PROPERTY RIGHTS AND ENFORCEMENT OF HOME OWNERS’ ASSOCIATIONS RULES IN GATED COMMUNITY SCHEMES
Author: Nina Valetta
Introduction
The article highlights a legal battle between Stephen Leggatt (Leggatt), a resident of a luxury estate, Blair Atholl, and the Blair Atholl homeowners’ association (HOA) over unpaid levies and access rights.
The core dispute revolves around Leggatt’s refusal to pay levies as a result of the HOA’s failure to meet its obligation to maintain a dam on the estate’s common property, leading to the dam’s deterioration thereby negatively impacting the values of his properties.
In response, the HOA revoked Leggatt’s biometric access and certain privileges, including use of the golf course (though fees were paid).
Leggat approached the High Court on an urgent basis in order to have his access and privileges restored. He was granted interim relief as prayed for.
The HOA has now been granted leave to appeal to the Supreme Court of Appeal (SCA) and the matter is pending adjudication in the SCA.
Table of Contents
Introduction
Issues
The Law and it’s Application
Conclusion
issues
- Whether an HOA can revoke a resident’s biometric access to the estate and its facilities for non-payment of levies.
- Whether residents can withhold levy payments until the HOA fixes a common area amenity. In this case a dam.
- The extent of property rights in a gated community scheme.
- Protection of the rule of law from the point of view of the HOA.
- Whether HOA’s must resort to the courts to enforce their rules against defaulting residents, or whether they can act without a court order and act according to the HOA’s constitution.
- Whether the High Court has jurisdiction at first instance in such cases or aggrieved parties must first approach the Community Schemes Ombud Services (CSOS).
- New technologies, in this case biometrics, create novel legal challenges as the courts now have to interpret legal principles (in this case spoliation) to cater for “the new order”.
The Law and it's Application
In Leggatt & Another v Blair Atholl Home Owners Association NPC Manoim J acknowledged the Heathrow Property Holdings case in which it was held that the CSOS might be the preferred forum for the resolution of disputes such as this one. Section 2(c) of the Community Schemes Ombud Service Act (the Act) states that the office of the ombud is a dispute resolution mechanism in community schemes such as the HOA in this case. Section 57 of the Act states further that parties in any matter referred to the ombud may appeal against a ruling of the ombud to the High Court but only on a question of law.
The Judge distinguished this case from the Heathrow Property Holdings case by observing that as Leggatt’s case primarily concerned common law remedies (spoliation and an interim interdict), it did not require the CSOS’s expertise in community scheme governance. He agreed with Leggatt in that Leggatt was not challenging the rules of the scheme but rather their enforcement. In conclusion of his rationale on this issue the Judge held that the High Court has discretion and can hear the case especially under urgent circumstances or when the dispute falls outside the expertise of the CSOS.
The Court in Leggat was surprisingly silent on the provisions of the Act and the writer is of the opinion that the Court should have taken a holistic approach and at least canvassed its provisions. If this had been done maybe the issue of jurisdiction would have been resolved definitively and we would not have a lopsided determination.
To justify the non-payment of levies, Leggatt relied on the common law defence of exceptio non adempleti contractus. This defence can be raised in the case of a reciprocal contract and it allows a party to withhold its own performance. For this principle to be applied, the two performances must be reciprocal and the other party must be obliged to perform first.
However, the Court does not address whether exceptio non adempleti contractus applies in this specific situation and rather focuses on Leggatt’s right to access the estate and golf course using spoliation and interim interdict remedies. With respect to the Court, we are left none the wiser as the Court’s approach at this point leaves us in a situation where it is unclear whether the success of spoliation and granting of an interim interdict to Leggatt hinges on the success of exceptio non adempleti contractus. As a further observation, this defence seems to be misplaced as exceptio non adempleti contractus applies to withholding performance of contractual obligations and not access rights.
(130295/2023) [2023] ZAGPJHC 1528 (27 December 2023) accessed from https://lawlibrary.org.za/akn/za-gp/judgment/zagpjhc/2023/1528/eng@2023-12-27
Supra Page 4 paragraph 13
9 of 2011
Supra
The Court was also faced with the task of interpreting and applying the common law principle of mandament van spolie (spoliation) as we know it. This talks to the issue of advancement in technology presenting novel legal challenges. In the strict sense, spoliation is relied on by a person who has been dispossessed of peaceful and undisturbed possession of one’s property without following due legal procedure.
Evidencing the aforementioned challenge presented by advancement in technology, Manoim J remarked that “This might appear a surprising remedy given that Leggatt has not been denied access to his property and he can still enter through the security-controlled entrance”. In dealing with this issue Manoim J cited with approval the case of Bill v Waterfall Estate Homeowners Association NPC and Another where it was held that “…biometric access exercised by the applicant is an incident of the applicant’s possession of the property and thus constitutes a possessory right which may be protected by the mandament”.
In finding in Leggatt’s favour, the Court at paragraph 19 went further to state that he had no reason to differ with the view of the Court in the Bill case as it was held therein that “Accordingly, given that it is the particular method of access, in other words biometric access linked to the property, which has been deactivated, the applicant has been dispossessed of this right. In the circumstances, it matters not, where this right is the subject matter of the application, that he has an alternative method of accessing the estate”.
Conclusion
The key points of law that were left unresolved by the Court are:
- Whether exceptio non adempleti contractus is a valid defence in these circumstances.
- Would a successful exceptio non adempleti contractus argument necessarily reinstate Leggat’s access rights, or it would only affect the levy dispute
- Jurisdictional boundaries – While the CSOS might be preferred as the forum of first instance, a clearer definition of when the High Court can intervene is needed.
As the case is headed for the Supreme Court of Appeal, one hopes that the Court will close the gaps created by these unresolved issues.
Supra Page 5 Paragraph 18
Supra Page 5 Paragraph 18
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