Over 30,000 South African complexes and estates face a major risk

With over 30,000 complexes and estates unregistered with the Community Schemes Ombud Service (CSOS), South Africa faces a growing governance gap as disputes rise and volunteer trustees shoulder multimillion-rand responsibilities without mandatory training.

VDM Incorporated’s Director of Community Schemes and Compliance, Johlene Wasserman, warned that South Africa’s fastest‑growing housing model is outpacing its governance framework.

Ten years of CSOS reporting paints a clear – and troubling – picture of a sector that has expanded far beyond the governance model designed to support it.

“Trustees and directors in community schemes are carrying enormous legal and financial responsibilities, and often without the training or support they need,” Wasserman said.

She explained that data from the CSOS shows a sector that has outgrown the governance model on which it was built.

“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,” she said.

The types of dispute trends are reflecting the strain. “Most disputes aren’t about bad behaviour – they’re about uncertainty, inconsistent processes, and people trying to make complex decisions without the right tools,” she said.

The sector has matured over the years, but the governance framework has not kept pace, Wasserman explained.

The country’s community schemes – 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.

“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,” she said.

Over the past five years, Wasserman said the 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 –

• Governance disagreements
• Levy and budget disputes
• Rule enforcement
• Access to records
• Concerns about maladministration

According to Wasserman, what is deeply concerning 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,” she said,

“The result is uneven rule enforcement, inconsistent financial management, and governance decisions made without adequate preparation.”

Major risks

The sector’s financial footprint is growing rapidly, too, Wasserman said. The income from CSOS levies now exceeds R400 million a year, and levy compliance among registered schemes sits between 70% and 80%.

“Non‑compliance is a major problem, especially among unregistered schemes, and it’s a risk that’s increasing as the sector expands. The CSOS knows this – it acknowledges that its funding model is vulnerable to governance failures at scheme level,” she said.

The CSOS has 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, Wasserman said 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,” she said.

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.”

Wasserman added that South Africa has reached a point where the system needs more than patchwork solutions.

“Community schemes have become too large, too valuable and too complex to depend solely on volunteer governance,” she said.

“We need a structured, professionalised framework that supports trustees instead of leaving them to navigate statutory duties alone.”

While the CSOS’s 90-day pledge to resolve disputes is a vital benchmark for justice, she said 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,” she said.

“When trustees are empowered with the right tools, we don’t just resolve disputes faster, we prevent them from arising in the first place.”

Drawing on her experience as a former CSOS official, Wasserman explained that the answer lies in establishing a national competency standard for trustees and directors.

She specifically highlighted that 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,” she said.

“This is a practical, achievable reform that will protect South Africa’s schemes, trustees, and homeowners,” Wasserman added.