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Cluster complexes: check if homeowners' association must approve sales

Oct 22 2019 19:14

If you’re buying a property in an estate or cluster complex run by a homeowners' association (HOA), you need to know that you might not be able to resell that property without the approval of the HOA, according to Gerhard Kotzé, MD of the RealNet estate agency group.

He says this is the effect of a condition to be found in the title deeds of many stands or homes within community housing schemes, even though these are usually “freehold” properties.

“What is more, such a condition is binding in law whether the buyer is really aware of it at the time of purchase or not,” says Kotzé.

In practical terms, he says, a clause in the title deed which states that an owner may not sell or transfer his property in an estate or cluster development without the consent of the HOA means that he has to inform the association of his plans to sell, and obtain the required consent, before he can put his home on the market or accept any offer to purchase.

“On the other hand, if he does conclude an agreement of sale with a buyer before obtaining consent, the sale must be clearly understood to be subject to the HOA’s consent. If this is not forthcoming, the sale could be void,” says Kotzé.

In most cases, the HOA’s consent will be quite easy to obtain, provided that the home owner and would-be seller is not arrears with his levy payments.

However, says Kotzé, delays can arise if an HOA withholds consent to “get even” with a seller for past differences – or perhaps just does not give consent timeously because it is badly organised and slow to deal with administrative matters.

“In addition, an HOA would be well within its rights to refuse an owner permission to sell if it had reason to believe that the proposed buyer would not be able to pay his levies or would be delinquent in doing so," he says.

property  |  money
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