A homeowners’ association (HOA) is a legal body in which the individual properties are exclusively owned, while the communal infrastructure and facilities are owned by the association. This communal property can include boundary walls, security entrances, club houses and can also include the roads and bulk infrastructure services for water and electricity supply.
Each owner must be a member of the HOA so that they are bound by the governance documentation to ensure that they are legally liable to make contributions towards the HOA communal costs and abide by the other rules applicable to the estate.
There are two types of legal structure that are used to create or establish an HOA:
- A non-profIt company.
- A common law association.
Where a HOA is incorporated as a common law association, its primary governance documentation is a written constitution. The common law also has detailed rules that apply to such associations.
Where a HOA is incorporated as a non-profit company, its primary governance documentation is the memorandum of incorporation. The Companies Act 71 of 2008 regulates non-profit companies, and the content of the MOI cannot contradict any provision in the Companies Act.
The purpose of these fundamental governance documentation is to detail the purpose and regulate the rights and responsibilities of the HOA including the executives and the members.
In both forms the governance documentation applicable are considered to be a contract that binds every member of the HOA. The members are also bound to the provisions in these documents because the title deed conditions imposed in regard to the individual properties in the 
estate must set out that any registered owner of such a property is a member of the HOA and obliged to comply with its governance documents, and that no registration of any transfer can take place until the HOA has issued a clearance certificate confirming that all amounts due to the HOA by the person transferring the property have been paid. The constitution and MOI will also require that any sale agreement must include a reference to these obligations.
It often occurs in practice that these documents make provision for the executives to make regulations, rules and architectural guidelines that are binding on the members. The terms of the abovementioned documents cannot contravene or contradict any term in the constitution or MOI. The rules and regulations should be reasonably necessary, apply equally to all members and be within the scope of the executive’s rule-making authority as set out in the primary governance documentation. The constitution or MOI can also refer to other documents such as agreements with the local municipality or other service providers, and can incorporate such external documents by specific reference.
There is no legislation that specifically governs the operation of HOAs, as there is for sectional title schemes. It is these governance documents that have to be followed in managing HOAs. Get to know yours!
Article reference: Paddocks Press: Volume 10, Issue 4, Page 5.
Image reference: theraleighmortgageguy.com
Carryn Melissa Durham is a Specialist Sectional Title Lawyer (B.A LL.B, an LL.M), currently completing her Doctorate in sectional titles. Carryn heads up the Paddocks Private Consulting Division. For more information please contact Nicole on 021 686 3950 or consulting@paddocks.co.za.
This article is published under the Creative Commons Attribution license.
26 Comments.
Are there specific provisions in the law that governs the control that a developer has over the HOA?
I have contested a rule at our HOA AGM, that the comiittee must determine the price of one’s property when one intends to sell the property. An answer from Tertius Maree to this effect (that it cannot be a rule) was rejected and majority voted for the rule. I feel that they have no right to determine the selling price of my property.
I am still not convinced that the AGM (members) can vote to have this rule be enforced. The comittee is run by a group of retired people who , I believe, do not have the know-how of the law.
Please can you respond to this?
Thanks
The Companies Act 71 of 2008 regulates non-profit companies, and the content of the MOI cannot contradict any provision in the Companies Act. With reference to this I would like if possible your comment. Our HOA MOI states clearly that that there must be a Chair and vice chair, but this is not being adhered to, My understanding is that this is not compliant, Could you advise where I can find information to support my understanding in this regard. Many thanks,
A very interesting article. I would like to find out if I could hire your services please as I have purchased a new property but was never give the rules and regulations of the homeowners association.
Good day,
We are a small estate within the Madibeng Municipality and I’m a Director on the HOA. Recently one of the members put a borehole on his erf. According to the Water and Sanitation By-law (1/2016) of Madibeng, all borehole have to be applied for. At this stage the owner did not apply. What is the HOA’s legal responsibility to the situation. Do we pass on the legislation and inform him that he needs to adhere, do we report it to the Municipality?
Thank you
Hi
What is the difference between body corporate and home owner association?
Under the sectional title scheme, are they the same ?
Please explain
Thanks
Simon
Hi Simon,
The difference between sectional title schemes and home owners associations are dealt with in our FAQs.
You can also find more information in the following article:
Home owners’ associations are not the same as sectional title schemes
Kind regards
Paddocks
Dear Dr Carryn, can you guide on the number of proxies a single owner can hold for an AGM. We just had an AGM and I live in a HOA and I owner had like almost 7 proxies. I was of the view that owners are only allowed 1 proxy.
Hi there,
Thank you for your comment. We would love to help but unfortunately do not give free advice. Here’s how we can help:
– We offer a Free Basics of Home Owners Association 1-week short course. You’ll be able to ask your course instructor any related questions. Find out more here.
