Homeowners Association Conflict

The inclusion of a subsequent development into an existing Homeowners Association

Which forum should decide the HOA dispute?

Living in a community with shared spaces like a retirement village or lifestyle estate gives people a sense of belonging until something goes wrong. Then emotions, assumptions, and personal interests often take over.

This is exactly what happened in Parch Properties 72 (Pty) Ltd v Summervale Lifestyle Estate Owners Association [2025] ZASCA 155, a dispute that went all the way to the Appellate Division. It’s a story filled with lessons about leadership, inclusion, process and jurisdiction.

The Story of Parch Properties 72 V Summervale Lifestyle Estate Owners Association

Summervale Lifestyle Estate was a retirement village with its own HOA. The next-door property was rezoned, and garden cottages were developed on this property with the intention to make it part of the Summervale Lifestyle Community. Over time, these cottages were treated as if they were part of the retirement village — even though they were never formally included in the HOA’s constitution.

Here is what went wrong:

  1. The word “AREA” had a specific definition in the Summervale HOA Constitution and excluded the “next door property.”
  2. The Municipality approved the “next door development” on the condition that it becomes a part of the Summervale Lifestyle Estate.
  3. The cottages were rented out to people who were not retirees.
  4. The developer of the cottages was also serving as a trustee of the Summervale Lifestyle Estate HOA.
  5. The “next door neighbouring property owner/ residents” did not contribute to the shared infrastructure of the retirement village.
  6. The HOA’s constitution did not allow adding non-retired members.
  7. The Summervale residents felt disrespected and sidelined.
  8. Trust between members and the HOA collapsed completely.

Eventually, a special meeting was held. The majority voted to exclude the neighbouring property from the HOA. The matter went to court — and the Appellate Division agreed with the residents. The exclusion was fair and reasonable.

A. Lessons from the Case

When you look closely, this dispute teaches us more than just what went wrong — it shows what was missing.

  1. Timing

The municipal approval directly affected the Summervale Lifestyle owners. It was assumed that they would permit the neighbouring owner access into their community. Yet, if Summervale Lifestyle was already established, such a condition placed upon an existing community, is onerous, and their consent should have been formally obtained at the time of township approval. Instead, everyone appeared to proceed as though permission had been automatically granted. Years later, however, it emerged that the Summervale owners had never given such consent. There may be explanations for why this step was overlooked, but this case underscores once again that adherence to constitutional process is essential. Acting on the assumption that permission exists, when it has not in fact been secured, is both precarious and dangerous.

  1. The art of engagement

When a desired outcome is required, leadership within the HOA should be prepared to listen and engage.  Summervale members suggested for the garden cottage owners enjoying the facilities of Summervale to pay for such services. This was not an unreasonable request, and a payment commitment might have secured a different outcome.

  1. The Essence of the Community

If retirement is the core objective stated in a constitution, no additional lifestyle purpose may be incorporated without formal approval through the constitutional or founding document.

  1. Avoid Conflicts of Interest

When you find yourself on both sides of the fence—serving your own interests and that of the community —the situation becomes particularly challenging. You’re forced to take a stance and determine whose interests you are truly serving. If you prioritize your own interests, you inevitably place yourself in a compromising position. And once financial considerations enter the equation, the complexity deepens even further.

Human nature is to defend your own position — and that is why transparency and clear boundaries are essential.

B. Where Should Disputes Be Decided?

CSOS

In recent years, the Community Schemes Ombud Service (CSOS) has become the go-to platform for resolving community scheme issues quickly and affordably.

The process is straightforward:

  • The office of the Ombud first tries to help the parties reconcile.
  • If reconciliation fails, the matter is referred to an adjudicator for a formal ruling.
  • If the dispute is not suitable for conciliation, it can be sent directly for adjudication.

CSOS was created to help resolve community scheme problems.

