A new ruling by the Supreme Court of Appeal (SCA) has cleared up any misconceptions homeowners in estates might have about being issued fines and having penalties added to their levies for breaching the rules put in place by homeowners associations (HOA).

According to Johan du Toit, head of department for property disputes and contractual and delictual litigation at law firm Barnard Incorporated, it has become a common feature of estate living for homeowners to have penalties applied to their levies for being in breach of estate rules.

One of the most common penalties is traffic fines – even when guests are caught speeding in the estate.

“If you live in an estate, you probably have first-hand experience of the following scenario: You invite all your friends for a braai at your place to celebrate your birthday and to watch the game. Your buddy Jan decides to drive home that night, despite the fact that you urged him to rather use an Uber.

“At the end of the month, when you receive your levy bill from the HOA, you notice that it is R1,500 more than usual. On further enquiry, the HOA sends you a photo of Jan’s car, stating that he drove in the estate at 70km/h on the date of the braai, while the speed limit in the estate is only 40km/h,” du Toit said.

Is this legal? Is the HOA allowed to add the speed fine to your levy? These questions were recently answered by the Supreme Court of Appeal (SCA) in a new case.

The case dealt with a homeowner in a prominent estate on the KwaZulu Natal north coast. The estate’s home association’s Memorandum of Incorporation (MOI) made it obligatory for all homeowners of the estate to be members of the HOA.

In 2013, one of the homeowner’s children was issued three contravention notices for exceeding the estate’s speed limit of 40km/h. In all three cases, a penalty of R1,500 was imposed and charged as part of the levy to the homeowner.

The homeowner appealed against the first two penalties but not the third. Their appeal on only one of the contraventions was successful and therefore required to pay R3,000 in fines for the other two, which they refused to do.

The HOA subsequently deactivated the access cards and biometric access to the homeowner and members of their household.

The matter was brought to the Durban High Court, where the homeowner sought to get their access cards reinstated and the estate’s conduct rules overturned. The court ultimately ruled that the HOA should reactivate the access cards but dismissed the challenge to the rules.

The homeowner appealed the ruling and subsequently won, with the full court declaring the applicable conduct rules were unlawful. The HOA then appealed against the order to the SCA.

The essential question before the courts was whether the roads in the estate were deemed to be public roads and therefore subject to the National Road Traffic Act or whether they were private roads, du Toit said.

“The courts below the SCA accepted a concession by the HOA’s counsel that the roads in question were public roads and that the Act was therefore applicable,” he said.

“The full court, therefore, held that in agreeing, as between members, speed limits, the erection of traffic signs and installation of speed humps, the association was seemingly taking over the functions reserved exclusively for the authorities under the Act and that its conduct in so doing was therefore unlawful.”

Arguing before the SCA, however, the concession that the estate’s roads were public was withdrawn as being “erroneously made”. The SCA found that the roads in the estate were indeed private.

“At the inception of the estate, the roads within the estate were private roads. That never changed. The roads did not thereafter acquire the character of public roads.

“The estate is enclosed by a two-metre-high palisade fence, which is topped with electrified security wiring. All ingress and egress to the estate are strictly controlled. Gated access points are controlled by security guards. Visitors are required to provide the guards with an access code to gain entry to the estate.

“In respect of owners, biometric scanning is employed. This de facto situation accords with (the MOI), which provides that the association is obliged to provide such security in the estate as it deems appropriate.”

According to du Toit, the basis for the SCA’s position is that the general public does not have access to the roads within the estate – however, even if it did, it would not change the facts.

“In this context, the word ‘public’ does not include persons who are there with the permission of the owners of property within the estate. The public, so it has been held, must be the general public, not the special class of members of the public who have occasion for business or social purposes to go to the estate, and the use of the roads by the public must be more than mere casual or isolated use,” he said.

The SCA held that, even if the roads of the estate were deemed public roads, the reasoning of the full court could not be accepted.

The SCA said that when the homeowner chose to purchase property within the estate and become a member of the association, they agreed to be bound by its rules. The relationship between the association and the homeowner is thus contractual.

“The conduct rules, and the restrictions imposed by them, are private ones, entered into voluntarily when an owner elects to buy property within the estate. By agreement, the owners of property within the estate acknowledge that they and their invitees are only entitled to use the roads laid out within the estate subject to the conduct rules,” the SCA said.

“Any third-party invitee only gains access to the estate with the prior consent of the owner concerned. Upon gaining access to the estate, responsibility for any breach of the conduct rules by the invitee is that of the owner.”

“Any breach of the conduct rules is therefore a matter strictly between the owner concerned and the Association. No sanction is imposed on the third party. The third party’s adherence to the rules is thus a matter for the owner who invited him or her onto the estate.

“It is the owner who has to ensure that the third party complies with the conduct rules or bear the consequence of any sanction imposed in consequence of such non-compliance. There is nothing in the rules which provides for any consequence for a third party who fails to comply therewith.

“The control of the speed limit within the estate therefore falls squarely within the provisions of the contract concluded between the Association and the owners of the properties within the estate. The rules are obviously enforceable only as between the contracting parties, and not against the public at large.”

The answer to the question of whether fines for speed transgressions by homeowners’ guests in estates may legally be charged to the homeowner’s levy can therefore be found in the wording of the estate’s MOI and conduct rules, du Toit said.

“Like any other contract between parties, the content thereof should be scrutinised carefully, and any concerns should be raised first before signature thereof. It is always a good idea to gain legal advice in this regard, too.”

Du Toit added that the content of these documents could, of course, be challenged by using the normal principles of the South African law of contract, and the normal contractual remedies would be available depending on the nature of the dispute.

Read: What you need to know about levies in complexes and estates in South Africa