HOA Governance in South Africa: What Homeowners Need to Know

A well-run homeowners association (HOA) needs more than a set of rules. Good governance provides a framework for how an estate is managed, how decisions are made, how money is administered and how homeowners and residents participate in their community.

For homeowners, understanding how an HOA operates can make it easier to understand their rights and responsibilities, participate in decisions, and resolve issues constructively.

What is an HOA?

A homeowners association is an organisation established to manage and administer a residential community and its shared interests. Depending on the structure of the development, an HOA may be responsible for matters such as common areas, estate facilities, security, maintenance, community standards and the enforcement of applicable rules.

An HOA is different from a sectional title body corporate. SARS describes a body corporate as being created under the Sectional Titles Act, while a homeowners association is generally formed through an agreement such as a constitution or memorandum of incorporation.

The specific powers and responsibilities of an HOA therefore depend on its governing documents and the legal structure of the development.

Why does HOA governance matter?

Governance determines how an estate makes and implements decisions.

Effective governance can help establish:

• Clear roles and responsibilities
• Transparent decision-making
• Proper financial administration
• Consistent application of estate rules
• Accountability to homeowners
• Appropriate processes for handling complaints and disputes
• Long-term planning for shared infrastructure and facilities

CSOS specifically identifies the promotion of good governance of community schemes as part of its mandate.

What documents govern an HOA?

The governing documents depend on the legal structure of the association. For homeowners associations, CSOS’s current practice documentation identifies the constitution as mandatory governance documentation and also refers to the levy schedule and other governance documents.

Homeowners should understand which documents apply to their particular estate and how they interact.

These may include:

• The HOA constitution
• Memorandum of incorporation, where applicable
• Estate rules
• Conduct rules
• Architectural guidelines
• Levy and financial policies
• Management agreements
• Resolutions adopted by the association
• Other applicable governance documents

The governing documents should be treated as an integrated framework rather than as isolated rules.

What are the responsibilities of an HOA?

The responsibilities of an HOA vary from estate to estate, but commonly include managing shared interests and facilities, administering finances, maintaining common areas and implementing the association’s governance framework.

An HOA may also appoint professional service providers such as managing agents, security companies, maintenance contractors and other specialists.

The association should have clear processes for appointing and overseeing these service providers.

What are homeowners’ responsibilities?

Homeowners also have responsibilities within an estate.

These may include:

• Paying contributions or levies when due
• Complying with applicable estate rules
• Following architectural or development requirements
• Respecting common areas and shared facilities
• Participating appropriately in association meetings
• Keeping contact and ownership information up to date
• Raising complaints through the appropriate channels

The exact obligations will depend on the governing documents applicable to the estate.

How should HOA decisions be made?

Good governance requires decisions to be made according to the association’s governing documents and applicable law.

This includes following the correct procedures for:

• Calling meetings
• Giving required notices
• Presenting motions
• Voting
• Recording resolutions
• Communicating decisions
• Maintaining appropriate records

CSOS guidance and legislation provide mechanisms for addressing disputes involving meetings, resolutions and scheme governance. The CSOS Act allows adjudication in certain circumstances involving governance provisions and association meetings.

Why transparency matters

Homeowners contribute financially to the operation of their communities, making transparency an important part of effective governance.

An HOA should have appropriate systems for communicating relevant information to homeowners, including information about budgets, levies, major expenditure, projects and important decisions.

Clear communication can also reduce misunderstandings between homeowners, the board and management.

What happens when there is a dispute?

Disagreements can arise over rules, levies, meetings, conduct, management decisions or the use of common facilities.

The first step should generally be to understand the estate’s own dispute or complaints process and attempt to resolve the issue through the appropriate internal channels.

Where a matter falls within its jurisdiction, the Community Schemes Ombud Service provides an alternative dispute resolution mechanism for community schemes. CSOS describes itself as the Ombud for community schemes and provides dispute resolution, governance-documentation oversight and education services.

The CSOS Act also provides for orders relating to certain scheme governance issues, meetings, resolutions and management services.

HOA governance is a shared responsibility

Good estate governance is not solely the responsibility of the HOA board or management team.

Boards and committees need to exercise their responsibilities properly, while homeowners need to understand the rules, meet their obligations and participate constructively in the governance of their community.

When roles, responsibilities and decision-making processes are clear, an estate is better positioned to manage its shared interests and respond to the challenges that come with community living.

Frequently asked questions

What is HOA governance?

HOA governance refers to the framework through which a homeowners association is managed and decisions are made. It includes the association’s governing documents, decision-making processes, financial administration, responsibilities and relationship with homeowners.

Is an HOA the same as a body corporate?

No. A body corporate is associated with a sectional title scheme, while an HOA is generally established through an agreement such as a constitution or memorandum of incorporation. The legal framework and governance arrangements can therefore differ.

Can an HOA have rules?

Yes. The rules applicable to an estate depend on its governing documents and legal structure. Homeowners should obtain and understand the rules applicable to their particular community.

What does CSOS do?

The Community Schemes Ombud Service provides dispute resolution for community schemes, regulates and monitors the quality of scheme governance documentation, and promotes good governance and awareness of rights and obligations.

Where can homeowners find their HOA’s rules?

Homeowners should request the current governance documents from their HOA, managing agent or other authorised representative. CSOS also maintains and provides access to certain community-scheme governance documentation.

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