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What to consider about Homeowner’s associations

With security a priority among South African property buyers, many consumers have opted to purchase homes within areas that are boomed off or within security and lifestyle estates.

According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, owning a home within an estate or boomed-off area will often mean that homeowners will be required to join a Homeowner’s Association (HOA). He notes that as a member of a HOA, a homeowner will be obligated to adhere to a number of regulations that pertain to the association.

Unlike a body corporate which manages a sectional title development, in a Homeowner’s Association each member owns the house and the erf or plot on which it has been built. A HOA is usually established by the residents of a community to ensure that the infrastructure such as the roads and communal areas are maintained. A large aspect of a HOA is also to ensure the safety of those who live within the community.

“Homeowner’s Association rules and regulations can cover a large spectrum of aspects ranging from the colour that a homeowner is allowed to paint their property to whether or not they are allowed to display a garden gnome collection in the front yard,” says Goslett. “It is for this reason that those who are looking to purchase a property within a community that is governed by a HOA should ensure that the regulations stipulated don’t conflict with their lifestyle.”

He adds that prior to purchasing a property within a HOA-run community; buyers should do their homework and investigate all aspects of the HOA regulations before making their final decision. Goslett provides a few aspects for buyers to consider about HOA’s:

Does belonging to the HOA incur any fees?

According to Goslett, members of a HOA may be required to pay a monthly premium or levy towards the association. He notes that buyers should compare how these monthly rates compare to other similar developments in the surrounding suburbs.

How are the fees allocated?

The members of the HOA should know how their monthly contributions are allocated. Often the fees paid towards an HOA are allocated to the maintenance of common areas and amenities such as the outdoor landscaping, swimming pool and the gym or clubhouse. Potential buyers should find out what is included in the fee and what is not.

Have there been any hikes in the rates recently?

When researching a HOA, buyers should get the history of how much and how often the rates have increased over the last ten year period. Goslett says that looking at the history will give buyers an idea of what to expect in the future. He notes that another important aspect to enquire about is whether any additional fees have been charged to homeowners when the HOA lacks the reserves to cover a big project.

What are the community’s priorities?

Looking at the minutes taken at the last few HOA Annual General Meetings will give potential homeowners a clear idea of the community’s priorities and what issues and topics keep appearing

Don’t overlook the fine print

It is important to read through all the regulations, restrictions and conditions before purchasing the property. While it may take some time to read the documentation in its entirety, it is far better to do that than move in and find out that you are unable to park a second car outside the property or store a caravan in the garden. Rather have a clear understanding of what is allowed than be caught by surprise. 

Penalties

It is essential for buyers to know what penalties will be enforced should any of the regulations not be adhered to “With any property purchase, it is always vital for a buyer to do their homework and ensure that they are entering into a purchase with a reasonable amount of knowledge about what they are getting themselves into. Reading through the documentation regarding the HOA will provide some meaningful insight when selecting a home to purchase within a particular estate,” Goslett concludes.


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