Consistency is key for Homeowners Associations
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 the communal living environments demonstrate consistency in the application of their rules and standards concerning their constituents. In this article, we look at the conduct of a Homeowners Association that failed to act consistently in the application of its rules.
When purchasing property in an estate one may be required to form part of the Homeowner’s Association (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. In the HOA’s architectural rules, it states that timber must be used for all garage doors. In the event that a home owner 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 had been several other properties with garage doors of a different material within the estate.
The Community Schemes Ombud Service was approached, which made an adjudication that no evidence had been presented to demonstrate that the HOA had unreasonably used their discretion and ordered the Trust to remove the garage door. The Trust however appealed the decision to the High Court in terms of 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 in a reasonable, proper, and fair manner. Section 50(c) of the Act was not carefully considered in the Adjudicator’s investigation as 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. By adhering to standardised procedures and criteria, fairness, transparency, and predictability are ensured - essential factors for maintaining trust and order within the communal community.
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Source: SeymoreDuToit & Basson
