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Homeowners in estates and other community housing schemes governed by Homeowners’ Associations (HOAs) should take a practical, document-first approach if they want a really clear understanding of their rights and obligations in those schemes.
That’s the word from Andrew Schaefer, MD of leading property management company Trafalgar, who says it is important for owners to identify what type of HOA they are part of, to be aware of all governance documents, and to establish which are legally binding.
“In our experience, queries and issues arising in schemes run by HOAs seldom have generic answers because there are so many factors in play, including the HOA’s legal form, its specific supporting documents, and the jurisdiction in which it operates. We also see many misunderstandings arising when owners don’t understand that HOAs are completely different from Sectional Title schemes, or when they believe certain HOA rules or guidelines don’t apply to them.
“This is why we strongly recommend that HOA residents take the time to read and understand all the documentation that applies to their specific scheme if they want to ensure that it functions optimally and that any problems can be swiftly and amicably resolved.”
In a recent Trafalgar webinar, HOA expert Zerlinda van der Merwe of TVDM Consultants explained, for example, that HOA governance in South Africa commonly falls into two broad types: the first being Common Law HOAs that typically have a constitution and the second being Non-Profit Company HOAs, which operate under company law and are governed by a Memorandum of Incorporation (MOI).
She also noted that while the constitutions of Common Law HOAs are often simpler than MOIs, their enforceability and amendment processes might be shaped by local planning requirements and, in some cases, municipal checklists or approval provisions. MOIs, on the other hand, might contain certain provisions that cannot be changed even with the unanimous agreement of all HOA members. MOI amendments also have to be properly adopted and then filed through the company compliance process, with supporting statutory schedules and signatures.
In any event, says Schaefer, owners should always treat the MOI or constitution as the starting point of any discussion, with any supporting documents such as architectural guidelines, access control procedures, shortterm letting procedures and landscaping rules only being referenced if they are specifically recognised in the MOI/ constitution. “Owners should also be aware that if they are not mentioned, they may actually not be enforceable at all.”
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Other important things to know, he says, include the following:
*Who can amend what? MOI/ constitution amendments generally require member consent (commonly by special resolution), but the quorum and voting calculations can differ significantly between HOAs. Supporting documents and rules may be able to be amended by the HOA board of directors/trustees only, but in such cases, the main document may stipulate that owners have to be advised of the changes before these will apply.
*What does “good standing” mean? Some HOAs link voting rights, meeting participation, and even certain services or access procedures to whether an owner is in “good standing” and this can be affected not only by non-payment of levies but by breaches of the estate rules. Owners need to understand the criteria upfront because they can materially affect governance participation.
*Membership is compulsory. Once a home or a stand (erf or land unit) is registered in an owner’s name (or the name of a legal entity like a trust), membership of the HOA is automatic and binding. It will typically only end on transfer of the property when it is sold, and owners cannot “resign” from an HOA just because they don’t like the rules or the way it is being run.
*How levies are structured. Levies are equal in most HOAs, but owners should not assume this is a given. They could vary by scheme design, erf size, use of shared facilities, and a formula contained in the governing documents, and new owners especially should confirm how they are calculated in their own HOA.
*What are the developer’s rights? The MOI / constitution may grant the developer veto rights or sole amendment powers for a defined “development period”. It may also restrict changes to certain clauses without developer consent, and it is important to establish how long these provisions are likely to remain in place.
*Dispute resolution pathways. Owners in HOA schemes should always exhaust internal remedies such as warnings, disciplinary processes, meetings and facilitation/ mediation before seeking external relief. Unlike ST schemes, most HOAs do allow for arbitration, although owners still have access to the Community Schemes Ombud Service (CSOS) as well as the Courts. However, once they have chosen a particular dispute resolution route, they have to stick to it. They cannot run the same dispute in parallel forums.
*The role of CSOS. As community housing schemes, HOAs do fall within the jurisdiction of CSOS and must pay CSOS levies, but CSOS does not have the power to approve or change HOA constitutions or MOIs. It also does not need to issue a certificate of approval before any changes to HOA rules can be applied, which is necessary when ST rules are changed.
Overall, says Schaefer, owners in HOA schemes should also make sure that they are familiar with other documents that reflect their ownership, such as the sale agreement and the title deed to their property, and read these in conjunction with their MOI or constitution, especially when it comes to membership and transfer provisions.
“It’s important to remember that good HOA governance is not just about enforcement; it’s about certainty, transparency, and communities that can make decisions confidently. And that depends on HOA owners being well-informed participants rather than “passengers” in processes that can have a significant bearing on the value of their assets and investments.”