– We offer consulting via telephone for R490 for 10 minutes. Please call us on +27 21 686 3950.
– We have Paddocks Club, an exclusive online club, to help you get answers to your questions about community schemes. Find out more here.
Kind regards
Paddocks
I live in a new development with only 8 full title houses. The communal area is a paved road between the houses. The only cost for the communal area is potential maintenance on the outside wall and the security gate. A local lawyer told me that we do not need to register a HOA because of the number of units in the complex. We as home owners also don’t see the need for this but do have a committee and levies that we manage ourselves. What is our rights? Can we decline the official formation and registration of a HOA and keep on doing it internally?
Hi Corrie,
Thank you for your comment. We would love to help but unfortunately do not give free advice.
Please email consulting@paddocks.co.za with a bit more detail on the situation at hand and our attorneys will provide a no-obligation quote for assistance with this matter.
Kind regards
Paddocks
Hi We purchased a property. then after a few months got an email from a property management company stating that they were not informed of the sale as there is a HOA. We were not aware of this as it was not disclosed in the offer to purchase.
When the lawyer that did the transfer he sent them the deed from deeds office. stating that an HOA is not registered at the deeds office. then the property company went quite. a year went by with no reply.
A new company then took over and is now threatening to handover to debt collectors, they just say they have legal opnion and a HOA constitution and they demand we pay up the levies.
I am at wits end with this matter. do they have any legal grounds as we were not aware of any HOA and didnt sign any agreement to be part of this HOA at the time of the OTP.
Hi Julio,
Thanks so much for getting in touch with us. Could you kindly send an email to consulting@paddocks.co.za with the name of the HOA scheme and a brief, but thorough, description of the issue?
They will then revert with a quote for their legal assistance.
Thanks so much!
Kind regards
Paddocks
does the rule about luxurious improvements apply to the Common Property in Home Owners Associations or only to Sectional Title Common Properties?
Hi Maggie,
Thank you for your comment. We would love to help, however we do not give free advice. Here’s how we can help:
– We offer a 1-week Free Basics of Sectional Title short course.
– We offer consulting via telephone for R490 for 10 minutes. Please call us on 021 686 3950.
– We have Paddocks Club, an exclusive online club, to help you get answers to your questions about community schemes.
Kind regards,
Paddocks
Is home owners association allowed to increase leavy without calling AGM or SGM?
Hi Mike,
Thank you for your comment. We would love to help, however we do not give free advice. Here’s how we can help:
– We offer consulting via telephone for R490 for 10 minutes. Please call us on 021 686 3950.
– We have Paddocks Club, an exclusive online club, to help you get answers to your questions about community schemes.
Kind regards,
Paddocks
If an estate is still in the development stage (ie no formal handover has been done and the developer still owns erven within the estate that are either vacant or under construction and entrance etc is still under construction), who is responsible to maintain the electric fence, gate motors etc? The HOA or the developer?
Hi, I would like to know at what point is a constitution changed, as I am been led to believe that from the moment the members agree at an AGM. This is for a building deposit to no longer be refunded? To the best of my knowledge these changes need to go to OMBUD for approval?
Hi, we are living in a nature estate East of Pretoria. With the lockdown, the HOA forbid us to walk in the reserve. Are they allowed to do so?
Good day to you, Can the HOA trustees charge a member for damage to common property even if the costs are not defined within the MOA or complex rules ?
Hi Christiaan,
Thank you for your comment.
This is something our attorneys would be able to assist with. Please email us on consulting@paddocks.co.za with regards to your matter, and we can provide you with a no-obligation quote, so that we can assist you.
Kind regards,
Paddocks
If a builder is not adhering to the Building Guidelines can the HOA stop him from building until he adheres to the Guidelines.
Hi Gavin,
Thank you for your comment. This is something that our legal team would need to advise on. Please send your query to consulting@paddocks.co.za, and the team will provide a quotation for their assistance with your matter.
Kind regards
Paddocks
We purchased our property in 2007 and a Consent to transfer was issued by the HOA. The property also had a Municipal occupation certificate. Now that we are selling the property, the HOA will not give consent to transfer as the plans do not correspond with the building. Everything is still as we purchased the property. We did not make any alterations to the building and were not even aware that the plans do not correspond. Can they withhold Consent and insist that we rectify all the discrepancies 13 years later, which includes new verandahs, guard rails, court yard to be built, water tank to be installed? Alternatively, they ask for “as built” plans, but I don’t know if they will actually approve same. Transfer is ready to be lodged and this is holding everything up. Many thanks.
Hi Petro,
Thank you for your comment. We have sent you an email.
Kind regards
Paddocks