Prior to the establishment of CSOS, the regulatory framework for community schemes was largely fragmented.

There was no regulatory body to deal with complaints and disputes; for a number of years Government received a myriad of complaints from owners of properties located in community schemes, regarding their disgruntlement on some of the issues affecting them. For some time, the Department of Rural Development and Land Reform (DRDLR) entertained some of the complaints, including articulating policies intended to have such complaints resolved. That mechanism had its rewards but was over-shadowed by a regulatory vacuum and limited attention placed on such matters. The only legal recourse available to consumers, to address their complaints, was through the courts which is costly and time consuming.

In 2003 the National Department of Human Settlements (NDHS) and the DRDLR started engaging with a particular focus on developing a dispute resolution mechanism focusing on community schemes. It was natural that the NDHS, as a department having human settlements mandates, would have to develop relevant legislation and establish a dedicated state owned entity to plan and implement an effective dispute resolution mechanism.

The first Board was appointed on the 1st of January 2013.

In 2009/2010 the NDHS developed a detailed business case document which paved the way for the development of the CSOS Bill, which became an act on the 11th of June 2011. Promulgation of the Community Schemes Ombud Service Act meant that the NDHS had the necessary mandate to establish CSOS as a state owned entity.