A potential problem that arises with the Homeowners Association | Legal Articles


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A potential problem that arises with the Homeowners Association

In a sectional title scheme, the question arises of what happens when there is no mention in the title deed or purchase agreement of the presence of a Homeowners Association. 

Home owners association

However, it was a condition of the local council to become a member of the Homeowners Association once the properties were purchased. 

Such a property is sold as a freehold property because there were no conditions in the title deed that a clearance certificate needs to be produced by the Homeowners Association and so it is not considered to be part of one. 

Homeowners Association difference per province

It is important to note the different legalities of the Homeowners Association as they are different depending on the province. 

In some provinces the legal personality and membership arises automatically as a result of section 29 of the Land Use Planning Ordinance of 1985. 

However, these should still be dealt with in greater detail by a constitution so as to ensure the clarity and precision of the matter. 

Condition of Title Deed

However, if no legislation exists that gives the Homeowners Association legal status, then this will need to be enforced through a condition of title that is inserted in the every deed of transfer. 

Levy clearance certificate & Levy collections

This will serve to establish a system that will allow for the collection of levies. It will also prevent any transfers from taking place without the necessary levy clearance by the Homeowners Association. 

It is worth noting however that the Town Planning and Townships Ordinance 15 of 1986 (Gauteng) and the Division of Land Ordinance 20 of 1986 (Gauteng), neither make reference to nor make any attempts at regulating the affairs of the Homeowners Association. 

Thus it is up to them to ensure that every person who purchases property within the development is bound by contract and has to become a member of the Homeowners Association, that said person also subscribes to the founding document, and that they abide by all of the decisions of the Association. 

This is usually accomplished when the sale agreement is being concluded between the person buying the property and the developer of sectional title scheme. 

This agreement has to confirm the purchasers agreement to become a member and abide by the Homeowners Association rules, its founding document and the decisions made by the trustees. 

The purchase cannot and will not be allowed to register the transfer of the stand until they have been issued a certificate that proves the purchaser has agreed to become a member and that the levies and other amounts due have all been paid, or otherwise secured. 

The purchasers agreement of the various conditions laid-out for him/her are then carried forward as the conditions of title in the title deed of the stand and thus bind the purchaser to those conditions. 

Van Deventers & Van Deventers Incorporated - Conveyancing attorneys Cape Town

Contact us for legal advice in regard to the above.

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