Homeowners’ Associations as Urban Property Management Entities

The concept “homeowners’ association” falls within the description of fragmented property schemes. It is an entity that is the owner or manager of communal property and the land of an estate, consisting of individual properties owned by members of the association and communal areas used collectively by the individual owners. The individual properties and communal areas are managed in terms of conditions and rules, albeit with different purposes. A homeowners’ association is normally a juristic person incorporated as a non-profit company or by agreement between the individual owners as members to establish a common law juristic person. In terms of its management documents, it has the capacity to manage the estate and enforce the rules of the scheme. Therefore, the memorandum or constitution should contain specific management directions, which are discussed in this article. The rules of the scheme must be approved by the Ombud for Community Schemes before they may be enforced. The latter may also be approached to mediate disputes between members of the association or between members and the management. Initially the social-political need for urban fragmented property schemes is explained, followed by an analysis of the management of urban fragmented property. It is emphasised that ownership of immovable property is not only an individual right, but also fulfils an important community function. The legalities surrounding the establishment of a homeowners’ association is thereafter discussed. Essential matters to be included in the management documents are examined with specific reference to the enforceability and constitutionality of the rules of the association. Finally, the establishment of gated communities is reviewed with an emphasis on the constitutional viability of imposing limitations on the fundamental rights of owners, occupiers and third parties (like visitors and employees) who need access to the scheme or want to use communal areas in the scheme.