The Body Corporate (BC) of a sectional title property which is located inside a private estate, answers to the Home Owners’ Association (HOA).
Reason being that the HOA is the controlling body of a private estate. Among many responsibilities, it determines and maintains the code of conduct of residents. For this reason then, that the HOA not only makes the rules which residents live by in an estate, it also enforces it. As a result, a BC is subjected to management as it related to common areas of an estate, including golf courses, club houses and swimming pool areas.
Compliance of all matters financial and management are laid down in the constitutions of any of these management bodies. However, in the case of smaller complexes, the formation of an Owners Association (OA) serves the same purpose as that of a BC and HOA running side by side. An example is the Fairview Estate and Golf Club in Gordonsbay, where owners and tenants are complying with a newly established constitution that covers all aspects of estate management.
Depending on the size and number of units involved, the responsibility of a sectional title managing body which is most vital, is the collection and safekeeping of moneys for the purposes of upkeep, improvements and renewals.
Real estate agent, Marina Klopper of Anna Basson Properties in Stellenbosch, says it is important for sectional title owners within estates to realise their rights and responsibilities as determined by the HO. For instance, potential buyers should realise the cost implications resulting from payment of additional levies when buying properties inside security estates. The HOA of an estate achieves ongoing maintenance and specific renewal projects as determined by majority vote of the home owners, who hold full title deeds for freehold properties.
An example is ownership at De Zalze Lodges, which is a sectional title development at De Zalze Winelands Golf Estate, where the BC is subject to the hierarchy of the HOA. Money which is raised for projects undertaken by the HOA, are collected from sectional title owners by the BC, and then paid over to the HOA. Marina says the additional cost implications to end users is reason enough that property agents or private sellers pass on BC rules to second and third buyers.
However, a point often under estimated by sectional title property owners, is effective management of the costs associated with a BC, and even more so when answering to a HOA. Since poor management of a BC has led to the demise of many owners, it is imperative that members take the earliest action to avoid bankruptcy and long term debt.
BC also have the option of appointing an independent property management company, who will provide expert management skills and access to legal expertise. Chantel Landers of Rawson Property Management in Somerset West says sales agents should provide prospective buyers with all relevant BC and HOA information, prior to conveyancing attorneys finalising a deal.
Then there is fractional title ownership, where units holders of sectional title properties in estates, can have any number of owners. Such owners are affected both by the constitution, as well as levies raised by the management of a Body Corporate, Home Owners Association, or an Owners Association. Payments collected by an appointed individual or agent acting on behalf of the collective of fractional title owners, will include additional costs incurred for maintenance or upgrades.
Chantel says one of the most common and contentious problems which occur when a BC answers to a HOA, relates to pet ownership and common usage of shared spaces. She says agents and owners should inform sectional title buyers and tenants of specific rules, as set out in the customised constitutions of managing bodies.