Homeowners’ associations as urban property management entities

• Author: Pienaar, G.J.
• DOI: https://doi.org/10.47348/SLR/2022/i3a5
• Published date: 27 October 2022
• Date: 27 October 2022
• Citation: (2022) 33 Stell LR 438
• Pages: 438-459

438

https://doi.org /10.47348/ SLR/2 022/i3 a5

HOMEOWNERS’ ASSOCIATIONS AS URBAN

PROPERTY MANAGEMENT ENTITIES

GJ Pienaar

B Jur et Com LLB LLD

Professor, Northwest University

JG Horn

B Proc LLB LLM MA(HES) LLD

Senior lecturer, University of the Free State

Abstract

The concept “homeowners’ association” falls within the description of

fragmented property schemes. It is an entity that is the owner or manager of

communal property and the land of an estate, consisting of individual properties

owned by members of the association and communal areas used collectively

by the individual owners. The individual properties and communal areas are

managed in terms of conditions and rules, albeit with different purposes.

A homeowners’ association is normally a juristic person incorporated

as a non-prot company or by agreement between the individual owners as

members to establish a common law juristic person. In terms of its management

documents, it has the capacity to manage the estate and enforce the rules of the

scheme. Therefore, the memorandum or constitution should contain specic

management directions, which are discussed in this article. The rules of the

scheme must be approved by the Ombud for Community Schemes before they

may be enforced. The latter may also be approached to mediate disputes

between members of the association or between members and the management.

Initially the social-political need for urban fragmented property schemes

is explained, followed by an analysis of the management of urban fragmented

property. It is emphasised that ownership of immovable property is not

only an individual right, but also fulls an important community function.

The legalities surrounding the establishment of a homeowners’ association

is thereafter discussed. Essential matters to be included in the management

documents are examined with specic reference to the enforceability and

constitutionality of the rules of the association. Finally, the establishment of

gated communities is reviewed with an emphasis on the constitutional viability

of imposing limitations on the fundamental rights of owners, occupiers and

third parties (like visitors and employees) who need access to the scheme or

want to use communal areas in the scheme.

Keywords: Fragmented property; gated communities; homeowners’

associations; management documents; rules

(2022) 33 Stell LR 438

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https://doi.org /10.47348/ SLR/2 022/i3 a5

1 Introduction

The concept “homeowners’ association” has evolved naturally from the

proliferation of urban fragmented property schemes. This concept forms an

important part of fragmented property holding in South Africa and is the

latest development in the domain of urban fragmented property management.

However, the purpose of this article is not to provide a complete dissection

of this legal phenomenon, but to place fragmented property rights and

management in perspective and to focus on the main characteristics of a

homeowners’ association.

A homeowners’ association can be described as a legal body which

owns or manages communal land, infrastructure and facilities1 for the

benet of members of the association who own individual properties by

way of conventional title deeds.2 The relationship between members of a

homeowners’ association is contractual in nature, based on an agreement in

terms of which a homeowner is subjected to the decision-making of the elected

trustees or directors of the association regarding the communal areas and other

community interests. A broad competence is conferred on the trustees or

directors regarding matters involving the relationship between members inter

se and their relationships involving the scheme.3

At rst glance the management structure may seem similar to the

relationship between the owner of a unit in a sectional title scheme and the

body corporate, but there are fundamental differences. This will become clearer

in the subsequent discussion of the nature and functioning of a homeowners’

association. Firstly, the legal nature of the homeowners’ association will be

discussed by investigating how such an association is established. Although

no designated legislation currently regulates homeowners’ associations in

South Africa, some ancillary legislative provisions applicable to homeowners’

associations will be highlighted. The governing documents of homeowners’

associations will be analysed and nally the rights and duties of members of a

homeowners’ association will be claried.

1 CM Durham “Govern ance documentation in ho meowners’ associations” (29- 04-2015) 10(4) Paddocks

Press Newsletter 5 co za/paddocks-press-newsletter/governance-documentation-

in-homeowners-associat ions/#:~:text=Where%20a%20HOA%20is%20incorporated,is%20the%20

memorandu m%20of%20in corporatio n> (accessed 11-08-2022) Such com munal inf rastruc ture often

includes boun dary walls, fenc es, roads and gard ens, as well as recre ational facilitie s such as clubhouses,

tennis cou rts and swim ming pools

2 However, some homeowners’ asso ciations may include sectio nal title complexes as well The sectio nal

title bodies co rporate tha t form part of homeow ners’ associat ions are admin istered and ma naged in term s

of the Sectional Tit le Schemes Management Ac t 8 of 2011 This can only be do ne within the fra mework

of the relevant gover nance docume ntation of the mas ter homeowner s’ association See fur ther Z van

der Merwe “Doe s sectional tit le legislation apply t o home owners’ asso ciations?” (30-0 5-2018) 13(5)

Paddocks Pre ss Newslette r co za/paddocks-press-newsletter/does-sectional-

title-legislation-apply-to-home-owners-associations/#:~:text=No%2C%20the%20provisions%20of%20

the,in%20terms%20of %20the%20STSMA> (accessed 11-08-2022)

3 Khyber Rock Es tate East Hom e Owners As sociation v 09 of Erf 823 Woodmead Ext 13 CC (7689/2006)

2007 ZAGPHC 137 (14 August 2007) SAFLII pa ra 23

html> (accesse d 11-08-2022)

HOMEOWNERS’ ASSOCIATIONS AS URBAN

PROPERTY MANAGEMENT ENTITIES 439

© Juta and Company (Pty) Ltd