Buyers considering gated community or estate living are often confused as to what homeowner associations (HOAs) do, what rules they impose, what fees they charge and what rights owners have.
Simply stated, an HOA is an organisation in a planned housing community that makes and enforces rules about the appearance and maintenance of properties and which maintains common areas with money from membership fees, says Mike Greeff, chief executive of Greeff Christie’s International Real Estate.
“Potential buyers should pay attention to the rules and regulations of the HOA and decide if they are willing to abide by the rules. These associations are democratically created with the vision of maintaining the look and feel of an estate and usually have the best interests of the residents in mind.
“A prudent buyer would do research prior to buying. Look at the rates and levies of the area to give you an idea of the costs involved and read the association’s rules.”
Most HOAs expect members to pay a monthly fee or levy and Greeff advises prospective buyers to establish, in advance, what these fees are and what owners get for their money.
Does the fee include landscaping of vegetation in common areas, road surface and signage maintenance, or the upkeep of common amenities like the pool, gym or laundry facilities? Are extra fees payable if your guests want to use amenities like the pool or gym?
“As a homeowner, you are well within your rights to know what your membership fees are being spent on.”
An HOA also sets out the rules governing the property in the community and these rules can vary drastically across different associations. They can cover a range of topics including but not limited to:
- Security measures and access control.
- House and roof colours.
- Upkeep of your garden.
- Parking.
- Alterations to the property.
- Pets.
With rules, however, come consequences, Greeff says. The HOA will also set out the consequences of contravention, including possible fines that can be imposed on members.
In addition, HOA rules are not limited to when you are buying and occupying the property but also apply when selling.
“The Deeds Office may not register a transfer of property if there is no rates clearance certificate issued by the municipality confirming that all outstanding rates and taxes have been paid.
“The same principle is applicable to fees due to an HOA as they perform a similar role in terms of the smooth operating of the estate.”
In short, he says no normal sale transfer, inheritance or a forced sale due to insolvency or a court order, can take place without a HOA certificate stating that all outstanding levies have been paid in full.
With security at the top of most buyers’ lists, choosing a gated community or estate to live in is “a sensible choice”. But Greeff says prospective buyers need to be sure they are comfortable with the rules and fees of the HOA of the estate, before signing on the dotted line.