There is currently no legislation that provides specifically for the management of home owners’ associations (HOAs). However, there is legislation that applies to how HOAs are established. The acronyms that will become familiar are SPLUMA and LUPA.
1. SPLUMA is the acronym for the Spatial Planning and Land Use Management Act, 16 of 2013, which was implemented in July 2015.
2. LUPA is the acronym for the Western Cape Land Use Planning Act, 3 of 2014, which was enacted in terms of SPLUMA and also came into effect in July 2015. LUPA enables municipalities in the Western Cape to implement their own land use planning bylaws.
The City of Cape Town was the first municipality in the Western Cape to implement a land use planning bylaw in terms of LUPA, and issued the City of Cape Town Municipal Planning By-Law, 2015 (CCT MPB), which became effective on 1 July 2015.
Previously in the Western Cape, the Land Use Planning Ordinance of 1985 (LUPO) made provision for local municipalities to approve new subdivisions of land, on condition that a home owners’ association be established to manage the subdivision. There is similar legislation in some other provinces.
What’s the same?
LUPO made bare bones provisions for home owners’ associations:
- The association had to be a corporate body.
- The constitution of the HOA had to have as its object the control and maintenance of the buildings and facilities in the HOA; it had to provide that the members of the association were the owners of the properties in the subdivision and that they together paid all the associations costs; and it had to be approved by the municipality, to ensure that it contained the object and membership requirements of LUPO.
- LUPO also allowed the municipality to address any failure of the association to meet its obligations and to recover the cost from the members.
A vitally important point, and one missed by many dealing with the establishment or management of HOAs, is that LUPO applied not only to HOAs established in terms of the common law, but to those established in terms of the Companies Act as well, irrespective of the references in LUPO to the association’s “…constitution…”.
What’s new?
CCT MPB makes the same conditions as LUPO for approval of the subdivision, but in more detail and makes some significant additions. Examples are, that the association comes into existence on the transfer of the first unit arising from the subdivision; that the developer must call a first general meeting of members within a specified period; that the members must elect trustees at that meeting; and that the developer must supply the municipality with a copy of the minutes of the meeting.
CCT MPB gives a list of provisions that must be in the HOA’s constitution and allows for two that may be included.
The required provisions are much as we commonly see in current, well drafted HOA constitutions, such as that the association must act in the collective best interests of its members; that it must manage the association’s communal facilities; that it must approve the transfer of properties in the HOA – effectively empowering the association to withhold a clearance certificate – and how it enforces the terms of the constitution.
Interesting new provisions that must be included in the constitution are that the association must enforce any conditions the municipality makes when approving the subdivision, and that it must provide for the transfer of land if the association ceases to function.
The two provisions that the constitution may provide for are building and landscaping guidelines, and the implementation of fines for members who do not comply with its terms.
It’s worth emphasising that, like LUPO, CCT MPB applies to all HOAs, those that are established as non-profit companies as well as those that are established as common law associations, even though the term used to refer to the governance documentation is “constitution”. The Memorandum of Incorporation (MOI) of a non-profit HOA company is, in effect, its constitution.
Your HOA’s governance documentation
The questions now being asked are, does CCT MPB apply only to HOAs established after 1 July 2015, and do existing HOAs in the Cape Town area have to alter their constitutions/MOIs and have them approved by the municipality?
CCT MPB applies to all HOAs, and has done since 1 July 2015, but our view is that there is no legal obligation for a pre-existing HOA to change its governance documentation to include provisions of CCT MPB that it currently lacks. However, it’s definitely a good idea to have a specialist look at it, firstly to check that it does not contain any provisions in conflict with the new legislation, and secondly to take advantage of new legislation, technologies and practices by including, for example, sending meeting notices by email, enabling electronic participation in meetings, and establishing and providing information to members via a dedicated website.
The Community Scheme Ombud Service (CSOS)
This article is written to clarify the position of HOAs in the Cape Town area with respect to the City’s planning by-law and its application to HOAs, but there is another reason to have a specialist look at your HOA’s governance documentation.
The Community Schemes Ombud Service Act 9 of 2011 (CSOSA) applies to all community schemes with respect to dispute resolution. That is not to say that community schemes, including HOAs, cannot include dispute resolution processes in their governance documentation, indeed the CSOSA requires that a dispute be referred to the scheme’s own dispute resolution process, and for that the process to have failed before it can be referred to the CSOS for adjudication. Therefore, the dispute resolution processes contained in the governance documentation of HOAs should be adjusted with the view to adjudication by the CSOS.
To return to the initial question, must HOAs change their governance documentation and have the changes approved by the City? No, but it’s a very good idea to do so!
Should you require specialist assistance in reviewing or amending your HOA’s governing documentation, contact us at consulting@paddocks.co.za or 021 686 3950.
Article reference: Paddocks Press: Volume 11, Issue 07, Page 02.
Anton Kelly is an extremely knowledgeable specialist Sectional Title and HOA teacher and consultant. Having been the lead teacher on all the Paddocks courses for the last 7 years, Anton lives and breathes Sectional Title and HOA law, all day every day. There are not many issues he hasn’t come across before.
This article is published under the Creative Commons Attribution license.
Recent Posts
Recent Comments
- Graham Paddock on Body Corporate Functions: Insurance
- Graham Paddock on Spending body corporate funds
- Graham Paddock on The Levy Clearance Certificate: The Body Corporate’s Cheap & Effective Weapon
- Graham Paddock on The benefits of online sectional title meetings
- Heinz Wiesner on The benefits of online sectional title meetings
Archives
- January 2025
- December 2024
- November 2024
- October 2024
- August 2024
- July 2024
- June 2024
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- March 2009
- February 2009
- February 2008
- February 2007
2 Comments.
Hi Anton
Hi Anton, some people believe that the by-laws of the City if Cape Town don’t apply inside a HOA anymore because the HOA now controls the access roads to the erven. Even law enforcement officers suddenly think they can’t come in? What is the correct reply to that? Many thanks
Hi Anton. In my gated community, we have many issues with our HOA not providing the services we are levied for each month.. This basically a breach of contract . What steps can we follow to remedy the situation? As we have complained on numerous occasions to the managing agents, and we do not see improvements.