Good news for complexes and estates in South Africa
A recent ruling from the Gauteng High Court has brought good news for sectional titles, estates and community schemes.
The court ruled that a litigant cannot accept the benefits of a settlement offer while rejecting the conditions attached to it, especially when those conditions relate to cost.
Johlene Wasserman, Director of Community Schemes and Compliance at VDM Incorporated, welcomed the court’s confirmation.
“The High Court’s November judgment is an excellent one that offers important clarity for community schemes,” she said.
“It’s a textbook example of why settlement mechanisms exist, and what happens when they are strategically misused.”
Court records have shown that the dispute began when a homeowner clashed with a Centurion HOA over her revised building plans.
When the HOA initially refused to approve her plans, the homeowner launched a High Court review. When the matter was taken to court, the HOA changed course.
“It approved the plans and delivered them to the homeowner under a formal Rule 34 settlement offer, marked ‘without prejudice’ and expressly excluding any contribution to her legal costs,” said Wasserman.
‘Without prejudice’ is a legal term that protects confidential settlement discussions. Thus, genuine attempts to resolve a dispute cannot be used as evidence against a party in court.
The homeowner accepted the benefit, using the approved plans to secure municipal approval and obtain her occupation certificate.
However, she continued litigating, arguing that the HOA’s approval was an independent administrative act and was not part of the settlement offer.
“The court rejected that argument outright. It held that the approval was clearly tendered as part of a conditional settlement, and the fact that the plans were stamped before delivery did not magically detach them from the terms of the offer.”
“In simple terms, you can’t take the performance and reject the terms. Settlement doesn’t work that way.”
The court criticised the homeowner for disclosing the without-prejudice offer in her affidavits.
“While the HOA had taken a misstep in its procedural response, the court stressed that settlement mechanisms only function when both sides respect the rules,” said Wasserman.
By the time the matter was heard, the dispute was essentially over, as the homeowner had already obtained the relief sought.
“The court dismissed the review as moot and made no order as to costs, noting that awarding costs in these circumstances would encourage opportunistic litigation and undermine the purpose of settlement procedures.”
Why this matters
Wasserman said that the message sends a clear message to anyone involved in HOA or property-related disputes: you can’t accept the benefits of a settlement and ignore its conditions.
“Even if one party tries to reframe the offer as something else, like an administrative concession, the court will look at the substance, not the spin.”
“And courts will not entertain litigation strategies aimed at squeezing out a costs order after the substantive relief has already been achieved.”
For HOAs, the judgment demonstrates that they can resolve disputes pragmatically without incurring penalties for doing so.
When it comes to homeowners, a warning is in order: the selective use of settlement offers will not be rewarded.
The ruling also reaffirmed that the High Court retains jurisdiction over HOA disputes, which echoes recent guidance from the Supreme Court of Appeal.
“This is welcome clarity in an area that has become increasingly muddled. The ruling champions fairness, procedural integrity, and responsible conduct in community‑scheme litigation.”
Wasserman said that the judgment is a significant moment for community‑scheme governance.
“It reinforces that settlement processes must be respected, that conditional offers cannot be selectively exploited.”
“HOAs are entitled to resolve disputes without fear of punitive cost orders. For homeowners, it is a reminder that litigation strategy cannot override legal principle.”
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