It sometimes happens that the Developer buys land and develops a complex – he gives it a name, sells all the units and disappears. The owners have no idea what entity the developer created for governing the complex. They only come together when there is something to be done to the common property and all contribute equally to have it done.
It will be better to do things the right way – if one of the houses is sold, the new owner can say that they had not been informed that there is any obligation on them to contribute anything to the common property expenses.
- First of all you have to do a deeds search on the name of the complex – it could just as well be a Sectional Title scheme. If this brings up nothing you would go to the next step
- You can also do a deeds search on the name of one of the owners using their ID – all property registered in their name will appear – it will show if they own a sectional title unit in a scheme; then you can do a search on the scheme and see if the erf number is the same; or if the other owners registered as owners of units are your neighbours. If it just shows a full title property registered in the name of that owner i.e. Erf 123, Kosmosdal Ext 24 it means that it is definitely not a sectional title scheme, but you have something to use at the municipality.
- Go to the local municipality and find out what conditions were imposed on approval of the subdivision of the land – Get a copy of the conditions
of approval which will almost certainly stipulate what type of entity the developer had to create to run the Home Owners Association (HOA).
- Do a company search on the name of the complex at the Companies and Intellectual Property Commission (CIPC) – If it brings up nothing it does not mean that it is not a company – the developer could have opened the company in another name.
- Find out which attorneys were acting for the developer in creating the scheme. In almost all cases this will be the same attorneys who did the initial transfers of land units in the HOA. Find out who worked on the matter in the legal firm, because that lawyer will most probably have drafted the constitution or the articles of the HOA. If you have bought directly from the developer they would have dealt with the transfer.
- If you find out that your complex is a HOA – Non profit Company (NPC) you can go to the CIPC – the Registrar of Companies and get a copy of the Memorandum of Incorporation – this will show exactly which properties were all included in the HOA. You can then do a deeds search on each of these properties and find all the members. Some of the Municipalities have the facility to give you a layout plan of the Township to see where each of the erven is situated.
Once you have determined if it is a Sectional Title Scheme, a HOA with a Constitution (registered at the Municipality or a Company (NPC) you can take further action.
You will have to make sure that it is included in each owner’s title deeds that they are a member of whatever entity you found your complex to be.
You can always appoint a Managing Agent to assist you with all these searches on the promise that they will be appointed as Managing Agent of the complex once all the information has been received.