AA - 2017

Author:  Maryna Botha – STBB
14 February 2017


Typically when buying a stand in a proposed development, the agreement provides that the landowner shall erect a house within a stipulated period, failing which the homeowners’ association (HOA) may impose a penalty. This ensures that the development reaches its investment value within anticipated time frames and safeguards other owners from the implications of continuous building operations. The period generally ranges from one to five years.

Our courts have confirmed that an HOA, in its governing documents and rules, may validly impose such penalties provided they are not unreasonable. These nonetheless often dilute whatever profit the owner anticipated to make on a later sale.

Therefore, when buying land in such a development, be sure to negotiate all of the HOA requirements regarding building time frames. It is in your best interests to obtain the assistance of your conveyancer before committing yourself in writing.

Contact STBB I Smith Tabata Buchanan Boyes on STBB.