables.
It said the CSOS continued to reach out to some known managing agents to obtain lists of community schemes that they manage, and receive proof of payments and levy calculators. In the 2024/25 financial year, R470 303 770 CSOS levy was billed against an annual target of R429 133 637.
Over the past five years, she continues, CSOS has received more than 30,000 disputes, with annual volumes reaching over 16,000 cases in 2024/25. While the regulator resolves around 80% of matters, which is impressive, the nature of disputes has remained consistent, including:
Deeply concerning for Wasserman is that CSOS reports repeatedly highlight the same pressure point: “Community schemes rely hugely on volunteer trustees and directors to run what are, in effect, multimillion‑rand residential businesses without any requirement for formal training, qualifications and accreditation.
"The result is uneven rule enforcement, inconsistent financial management, and governance decisions made without adequate preparation.”
The sector’s financial footprint is growing rapidly, too, she says, with the income from CSOS levies now exceeding R400 million a year, and levy compliance among registered schemes sitting at between 70 and 80 percent.
“Non‑compliance is a major problem, especially among unregistered schemes, and it’s a risk that’s increasing as the sector expands. CSOS knows this-it acknowledges that its funding model is vulnerable to governance failures at the scheme level,” the law firm says
The CSOS is said to have invested heavily in digitisation, including the rollout of CSOS Connect in November 2022.
The programme was introduced to provide a secure online platform for scheme registrations, governance document submissions, annual returns, payments, and the electronic lodging and tracking of disputes.
However, says Wasserman, industry feedback indicates that it has not yet delivered the reliability or efficiency originally intended.
“Yes, the regulator is stronger than it was a decade ago, but governance‑related disputes have not declined. Despite new laws, digital tools and increased enforcement, the same issues surface year after year. And the sector can no longer rely on incremental fixes.”
“We’ve reached a point where the system needs more than patchwork solutions,” she adds. “Community schemes have become too large, too valuable and too complex to depend solely on volunteer governance.
"We need a structured, professionalised framework that supports trustees instead of leaving them to navigate statutory duties alone.”
The CSOS’s 90-day pledge to resolve disputes is a vital benchmark for justice, she agrees, but the regulator cannot carry the weight of the sector alone.
“To truly protect the hundreds of thousands of residents who depend on this service, we must professionalise scheme governance at the source. When trustees are empowered with the right tools, we don't just resolve disputes faster, we prevent them from arising in the first place,” Wasserman says.
Drawing on her experience as a former CSOS official, Wasserman believes the answer lies in establishing a national competency standard for trustees and directors.
“Practical, accessible training must be mandatory at the point of appointment. A baseline qualification won’t solve everything, of course, but it will immediately reduce avoidable disputes, strengthen financial management and give residents confidence that their schemes are being run responsibly.
"This is a practical, achievable reform that will protect South Africa’s schemes, trustees, and homeowners,” she says.
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