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Buying in a security estate: rules, levies and what to ask
Buying in a security estate means you also buy into a set of rules and a monthly levy. Before you sign, ask for the homeowners association (HOA) rules, the levy and what it covers, the latest financial statements, the building and design guidelines, and any special levies. The estate may suit you well, but the costs and restrictions come with the property and bind you from the day of transfer.
How an estate is set up
Most estates are run by a homeowners association, a body that every owner must belong to. Membership and the duty to pay levies usually come from conditions in the title deed. Some estates are freehold, where you own the stand and house. Others are sectional title, where you own a unit and share the common property, and then a body corporate runs the scheme. Ask which kind it is, because the rules differ. If it is sectional title, read buying sectional title: what to check first too.
The levy usually pays for security, the gatehouse, maintenance of roads and gardens, street lighting, refuse and shared facilities such as a clubhouse or pool.
Levies and money
- The monthly levy and what it covers. Does it include security, water, refuse or electricity? Some estates bill these separately.
- Recent increases. Ask what the levy was in the past few years and what increase is planned.
- Special levies. Ask whether any have been raised or are planned, for example for road repairs, a new gate or perimeter work.
- Financial statements. Ask for the latest ones and the current budget. Look at whether there is money set aside for big repairs.
- Arrears. Ask how many owners are behind with levies. Unpaid levies can strain the budget.
- Levy clearance. The HOA’s clearance on transfer comes from the title deed conditions and the HOA’s rules, not from a statute. The seller must settle arrears so it can be issued.
Add the levy to your bond repayment, rates and insurance to get your real monthly cost. The affordability calculator and the monthly costs of owning a home will help.
Rules that affect how you live
An estate has its own rules, often called the constitution, the rules and the design guidelines. Get copies and read them before you make an offer.
- Building and renovations. Many estates need the HOA to approve building plans, colours, roofing, walls, gates and extensions, and may charge a fee. Find out what approvals you need before you plan any alterations.
- Time limits. Some estates require you to build within a set period after buying a vacant stand. Check the rules if you are buying land.
- Pets. Limits on number, size or type are common.
- Renting out. Some estates restrict or limit letting, or add fees. This matters if you may rent the home later. See buy-to-let: does it pay?
- Vehicles and parking. Look for limits on commercial vehicles, caravans, boats and parking on the street.
- Noise, trading and visitors. Ask about home businesses, deliveries, contractors’ hours and visitor access.
- Solar and external changes. Check whether panels, antennas, awnings and air conditioners are allowed. See solar and backup power when buying.
Security and services
Security is the main reason many people buy in an estate, so test what you are paying for. Ask who provides it, what the contract covers, and what happens if the security company changes.
- Visit at night and on a weekend. Note how visitors are checked at the gate.
- Look at the perimeter fence, the cameras and lighting.
- Ask about break-ins and what the HOA did in response.
- Ask about the roads, drainage, water supply and electricity supply. Who maintains them, and are they in good condition?
- Ask who owns and maintains shared facilities and what they cost.
Questions for the HOA or managing agent
- What is the current levy, and what is planned for next year?
- Are there special levies, disputes or legal cases?
- Can I see the rules, the design guidelines and the last year’s minutes?
- How are disputes between owners and the HOA resolved?
- Are there rules on letting, pets and vehicles that affect me?
- How much money is held in reserve for big repairs?
Put anything that matters to you into the offer, or at least into an email you keep. See the offer to purchase: what to check. Our list of viewing questions also helps.
What to do next
- Request the HOA rules, levy figures and financial statements before you make an offer.
- Test the monthly cost on the affordability calculator.
- Compare estates on PropertyNow.
This article is general information for South African readers, not legal, financial or tax advice. Rules and rates change, so check your own situation with an attorney, your bank or a tax practitioner. Our property calculators can help you work out the numbers.