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Homeowners Associations vs. Voluntary Associations

Are you considering subdividing your small piece of undeveloped land into smaller portions to sell at a profit?

Do you have to go through the laborious process of registering a Homeowner’s Association (HOA) at the Companies and Intellectual Properties Council (CIPC)?

Or is there an easier, less complicated entity that prospective owners can belong to, to collect and manage levies and maintain common areas?

The answer is yes! A Voluntary Association (VA) is created when between three and twenty persons (members) agree to achieve a common, non-profit objective.

The VA exists separately from its members, which means that any money or assets belonging to it may only be used for its benefit.

The Voluntary Association must have a constitution which specifies amongst other things that:

1. The existence of the VA is not dependent on members joining or being replaced;

2. The assets and liabilities of the organisation will be held separate from its members;

3. What the characteristics of the VA is;

4. What the objects of the VA are.

The VA will only be regarded as such and gain legal personality if it complies with the requirements as set out above and if it does not carry-on business for the sole purpose of gain.

We recently assisted a client in drafting a VA’s constitution for a development in Bryanston consisting of three portions. According to the title deed the VA owns the servitude used by the owners who are required to contribute equally to the creation of the common driveway and its maintenance.

We can do the same for you at a fraction of the price of creating and registering a HOA.

Contact us for more information on your property las needs.


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