The CSOS Practice Directives, Compliance, and Practical Strategies for Schemes
The CSOS has issued practice guidance intended to ease governance and improve compliance monitoring. At the same time, real-world capacity constraints persist, so Trustees and Directors need practical strategies that work “on the ground”. This article explains key points of the 2025 Practice Directives – special resolutions, virtual meetings, CSOS Connect, compliance notices and penalties – and offers pragmatic next steps for your scheme.
1) Special Resolutions and Quorum at Adjourned Meetings
- Earlier guidance required a 75% quorum to pass special resolutions; if not achieved (even at an adjourned meeting) no resolution could be taken.
- 2025 shift: special resolutions may be taken at an adjourned meeting with those present, if:
- The first meeting was properly convened with correct notice; and
- Minutes of the adjourned meeting and the proposed resolution were circulated.
- Caution: if the resolution has financial impact or materially affects ≥25% of owners, delay implementation for 7 days after passing.
- Open question: CSOS also retains powers to approve resolutions on application where quorum cannot be achieved – creating uncertainty about when an application is still necessary. Further clarification is awaited.
2) Governance in a Disaster Scenario (Digital Acceptance)
- Virtual or electronic meetings are acceptable.
- Digital signatures on resolutions are acceptable.
- Special procedures may apply during declared disasters (e.g., under the Disaster Management Act).
Practical impact: online participation and digital signing can reduce quorum failures and speed up decision-making.
3) CSOS Connect and Compliance Monitoring
- CSOS Connect is an online portal for scheme registration, Trustee/Director updates, levy payments to CSOS, rules lodgement, and status checks.
- Use your CSOS registration number to view your scheme’s compliance status.
- Compliance expectations include:
- Annual Financial Statements lodged.
- Trustee/Director details current.
- Conduct & Management Rules lodged and approved with a Section 10 certificate.
- Rules without CSOS approval are unenforceable.
- Fieldworkers are conducting site visits and issuing compliance notices.
4) Enforcement and Penalties (Two-Step Approach)
- Step 1: Engagement/education for schemes that are trying to comply.
- Step 2: Enforcement where contraventions are deliberate or persistent.
- Escalation options include verification letters, non-compliance notices, referrals to the NPA, and potential criminal liability (fines or imprisonment on repeat contraventions).
- Reality check: whether CSOS can consistently enforce to this level remains to be seen; trustees should assume more scrutiny and act accordingly.
5) Practical Strategies That Work
- Exhaust internal remedies first: Ensure your internal complaints/escalation process is documented and visible to owners.
- Keep rules enforceable: Conduct rules should be clearly drafted, passed by special resolution, and registered with CSOS (Section 10 certificate). Include proportionate penalties and a fair process for fines.
- Use adjourned meetings wisely: If quorum fails, reconvene properly and proceed at the adjourned meeting. Where there’s material impact, greater than 25% of owners, note the 7-day implementation delay.
- Go digital: Adopt virtual meeting procedures and e-signatures to reduce quorum failures and speed approval cycles.
- Tighten records access (POPIA-aware): Provide access to non-sensitive records on request; exclude debtor lists and personal data restricted by POPIA.
- Plan for enforcement gaps: For urgent or persistent breaches (especially nuisance/behavioural or structural/maintenance), be ready to brief attorneys for interdicts. Budget realistically (urgent High Court interdicts often start around R40,000+).
- Audit your CSOS Connect profile: Confirm your registration, rule certificates, Trustee/Director details, and AFS lodgements are current.
- Owner education: Publish a simple “CSOS 101” guide on your portal: what CSOS can do, how to lodge, and when to use the scheme’s internal process first.
The 2025 practice directives give schemes more flexibility on passing special resolutions and formalise digital governance, while CSOS Connect increases visibility of compliance. Yet practical enforcement still leans on the courts – particularly for behavioural or maintenance orders. Trustees and directors should pair CSOS processes with strong, CSOS-registered rules, POPIA-aware records access, and a clear escalation path to interdicts where necessary.