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Education and risk in community schemes

The new regulations place a responsibility on trustees to educate themselves.

CSOS Regulation 14 states that, among other duties, it is a duty of a scheme executive (trustee) to:

(a) take reasonable steps to inform and educate himself or herself about the community scheme, its affairs and activities as well as the legislation and governance documentation in terms of which the community scheme operates;

(b) take reasonable steps to obtain sufficient information and advice about all matters to be decided by the scheme executives to enable him or her to make conscientious and informed decisions;

Community scheme insurance and financial planning are important areas of management and trusteeship that deserves special attention. Decisions need to be taken about insurance and risks covering community assets worth hundreds of millions of rands.

Trustees usually do not have the time to invest hours in becoming community scheme experts but should at least upskill themselves enough so they can confidently make informed decisions.

A professional managing agent will help trustees and provide very important para legal and routine advice. The expert financial advisor (insurance broker) is key to insurance-related decisions as well as some other financial decisions. The broker must provide written advice supported by sufficient information in addition with ongoing updates and information. Addsure’s advice process including letters of advice, comparative analysis and technology assists trustees and directors to make informed decisions.

What should trustees do to better equip themselves?

Attend as many workshops, training sessions and seminars on the related subjects as possible is a very good start. There are various associations such as NAMA (National Association of Managing Agents), COMSAC (Community Scheme Association), STAPE (Sectional Title Association of Port Elizabeth) and others which offer information sessions at a very low cost.

Education in community schemes is offered by firms such as Paddocks Learning, Tertius Maree and Associates, Dave James and others. CSOS also offers training.

Addsure offers managing agents, trustees and interested owners various training and coaching at various centres around South Africa. Subscribe to our Facebook page for notifications of events we host or where we are involved.

Managing agents also offer trustee education sessions. Examples such as Lumic Property Consultants in Gauteng, Annette Laing Property Consultants and Topnotch in Cape Town, Imber Property Management in Somerset West, Jack Allers Group in Port Elizabeth and SPA in Durban to name a few, go out of their way to empower trustees.

Trustees need reference books and we recommend books offered by Paddocks, Marina Constas, Tertius Maree and Shirley Baillee. Addsure is no exception here and The Sectional Title Insurance Guide is available in both hard and soft copy.

Read, read, read! There is a lot of information available online. It is easy to subscribe to various online publications and like certain social media pages to keep informed with the latest news, changes and trends.

We publish weekly blogs available directly from the Addsure website, subscription via email or by liking the Addsure Facebook page. Keeping abreast this way is quick, informative and does not involve keeping paper.

The CSOS Regulations have made it a duty of scheme executives to educate themselves. Better information and knowledge means better decisions and less mistakes. This goes a long way in improving community assets and reducing risks.


Author:  Mike Addison, Addsure

Contact Addsure – The Leaders in Sectional Title Insurance – for fit and proper advice from advisors who understand Sectional Title. Contact us in Johannesburg (011) 704-3858; Durban (031) 459-1795; Cape Town (021) 551-5069