Warning for complexes and estates in South Africa

Homeowners associations (HOAs) in South Africa need to apply their rules consistently and fairly, or else they could face unnecessary and costly legal proceedings that could have easily been avoided.

Legal experts at Wright Rose-Innes laid out a recent court case where an HOA was taken to task over ‘selective’ application of its rules.

With communal living being the preference for many, issues arising from these regulated environments are to be expected.

This demands that the regulatory bodies entrusted with running communal living environments demonstrate consistency in applying their rules and standards to their constituents.

When purchasing property in an estate one may be required to form part of the HOA whose key obligation is to apply and enforce regulations and procedures agreed upon in the HOA’s constitution (Memorandum of Incorporation).

The HOA may implement a range of rules to manage and maintain the quality, safety, and appearance of the estate, as well as impose sanctions and penalties for non-adherence to these rules.

These penalties and sanctions must, in turn, be imposed within the bounds of fairness, reasonableness, and legality and apply equally to all homeowners within the estate.

In the matter of Reddy and Another v Cedar Lakes Homeowners Association (A018904/2022) [2024] ZAGPJHC 468 (17 May 2024), a Trust was the owner of immovable property within the Cedar Lakes Estate situated in Fourways, Johannesburg.

As a homeowner, the Trust was obligated to comply with the HOA’s rules. The HOA’s architectural rules state that timber must be used for all garage doors. In the event that a homeowner wishes to utilise a different material or finish, approval must be sought from the Cedar Lakes HOA.

In this case, a new garage door was installed with a mirror exterior finish, approval for which the Trust had applied but which had been refused by the HOA.

The HOA refused the mirror finish despite the fact that there were several other properties with garage doors made of a different material within the estate.

The Community Schemes Ombud Service (CSOS) was approached. It adjudicated that no evidence had been presented to demonstrate that the HOA had unreasonably used its discretion and ordered the Trust to remove the garage door.

However, the Trust appealed the decision to the High Court under section 57 of the Community Schemes Ombud Service Act 9 of 2011.

In court, it was argued that given the photographic evidence provided to the Adjudicator of other properties with garage doors of a different finish, the Adjudicator’s order was flawed as the Adjudicator had not exercised his discretion reasonably, properly, and fairly.

Section 50(c) of the Act was not carefully considered in the Adjudicator’s investigation. The Adjudicator should have reviewed the evidence of inconsistent approvals by the HOA when assessing the reasonableness of the HOA’s decision.

If he had done so, it would have led him to find that the HOA acted inconsistently and unreasonably in ordering the garage door’s removal. The appeal was upheld by the High Court, and the decision of the Adjudicator to remove the garage door was set aside.

“This case provides a clear warning to the managing authorities of communal schemes to not only ensure they act in accordance with the applicable rules and regulations, but also that they act with consistency and fairness,” the legal experts said.

“By adhering to standardised procedures and criteria, fairness, transparency, and predictability are ensured – essential factors for maintaining trust and order within the communal community.”

Read: Tax warning for complexes and gated communities in South Africa