Check homeowner association rules before you buy

With security estates increasingly becoming sought after places in which to live, particularly where people are looking for the safe environment estates offer, it is important that buyers be aware of certain points before they decide on a particular estate, says Michael Bauer, managing director estate agency SAProperty.com.

“In many cases, buyers don’t read the conduct or management rules of the scheme before they sign an offer to purchase, and agents must ensure that their buyers don’t make this mistake. When you sign a purchase agreement, the usual process is to go through the financial documents of the scheme you are interested in, and all the rules. These may include the constitution, conduct rules, architectural design and landscaping guidelines. They should be attached to the same agreement, so that they can go through these as well,” says Bauer.

It’s important to check whether the rules could possibly have punitive conditions, such as penalty interest for building, which could impact negatively on your enjoyment of living there as well as general rights to comforts within the scheme.

Some of these rules relate to building codes and architectural guidelines but some also relate to services in the estate, fines that can be imposed for misconduct or breach of the rules or non-payment of levies. Some prohibit the ownership of pets, or place conditions on the type or size of pets allowed.

If you intend letting your unit, the HOA rules should also be given to tenants to read and sign before they move in, says Bauer.

“Owners and tenants are bound by the HOA rules, however onerous they might be, and there have been cases where the HOA’s processes included preventing owners or tenants from buying electricity and water vouchers for the prepaid meters until the breach was remedied. There have been instances where the rules also made provision for dealing with unpaid levies in the same way, in that no electricity or water top-ups could be bought unless the levies were up to date.

“The owners of properties in any estate are legally bound to the HOA rules as these are registered as a title deed restriction in favour of the HOA and tenants are obliged to follow the same rules as owners in the estate. While these are usually put in place to protect the interests of all the owners in the estate, they can become or be seen to be an infringement on the basic rights to an enjoyment of a property,” says Bauer.

“Before buying into an estate run by an HOA or body corporate, you must be sure you can abide by all the rules, as these are not likely to change and challenging them later can be a lengthy and expensive exercise.”

Call Michael Bauer on 021 427 1600 or email michael@saproperty.com.