At present there are approximately 530 000 homes managed by approximately 3000 homeowners’ associations in South Africa, compared to 780 000 sectional title units managed by 56 000 bodies corporate.
There is no single statute that regulates homeowners’ associations and, unlike the position regarding sectional title schemes, no specific legislation prescribing governance provisions that automatically applies to these homeowners’ associations.
Homeowners’ associations are usually created by virtue of municipal ordinances relating to the approval of subdivisions, on the one hand, and the relevant provisions of the Companies Act, on the other, and are therefore unique. They are required to fulfil diverse requirements, ranging from overseeing certain functions that were previously the responsibility of local authorities, to balancing the rights of persons living in close proximity to each other, to complying with company law formalities that govern the running of a non-profit entity.
Importance of case law
Because there is no single statute that regulates the management of homeowners’ associations, the common law as continually developed by our courts plays an import role in the day-to-day running of such associations. This manual covers various legal aspects relating to homeowners’ associations, with specific reference to issues that have served before our courts in recent years.
The well-researched and comprehensive set of notes can be used in practice. The notes contain numerous case studies based on South African court cases which are usually the result of badly worded clauses in agreements of sale that give rise to uncertainty and ambiguity and thereby leave the door open to costly litigation.