Homeowners Associations What You Need to Know
What is a homeowners association (HOA)?
It is a corporation (or body corporate (BC)) formed by a real estate developer for the purpose of marketing, managing and selling homes and/or lots in a residential subdivision. It might have limited or extensive governing rights of the estate in question. A (HOA) or (BC) lay down rules and regulations to be followed by residents.
When you buy a flat, townhouse or loose standing house in a planned development or complex, you have to join the homeowner’s association (HOA) and pay a monthly or annual fee/levy.
What does this levy contribute to and what is it used for?
Levies range from just under or above R1000 per month. One can reason that the more amenities a complex have, the higher the levies. In addition to the monthly fees there might be additional unforeseen costs for unplanned expenses like a new roof or a broken elevator.
As multiple parties live in the same building or complex they all have equal maintenance responsibilities for the common areas such as landscaping, elevators, swimming pools, clubhouses, parking garages, fitness rooms, sidewalks, security gates, roofing and building exteriors.
Other rules and regulations may include:
- The colour of exterior paint
- Type of front door and window frames
- Location of laundry lines
- Permission to have pets, the number of pets and the size of pets allowed.
- Height and type of fences
- Rules when using recreational facilities
- Type of vehicles allowed
- Speed limits
- Noise control
So, do you really want to buy a property where you have to live by someone else’s rules and regulations? Here is what you need to know before hand:
- Familiarise yourself with the rules and regulations. There is no getting out of it once you have signed the deal.
- Make sure the property you want to buy is in compliance with the rules and regulations.
- Get the cost of fees straight. How much would it cost you month to month? With how much and how often would a levy increase apply?
- What are the levies used for and how is it controlled? Can you have insights on the spending of the fees?
- Can you attend meetings to see what issues arise and how it is resolved?
- Does the body corporate over- or undermanage the premises and what is the reaction of current residence?
Author: Annemarie Swanepoel