24 March 2022
4 April 2022
With the number of gated villages and other kinds of home owners’ associations increasing daily in South Africa, managing these schemes is a good career development strategy for existing and prospective property managers.
This 10-week part-time course presented online covers the law relating to home owners’ associations established as non-profit companies as well as those established as common law associations. The course material delves into all areas of HOA management, from the design and formation of an HOA, its governance documentation, members, meetings and decision-making, right through to termination.
This course was developed by Graham Paddock, and is presented by Ané de Klerk of The Advisory. It is the only specialised course in home owners’ association management offered in South Africa.
MODULE 1: BASIC PRINCIPLES OF HOAS
This module gives a brief overview of the fundamental issues in home owners’ associations, including the lack of specific national legislation. There is some historical background and a comparison between home owners’ associations, sectional title schemes and share block companies. The module introduces some specific terminology and shows how a home owners’ association can be used as the management body for a development made up of other home owners’ associations, sectional titles schemes and share block companies.
MODULE 2: DESIGN & FORMATION OF AN HOA
Module 2 explains how different types of land and different classes of property may be included in a home owners’ association development. The module identifies and compares the two types of legal entities most commonly used as home owners’ associations and describes some unusual applications of this development methodology. An example of a sub-divisional approval requiring the establishment of a home owners’ association is included.
MODULE 3: GOVERNANCE DOCUMENTATION
This module identifies the usual content of the governance documentation of a home owners’ association. Examples of clauses from the governance documentation of two actual associations are used to illustrate how the provisions are made in common law associations and non-profit home owners’ association companies. The module demonstrates how a memorandum of incorporation form is completed to tailor the governance provisions of a company for use as an HOA.
MODULE 4: MEMBERS, THEIR MEETINGS & DECISIONS
This module details the formalities of becoming and ceasing to be a member of a home owners’ association and how this process is necessarily entrenched in the association’s governance and ancillary documentation. The provisions of the Companies Act applicable to the meetings of owners in a non-profit HOA company are detailed and compared to the equivalent provisions in a common law association’s documentation. Examples from real associations are used as illustration.
MODULE 5: EXECUTIVE COMMITTEE MEMBERS, THEIR MEETINGS & DECISIONS
Module 5 examines the requirements of the Companies Act regarding the appointment and functions of directors of non-profit companies. A comparison is made with similar provisions in the constitution of a common law association.
MODULE 6: FINANCES, ACCOUNTING, DISCLOSURE & AUDITOR
This module details the provisions in the Companies Act that apply to accounting and keeping financial records in a non-profit HOA company. As many of these processes are used in common law associations, the module illustrates how these principles are provided for in a real common law HOAs constitution.
MODULE 7: HOA ADMINISTRATION
Module 7 examines administrative practices in HOAs. Included is how to manage the collection of arrear levies, interest and fines on arrear levies and how the National Credit Act and the Debt Collector’s Act apply to HOAs. The module also provides guidance on record keeping, rendering the required returns, the physical management of the communal and individually owned property and how to deal with service providers such as attorneys and managing agents.
MODULE 8: REMEDIES
Module 8 explains the various options that members of HOAs have to seek redress if their rights in terms of the governance documentation of the HOA have been infringed. The least formal methods of dispute resolution, negotiation and conciliation, as well as the more formal course of arbitration are explained. The Companies Act provides additional avenues to members of non-profit HOA companies. The Act describes actions that are offences and this module explains how members can use the Companies and Intellectual Property Commission, the Companies Tribunal and the courts under the specific circumstances detailed in the Act.
MODULE 9: BUSINESS RESCUE
Sometimes, companies encounter financial difficulties so great that it seems the only outcome can be the liquidation and winding up of the company. This module introduces a procedure designed to save companies in major financial trouble. The module explains how the process is begun and what its legal effects are on the company, its members and its employees. It also explains that a specific person is tasked with managing the rescue process, what approvals that person needs to perform the function, what his or her powers and duties are and that the rescue is completed by the implementation of that person’s plan to rescue the company.
MODULE 10: TERMINATION OF AN HOA
There are various reasons why a home owners’ association might be terminated. This module gives an overview of the consolidation, conversion and collective sale of HOAs and the processes of winding up and de-registering a company.
Anyone involved in the management of HOAs, and particularly those who render management services to HOAs, including managing agents, portfolio managers, estate managers, directors, chairpersons, estate agents, scheme auditors and accountants, attorneys, dispute resolution service providers and trustees.
Ané de Klerk is an admitted Attorney of the High Court (BA, LLB), specialising in both sectional titles and HOAs. She has extensive experience as a Portfolio Manager of a large managing agency, as well as being the Course Instructor on all Paddocks short course since 2019.