Pay or say – you decide

If you like to follow your own lead, think carefully before buying property in complexes where a body corporate or a homeowners’ association (HOA) makes the decisions.

Sectional title schemes are usually governed by a body corporate that enforces standards and rules, while cluster villages and estates are generally governed by an HOA, notes Berry Everitt, MD of the Chas Everitt International property group.

“And while living in such a secure complex may enable you to live a lock-up-and-go lifestyle and be free of many maintenance chores, it does also mean that somebody else will always have a say in what you may do to the exterior of your home, for example, or just how the levies you pay will be spent.

“So if you have any qualms about leaving such decisions to others, you should do your homework thoroughly before taking the leap.”

Writing in the Property Signposts newsletter, he recommends that potential buyers take the following steps:

* Get a copy of the body corporate or HOA’s rules and make sure you understand them – once you buy a unit, you enter into a contract that you will abide by the rules. Potential conflicts may include restrictions on the size, type and number of pets; exterior fixtures such as antennas, clotheslines, and flags; fence types and the colour of paint; and whether home-based businesses are permissible;

* Ask what the monthly levies or contributions will cover and establish how often levies are increased;

* Ascertain that there is an adequate reserve fund to meet unexpected expenses – without such a fund there is a real danger that your property value may be affected if unforeseen repairs to common property cannot be made due to lack of funds; and

* Ask for the minutes of recent meetings and the latest financial statements. If these are unavailable, think twice before committing yourself.

“In short,” Everitt says, “you need to be very clear that you are comfortable trading off the freedom to make all your own decisions regarding your property for the convenience of having someone else maintain the property and oversee security.”

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