Body Corporates and Home-Owners Associations

A Body Corporate is a legal entity created in terms of the Sectional Titles Act and managed in terms of the Sectional Titles Schemes Management Act. The main function of a Body Corporate is the division of a property into parts that are exclusively owned by individual owners and other parts that are jointly owned in undivided shares, referred to as common property.

Membership fees are paid in terms of a body corporate and may be able to claim a deduction for body corporate fees and charges you incur for your rental property in terms of tax. Body corporate fees and charges may be incurred to cover the cost of day-to-day administration and maintenance.

Body corporate by-laws are a set of rules which apply to a particular body corporate. When owners or occupiers agree to live in the scheme, they agree to abide by these rules. Each body corporate may create their own by-laws, but they must not contravene anything in the Body Corporate and Community Management Act.

It is important to note that the body corporate cannot legally evict a non-compliant tenant, but they can fine the owner or even take further legal action in extreme cases.

When compared to a home-owners association which is created in terms of any specific national legislation and the common property is usually transferred to and registered in the name of the home-owners association which exists as a legal entity separate from its members, none of whom shall in their personal capacities have any right, title or interest to or in the property, funds or assets of the home-owners association.

Understanding home-owners associations:

Home-owners associations are formed by communities with single-family homes or multiple-unit buildings, such as condominiums. Home-owners associations are comprised of, and run by, the community’s residents, usually a requirement to buy a home within the community regulates membership. It has a board of directors or governors, elected to enforce and oversee the home-owner association’s rules and regulations which are contained in a Declaration of Covenants, Conditions, and Restrictions (CC&Rs), which set certain conditions on owners and their properties.

Common functions home-owner associations include:

• control over all aspects of the design, aesthetics, and maintenance of all buildings, improvements, and landscaping within the development
• to enforce the conditions of subdivision approval or management plans listed in the conditions registered with the local municipality
• promotion, advancement, and protection of the communal and group interests of the members generally in regard to the development
• compliance with the estate rules
• to ensure that all properties within the development are developed as soon as is reasonably possible.