Court Direction

We have received the following direction in the last years:

  1. Heathrow Property Holdings No 33 CC and Others v Manhattan Place Body Corporate and Others [2021] 3 All SA 527(WCC)

Thus: “…where disputes pertaining to community schemes such as sectional title schemes fall within the ambit and purview of the CSOS Act, they are in the first instance to be referred to the Ombud for resolution in accordance with the conciliative and adjudicatory processes established by the Act, and a court is not only entitled to decline to entertain such matters as a forum of first instance, but may in fact be obliged to do so, save in exceptional circumstances…” (emphasis supplied).

Exceptions, said the Court, would include challenges to the “constitutionality or legal validity or status of a particular statutory power or a provision in the Act” plus “in certain instances it is conceivable that the High Court may be approached in the first instance, as a review court.” 

  1. Prag N.O and Another v Trustees for the time being of the Mitchell’s Plain Industrial Enterprises Sectional Title Scheme Body Corporate and Others 2021 (5) SA 623 (WCC)

“It was clearly not intended that the Ombud would have the power to adjudicate on delictual claims for damages, which involve weighty considerations pertaining to wrongfulness (which depend on prevailing societal norms and public policy) and fault, and the quantification and determination of the quantum of any damages which may have been sustained pursuant thereto, which are matters which are best left for judicial officers and Courts.” 

  1. Body Corporate of Via Quinta v Van der Westhuizen N.O. and Another (A196/2017) [2017] ZAFSHC 215

“If the claim for arrear levies or contributions is not disputed, for example if an owner simply ignores a demand for payment or simply refuses to pay, without disputing the amount of the claim or the proper determination of the levy, the Body Corporate can institute legal action in court to recover the arrear levies from the owner … If, on the other hand, the amount of the levy is disputed because it was not properly determined and this dispute is raised after the defaulter had received a demand, the appropriate forum for recovery of the levies would be the regional office of the Ombud service.”

 it doesn’t replace the courts. If a dispute is complex especially those involving zoning, developers or constitutional interpretations, those are better suited for the High Court.

  1. Coral Island Body Corporate v Hoge 2019 (5) SA 158 (WCC)

“The promotion of access to justice by those not easily able to afford to litigate in the civil courts was but one of those considerations. Another was the social utility to be achieved by the provision of a relatively cheap and informal dispute resolution mechanism for the disposal of community-scheme-related issues. It requires little insight to appreciate that those commendable policy considerations would be liable to be undermined if the courts were indiscriminately to entertain and dispose of matters that should rather have been brought under the Ombud Act. Whilst judges and magistrates may not have the power to refuse to hear such cases, they should, in my view, nonetheless use their judicial discretion in respect of costs to discourage the inappropriate resort to the courts in respect of matters that could, and more appropriately should, have been taken to the Community Schemes Ombud Service’” 

  1. Parch Properties 72 (Pty) Ltd v Summervale Lifestyle Estate Owners Association

    [2025] ZASCA 155

“The CSOS Act does not explicitly or implicitly exclude the high court’s inherent jurisdiction to hear community scheme disputes. The fact that the Ombud has wider powers does not imply the exclusion of the court’s jurisdiction. In our view, the Act was designed to co-exist with the court system providing the parties with a choice of a forum, not to replace it entirely. Counsel on behalf of Parch submitted, correctly in our view, that the high court had jurisdiction to entertain the application as a court of first instance. We are persuaded that the high court did not need exceptional circumstances to entertain this application as a court of first instance. The dispute is deserving of the high court’s attention and should not have attracted a Coral Island costs order, had Parch been successful.”

Choosing the right dispute forum

My understanding of the Courts’ position is that parties have a choice of forums. Certain disputes properly fall within the jurisdiction of the CSOS forum, while others—particularly those involving complex legal questions, constitutional issues, requests for statutory interpretation, or claims for damages—are more appropriately adjudicated by the Courts.

The Parch Properties matter is an appellate decision that serves as a guiding precedent within the HOA fraternity, providing direction on dealing with community disputes.

Written by Michelle Horn and edited by Erusha Reddy.