When you a buy property in a Home Owners Association (‘HOA’) it is essential not only that you read the rules and regulations of the HOA, but that you ensure that you fully understand them – or you may land up on the short end of the stick, er . . . water and electricity meter!!!
In a recent Orange Free State case, the court found that an HOA was well within its rights to restrict the sale of electricity and water vouchers to a tenant to top-up his pre-paid meters because the owner of the property had not paid fines for contravening the aesthetic rules of the scheme.
When the tenant found that he was restricted from buying water and electricity vouchers, he took the HOA to court and raised hell because as far as he was concerned his constitutional rights were being infringed.
BUT SURELY HE HAS A RIGHT TO BASIC SERVICES (I hear you asking!), THIS IS WHAT THE CONSTITUTION SAYS, NOT SO?
In fact the tenant asserted that the HOA’s refusal to sell him water and electricity was unlawful and infringed upon his constitutional rights to human dignity, equality, access to water and to the use of the property.
In most, if not all HOA’s, there is a condition of title contained in the Title Deed of the property that binds the owner of every erf to the HOA.
Every HOA has a Constitution (if it is a common law association) or a Memorandum of Incorporation (if it is registered as a Non Profit Company with the Companies Office).
This particular HOA’s Memorandum of Incorporation included the following Rule:
“no electricity shall be provided or sold to any occupier or owner of any erf in respect of which levy payments are outstanding for a period of 60 days or longer, until such time as all outstanding levy payments are paid in full”.
The Court found in this instance that the owner of the property that the Applicant in the court case was leasing, had incurred fines/penalties on his levy account as a result of contravening the aesthetical rules relating to air conditioners at the scheme.
The owner had failed to pay the fines and after 60 days they remained unpaid causing the provision above to come into effect.
Both the owner and the tenant had bound themselves to the Rules of the HOA and therefore the HOA was not acting unlawfully by restricting electricity and water to the tenant of the property.
This is yet another example of the maxim: “caveat subscriptor” – BEWARE OF WHAT YOU SIGN, especially when it comes to purchasing a property in a sectional title scheme or a Home Owners Association, because you may get a whole lot less (ownership rights) than you bargained for!
CONTACT JONTY at jleon@ibalaw.co.za OR KAREN at kbleijs@ibalaw.co.za
