Being Part of a Homeowners' Association 101

South Africa's property sector consists of parties who enjoy certain rights under the country's constitution. Part of this healthy mix of industry participants are homeowners who have invested in different types of properties. The interests of these property owners are safeguarded by a legally constituted body called a Homeowners' Association (HOA).

Here's what you need to know about being part of a Homeowners' Association (HOA) when buying into a complex or estate in South Africa.

What constitutes a Homeowners' Association (HOA)?

Homeowners' Associations (HOA) are formed by property owners in full title or freehold housing establishments such as apartments, houses, parks, roads, common areas, etc.

What is the mandate of a HOA?

The key mandate of a Homeowners' Association is to enforce a set of rules, procedures and policies which are agreed upon through a Homeowners' Association constitution or commonly known as a Memorandum of Incorporation. The financial obligations of Homeowners' Associations which include security for the property, waste management, insurance premiums, common rates and taxes, administrative costs are catered for through the monthly levies paid by members. Leaders of Homeowners' Associations are called trustees or directors and they are elected during the Annual General Meeting attended by members of the association.

How is a Homeowners' Association formed?

It goes without saying that a Homeowners' Association (HOA) can't exist in a vacuum. HOAs are formed out of a need to properly manage property. The first step in the formation of an HOA is therefore the construction of property and possible subdivision into individually owned separate lots.

An HOA can be established as a non-profit company or as a common law association. A non-profit HOA operates under the Companies Act which stipulates how this body will operate and how Directors and Executives will be appointed. Common law associations have a flexible structure and are bound by their own rules rather than the Companies Act. Common law associations are led by trustees and not directors. When it comes to registration, a non-profit HOA is registered like a non-profit company while a common law HOA is formed when two or three members agree to the formation of the association. Members in HOAs are bound by the registration of title deed conditions.

Why should you consider being a part of a Homeowners' Association leadership?

Being a part of an HOA comes with some benefits. Some of the benefits earned by being an active member or leader of an HOA include:

Accountability

By being a member, you are provided with the privilege to learn business accountability principles. You will get a chance to know how collected levies are handled and spent. This association can also assist you with learning and improving your leadership skills and financial management capabilities with regards property management practices and the legalities involved in various situations.

Control

Maintenance and or upgrading the value of a property is a big deal in an HOA. By being a part of it, you get a chance to be involved in important maintenance decisions which ultimately affect the value of your property.

Rules

Rules around your property are formulated by the HOA. These rules pertain to pets, noise, events, access to social amenities, etc. By being part of a HOA, you will have a say when it comes to which rules should be formulated or changed at a particular time.

Community building and upliftment

An HOA is the best way to become a part of community building and upliftment efforts. Not only do you get a chance to meet community members and hear their complaints and requests, but you become a community builder through the solutions provided. All efforts and improvements made towards security, gardens, lighting, swimming pool are community upliftment steps. Added to all this, you enjoy the perks and privilege of accessing social amenities around your property without much difficulty.

Conclusion

Homeowners' Associations (HOA) are significant contributors to the wellbeing of communities. Knowing why and how they exist as highlighted above is the first step towards being a part of them.