Freehold property enclosed by boundary walls are referred to as “cluster homes” in South Africa. Cluster homes are commonly governed by a homeowners associations. Over the last few years this type of property development has seen an increase and their is some confusion over the legal status of cluster homes among South Africans.
In South Africa their is two ways in which you can own a property namely freehold and sectional title. With freehold the property is registered in your own name and you are free to manage the property independently. In the case of a sectional title you buy not only your unit but also an interest in common property such as gardens, swimming pools and security. you are responsible for the upkeep of your own unit but the administration and maintenance of the complex and common property are the responsibility of the body corporate and you are subject to the rules of the body corporate.
Cluster homes property are sold as freehold in south Africa. This means you gain individual title to your unit and garden and are entitled to use other parts of the property such as roads. Cluster homes are governed by a homeowners’ association with a constitution drawn up by elected Trustees and approved by a percentage of the owners. Because cluster homes are bought as freehold many owners believe that they are in no way tied to any association and that there is no legal link between them and their neighbours. The reality is that although the cluster home is bought as freehold property their is a clause in the offer to purchase and the title deed outlining that all purchasers acknowledged that they would automatically belong to the homeowners’ association.
The rules in a cluster development would encompass operational management issues and common area payments and as an owner you will be bound by a levy payment. In addition, a well-drafted set of rules will include architectural guidelines and will impose conditions on homeowners disallowing certain action.