Vital checklist before buying in a gated estate

In many cases residents of a gated estate only have to leave the comfort of their community when heading off to work.

The growth of gated communities is testament to the popularity of such developments on the North Coast, which since 1994 has seen the highest number of developments in the district.

The number of sectional title homes on the North Coast has increased from 4 138 to more than 15 700 since 1994.

The added security of a gated estate puts many concerned South African homeowners’ safety concerns to rest, with the added incentive of a complete live-work-and-play lifestyle all within the confines of one location.

Today, one rarely finds an estate which does not have a connected commercial hub, restaurants, wellness centres and even schools attached to it.

But while this lifestyle does come with a multitude of benefits aimed at simplifying one’s life, there are factors one needs to consider when deciding between buying a suburban home, or moving into a gated estate.

Managing director of RealNet estate agency group, Gerhard Kotzé, said one should keep in mind that estates are run by homeowners’ associations (HOA) which have rules one needs to abide by.

Another difference between buying in a suburb versus gated estate is that estates charge a monthly levy.

“Levies and rules are different for every estate, despite the fact that most HOAs are Section 21 companies and broadly governed by the Companies Act,” Kotzé said.

This means it is vital for buyers to first familiarise themselves with the financial implications of levies, planned projects and what HOA’s position is on vital issues.

Kotzé has compiled the following list of things buyers should ask when discussing terms with a seller’s agent. Read any document thoroughly before signing an offer to buy:

• Ask about and understand the Memorandum of Incorporation (MOI) or constitution of the HOA which sets out all its duties and responsibilities with regard to collecting levies and managing finances and the physical environment of the estate.

• Ask about the conduct rules of the estate if these are separate from the MOI. It is particularly important to establish whether these rules contain any restrictions on how homes in the estate may be utilised. Some don’t allow any sort of business to be run from residents’ homes, while others strongly discourage owners from renting out their properties and require prospective tenants to be pre-approved.

• Obtain a list of the current HOA directors and their roles so you know who to approach if there is a particular problem, such as security issues or property maintenance.

• Check the minutes of HOA meetings for at least the past year so you can confirm that there are no hidden issues in the estate or pending litigation which could lead to unplanned expenses for the HOA.

• Study the current HOA budget, the year-to-date financial report on expenditure and the most recent levy collection record, which will together show how well the community’s finances are being managed.

• Also inspect the HOA insurance policy to determine that insurance cover on all communal parts of the estate is comprehensive and that the premiums are up to date.

“There is clearly a lot to consider and a lot of information to digest before one makes the decision to buy a home in an estate, but the process will always be easier if you deal with a reputable and registered estate agent who is able to access all the records you need, or from a recognised developer with a good track record,” Kotzé said.

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