The popularity of gated communities – and especially estates – has grown steadily over the past few years, thanks to the added security that they offer homeowners plus, in many cases, a complete live-work-and-play lifestyle incorporating sports and entertainment facilities, restaurants, wellness centres, schools and sometimes even shops and offices.
And the widespread switch to remote working from home in the past two years has further boosted home demand in these communities, with many people realising that they can now spend whatever time they used to spend commuting to the office to make full use of their estate’s facilities instead.
As we know, other families have also decided to move from their suburban homes to estates further away from the city centres, knowing that they and their children will still have everything they need right on their doorstep (and within a secure environment).
Property developers have also responded to the social and lifestyle changes of recent times, he notes, and are now not only creating new estates again but offering a wider range of property types within single estates - from apartments and townhouses suitable for young professionals and newlyweds, through small and large family homes to retirement cottages – as well as water and power back-up facilities and pre-laid high speed internet connections.
However, the shift in demand has also exposed an urgent need for buyers to better understand the major differences between buying a home in an ordinary suburb and a home in a gated estate that is run by a Homeowners’ Association (HOA) – the most important of which are that they will be required to pay a monthly levy and that that they will have to abide by the HOA’s constitution, its rules and its ongoing decisions.
These levies and rules are different for every estate, despite the fact that most HOAs are Section 21 companies and broadly governed by the Companies Act, says Kotzé, so it is vital that before buyers make a decision to purchase in a particular estate, they know exactly what that HOA has been doing up to now, what its position is on certain vital issues and what state its finances are in.
To establish all this, prospective buyers should ask the sellers’ agent for copies of the following, and read them before signing any offer to purchase:
The Memorandum of Incorporation (MOI) or constitution of the HOA, which sets out all of its duties and responsibilities with regard to collecting levies and to managing both the finances and the physical environment of the estate;
The appearance and conduct rules of the estate, if these are separate from the MOI. It is particularly important to establish whether these rules contain any restrictions on how homes in the estate may be used. Some don’t allow any sort of business to be run from residents’ homes, for example, while others strongly discourage owners from renting out their properties and require prospective tenants to be pre-approved.
A list of the current HOA directors and their roles, so that you would know who to approach if there was a particular problem - with security, for example, or with property maintenance; The minutes of the HOA meetings for at least the past year so you can confirm that there are no "hidden issues" in the estate or pending litigation which could lead to unplanned expenses for the HOA;