Residential Estate Industry Journal 5 | Page 34

DIRECTOR FOCUS

AN INTRODUCTION TO COMMUNITY

ASSOCIATION LIVING

What is the role of a community association ? What ’ s the difference between sectional title and freehold communities ? And how does all this work ? These questions and others are answered here .
Waterfall Equestrian Estate
Firstly , what is a community association ?
According to Jeff Gilmour , the president of the Association of Residential Communities SA , and as stated in the Homeowners Association Manual , by Peter and Marc Dunbar :
Mandatory homeowners associations are part of an overall concept of residential property ownership . Purchase of the home brings with it membership of the association , which provides the structure for operation and management of the residential community concept . Membership includes certain mandatory obligations , financial responsibilities and rules of the association .
A community association is an organisation established to govern a residential community . It usually owns and manages the common property of the community for the owners .
Purpose of a community association
Community living is very popular at present , due to the inherent benefits associated with communities and their associations . The main responsibilities of the community associations are to :
•• maintain and beautify all common areas
•• ensure that security is maintained
•• communicate with all residents
•• keep proper records and books of accounts
•• enforce agreed rules and regulations
•• protect the interests of property owners
•• offer various services and amenities to owners and residents
•• encourage or organise social activities , thereby fostering a sense of community among residents .
There are two basic types of community associations , namely sectional title and freehold developments . In a sectional title development , a body corporate is established through which levies are raised . In a freehold estate , each owner has exclusive ownership to the property purchased , as well as an interest in the communal areas . The common areas , such as roads and parks , are owned by the association , of which every owner is automatically a member .
Legal issues affecting community associations
Regulations for freehold development are contained in the Companies Act , and for sectional title development in the Sectional Titles Act . Associations are obliged to comply with various codes and laws established by local government of municipalities , e . g . local fire codes or health and safety laws . Additionally , rates , taxes , and other charges are levied on all common areas by the municipalities . Any expenses arising as a result of these codes would need to be reflected in the association ’ s budget .
The governing documents
The role of the governing documents of an association is to provide the structure for the operation of the community , e . g . to :
•• formalise the relationship , and detail the rights and obligations between owner and association
•• establish rules and regulations that will protect the value of the individual and common property , and create standards that will enhance the living conditions within the community
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