Just before 2025 wrapped up, the Gauteng High Court handed down another judgment that will impact property owners, homeowners’ associations (HOA) trustees, and community-scheme managers.

Describing it as a firm and practical ruling, Johlene Wasserman, director of community schemes and compliance at VDM Incorporated, welcomed the court’s confirmation. She noted that a litigant cannot accept the benefits of a settlement offer while rejecting the conditions attached to it, particularly when those conditions relate to costs.

“The High Court’s November judgment is excellent; it offers important clarity for community schemes,” she says.

“It’s a textbook example of why settlement mechanisms exist, and what happens when they are strategically misused.”

Court records show that the dispute began when a homeowner, ‘Jennifer’, clashed with the Centurion Homeowners Association over her revised building plans.

When the HOA initially refused to approve her plans, Jennifer launched a High Court review. But once litigation was underway, the HOA changed course.

“It approved the plans and delivered them to Jennifer under a formal Rule 34 settlement offer, marked ‘without prejudice’ and expressly excluding any contribution to her legal costs,” says Wasserman.

Jennifer accepted the benefit, continued using the approved plans to secure municipal approval, and ultimately obtained her occupation certificate. She continued litigating, arguing that the HOA’s approval was an independent administrative act, not part of the settlement offer.

“The court rejected that argument outright. It held that the approval was tendered as part of a conditional settlement. The fact that the plans were stamped before delivery did not magically detach them from the terms of the offer. In simple terms, you can’t take the performance and reject the terms. Settlement doesn’t work that way.”

Wasserman says the court also criticised Jennifer for disclosing the without-prejudice offer in her affidavits; a direct contravention of Rule 34.

“While the HOA had taken a misstep in its procedural response, the court stressed that settlement mechanisms only function when both sides respect the rules.”

By the time the court heard the matter, the dispute was effectively over. Jennifer had already obtained the relief she sought.

“The court dismissed the review as moot and made no order as to costs, noting that awarding costs in these circumstances would encourage opportunistic litigation and undermine the purpose of settlement procedures,” she says.

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Why this judgment matters
The ruling, says Wasserman, sends a message to anyone involved in HOA or property-related disputes: you cannot accept the benefits of a settlement tender while rejecting its conditions, and Rule 34 offers remain protected.

“Even if one party tries to reframe the offer as something else, like an administrative concession, the court will look at the substance, not the spin. The courts will not entertain litigation strategies aimed at squeezing out a costs order after the substantive relief has already been achieved.

“For HOAs, the judgment reinforces that they can resolve disputes pragmatically without being punished for doing so. For homeowners and litigants, it’s a warning: selective use of settlement offers will not be rewarded,” she notes further.

The court also reaffirmed that the high court retains jurisdiction over HOA disputes, echoing recent guidance from the Supreme Court of Appeal.

“This is welcome clarity in an area that has become increasingly muddled. Ultimately, the ruling champions fairness, procedural integrity, and responsible conduct in community–scheme litigation.”

Key implications for future HOA decisions
Drawing from the judgment, Wasserman highlights several practical implications that will shape how HOAs and homeowners navigate disputes in the future:
1. Conditional approvals and settlement offers
If an HOA approves building plans or similar requests as part of a settlement offer, that approval is conditional. A homeowner cannot accept the benefit – such as approved plans – while rejecting the terms, including a “no costs” condition. This prevents parties from cherry–picking favourable elements of a settlement while ignoring the rest.
2. Disclosure of ‘without-prejudice’ offers
Parties must avoid disclosing ‘without prejudice’ settlement offers in court documents unless the rules expressly allow it. Improper disclosure can lead to adverse cost consequences, even if the party ultimately succeeds on the merits.
3. Mootness and relief
If an HOA ultimately provides the relief a homeowner seeks, any ongoing legal challenge may become moot. Courts are increasingly unwilling to entertain academic disputes once the substantive issue has been resolved.

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4. Nature of HOA decisions
The judgment confirms that HOA decisions fall under contract law and the law of voluntary associations – not public administrative law. This means principles like the Oudekraal doctrine, which applies to public bodies, do not apply to HOAs. The Oudekraal doctrine comes from a 2004 Supreme Court of Appeal case, Oudekraal Estates (Pty) Ltd v City of Cape Town. It established a simple but powerful principle in South African administrative law: If an administrative act is invalid, it still stands and has legal effect until a court formally sets it aside.
5. Jurisdiction
The High Court remains a court of first instance for HOA disputes. The Community Schemes Ombud Service (CSOS) does not have exclusive jurisdiction, and parties do not need “exceptional circumstances” to approach the High Court directly.
6. Costs
Even if a homeowner obtains the relief sought, they may not be awarded costs if they did so by accepting a conditional settlement offer while rejecting its terms. This discourages opportunistic litigation and encourages transparent, good-faith dispute resolution.

In summary
“This judgment is a significant moment for community-scheme governance,” Wasserman says.

“It reinforces that settlement processes must be respected, that conditional offers cannot be selectively exploited, and that HOAs are entitled to resolve disputes without fear of punitive cost orders. For homeowners, it is a reminder that a litigation strategy cannot override legal principles.

“The court has drawn a firm line. Fairness, clarity, and procedural integrity must guide the resolution of disputes in community schemes. This judgment strengthens that foundation.”