With modern lifestyle in a post-Covid society top of mind with most property purchasers, the popularity of Security Estates and Community Living remain on the increase. Many such Estates and Communities are governed by a Homeowners’ Association (HOA) and this article discusses the role that HOA’s play in the world of property ownership.
HOA’s are created in full-title or freehold housing establishments (as opposed to Sectional Title) and are, in essence, responsible for the governance, architectural style and conduct rules applicable to a residential area and the community that exists within its boundaries. The basis of establishment of an HOA is either as:
- a non-profit company or;
- a common law association.
HOA’s are usually created when a development is established and a large parcel of land is subdivided, but can also be created by a group of property owners at a later date. Upon transfer of the individual properties from the developer to the purchaser, a condition will be registered in the title deed of each property in the scheme. These conditions bind property owners to the HOA as members and owners therefore become liable for the payment of levies which are applied to maintenance and security. Owners are also obliged to obey the rules of the association.
The rules created by the HOA should be made available to all prospective purchasers and tenants who intend moving to the area. These rules can include noise control and regulate parking on sidewalks, but can also include items that promote uniformity, such as what colour the exterior of a property may be painted and what landscaping is prescribed in publicly visible areas.
The Community Schemes Ombud Service Act (“the CSOSA”) came into operation in 2016, and requires all Homeowners’ Associations to be registered with it. It provides for fidelity insurance cover, sets out the duties of scheme executives (trustees or directors) and creates a dispute resolution mechanism that can be relied upon where internal measures have not succeeded.
Homeowners’ Associations can play an important role in the creation of harmony in communities when approached correctly. If you would like to learn more about the creation of a Homeowners’ Association or have questions regarding the one you are a member of, get in touch with one of our property attorneys to assist you.