All Home Owners Associations (“HOAs”) and their home owner members should be aware of the recent High Court judgment of Vanilla Street Home Owners Association v Ismail and Another (A345/2013)  ZAWCHC 25 addressing the knotty problem of a HOA’s powers to bar an owner from running a home-based business.
The Case: Municipal Zoning v HOA Rules
In a nutshell
Home Owners Associations: Check your constitution and conduct rules to ensure that you have adequate powers to preserve the residential character of your development. Take advice in doubt!
Home Owners: If you want to run a home business, check both the local zoning regulations and your HOA’s constitution and conduct rules before you open your doors. Again, take advice in doubt!
For the sake of simplicity and brevity the above article does not address various other defences raised by the respondent and addressed in detail in the judgment.
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I have a client in a similar situation and used this to advise him, it saved him all the legal costs and time . Thank you for this service!
I think the Court that upheld the appeal in this instance erred.
Firstly, in the South African Constitution, Section 19 - clause/rule/law A, states "No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property." - the fact that the HOA's had such a clause in there constitution as a pre-condition to purchasing property is a violation of the above mentioned right in the Bill of Rights in the South African constitution.
Secondly, the HOA's lawyers tries to validate the HOA's constitution by arguing that if it was wrong then the City Of Cape Town should not have allowed it, whether the City identified the error in the HOA's constitution or not, it does not make the HOA's constitution legal.
Thirdly, following on the above, the HOA's lawyer mentions a bi-lateral mistake & a unilateral mistake, I put it to you that the bi-lateral mistake here falls on the side of the City & the HOA, in the Bill of Rights of the South African Constitution, under the Section 27 - "Just administrative action" clause A reads "Everyone has the right to administrative action that is lawful, reasonable and procedurally fair." the City made an administrative error in NOT recognizing the restrictive clause & when they passed the HOA's constitution they inadvertently violated the property owners right to just administrative action in that the City's decision to pass the HOA's constitution had an adverse determination on the rights of the said property owner & or other present or future property owners in the complex. Unilateral error, the appellant court should have recognized that the restrictive clause in the HOA's constitution was illegal, secondly, on that grounds the case should have been kicked because as a general principle in the courts, no Court of Law will lend its aid in enforcing an ILLEGAL contract. I think that if the respondent took this matter to the constitutional court, the judgement would be different.
Interesting article - I tend to agree with the Court - rules are rules. But with that said, a bit of "neighbourly charity" goes a long way too? If the hairdressing salon is not disturbing anyone or causing traffic problems - why be mean? Its her source of income. Too many people out there with issues and really should go about their daily lives focusing on bigger things in life. Whatever happens to this lady - maybe a single mother with children to feed and now no income? Well...let that be on the HOA's conscience....the wheel always turns....
What if there was no mention of membership to a HOA in her title deed and her sale agreement?Although development was approved with the condition to be a member of the HOA?