DEVELOPER’S LEVY LIABILITY IN NEW TOWNSHIP QUESTIONED
Prospect SA Investments 42 (Pty) Ltd v Lanarco Home Owner Association (13346/12)  ZAKZPHC 39 (30 June 2014)
There are fairly regular incidences of matters where developers question their liability for HOA levies in respect of erven in townships opened on large parcels of land they own. This judgment adds a further chapter and confirms that upon opening the township register on land so owned, the developer becomes owner of the newly established erven in the township. If an HOA comes into existence with a constitution requiring payment of levies by owners of erven for a clearance certificate to pass transfer, then the developer is an owner for that purpose.
SUMMARY OF FACTS
Prospect SA Investments 42 (Pty) Ltd ("the Developer") was the owner of a large tract of land in KwaZulu-Natal. After obtaining a certificate of registered title (‘CRT’) in respect of a portion of the land, it proceeded to establish a township thereon. In November 2005, the Department of Local Government and Traditional Affairs approved the layout of the proposed township subject to certain conditions. One of these required the lodgment of a general plan of the proposed township with the Surveyor General (‘SG’) for approval. Thereafter the approved general plan, together with the relevant title deed, had to be lodged and registered in the local deeds office for registration of the township. (These conditions are in accordance with the provisions of the Deeds Registries Act 47 of 1937 (‘the DRA’) relating to the opening of a township register on a portion of a property.)
The conditions were duly attended to and the title deed was endorsed to reflect that the relevant land was now laid out in numbered erven in accordance with the general plan (‘the endorsement’).
Further relevant conditions for establishment of the township were that:
• Prior to the transfer of the erven in the township, 3 erven (that would comprise common property in the development) had to be transferred to a home owners association and each owner of a property had to become a member thereof. (The Lanarco Home Owner Association (‘the HOA’) was duly established as a result.)
The conduct rules of the HOA specifically provided that “owner” referred to “the registered owner of any erf or sectional title unit within the estate” and that “owners are members of the association by virtue of ownership of a property”.
A dispute arose with regard to the payment of levies for the issuing of a clearance certificate for the transfer of the common property erven to the HOA. The Developer approached the court and sought a declaratory order that it was not a member of the HOA and consequently not liable for the payment of levies. It also sought an order compelling the HOA to furnish the necessary clearance certificates. The Developer’s arguments denying liability were based on the allegations that:-
(i) the individual erven did not yet exist for the purposes of membership of the HOA;
(ii) it was the registered owner of the whole of the remainder of the township and not each individual erf;
(iii) it did not automatically become a member of the HOA as the articles of the HOA required a written application; and
(iv) there was no contractual nexus between it and the HOA requiring it to be a member of the HOA.
The HOA sought a declaratory order that the Developer was liable for the payment of all levies imposed in respect of each property it owned in the development during the period it was the owner thereof. The HOA contended that in terms of (i) the conditions of the establishment of the township as well as (ii) the HOA’s conduct rules, the Developer was a member and as such liable for the payment of levies in respect of the properties that it owned.
Relevant provisions of the DRA:
• Section 102 of the Act defines “erf” to be “every piece of land registered as an erf, lot, or stand in a Deeds Registry, and includes every defined portion, not intended to be a public place, of a piece of land laid out as a township, whether or not it has been formally recognised, approved or proclaimed as such”.
• “Owner”, in relation to immovable property, is “the person registered as the owner or holder thereof”.
Re Developer’s arguments (i) and (ii):
• In terms of the DRA, a township cannot be created on a portion of land before a certificate of registered title (CRT) in respect of the portion of land has been issued and a general plan, depicting the various erven has been registered in the Deeds Registry. A developer can only alienate individual erven once this has been done.
• In the present matter, when the CRT and general plan were registered, the relevant erven (as depicted on the registered general plan) substituted the land that was previously held by virtue of the CRT. The Developer was therefore no longer the owner of the farmland but of various erven in a proclaimed township. The conditions of establishment of a township further compelled the Developer to deal with the erven in accordance with the registered general plan.
• It followed that if one had regard to the definitions of “erf” and “registered” as outlined, the individual erven existed and came into existence upon registration of the general plan. The Developer’s contentions that the individual erven did not yet exist was therefore without merit.
Re Developer’s arguments (iii) and (iv):
• The Developer submitted, correctly, that the original title deed as well as the CRT contained no provisions which required it to become a member of the HOA. However the endorsement on the CRT confirmed that the erven formed part of a registered general plan. As such, the conditions relating to the approval of the township were significant. These required (a) transfer of the common property to the HOA and (b) that each property owner become a member of the HOA. These had to be fulfilled prior to the transfer of any of the remaining erven or lots. As such, clearly, the Developer as owner of all the remaining erven, was obliged, upon transfer of the common property, to become a member of the HOA.
• It was further contended on behalf of the Developer that the aforesaid conditions, at most, imposed obligations upon owners to become members of the HOA, but did not automatically have that effect – more so since the articles of association required written application for membership of the HOA.
• The latter argument had to fail. The conditions of establishment (approval) of the township were imposed by the Minister in terms of the relevant KwaZulu-Natal Town Planning Ordinance. The Ordinance has the force of law in the province and the Developer, notwithstanding the terms of the HOA’s articles of association, automatically, as owner, became a member of the HOA. (In fact, without becoming such a member, the Developer was prohibited from establishing the township.)
• The provisions in the articles of association that membership be open “to all qualified and interested parties who shall be individuals with professional or other interests in the operational areas of the association” may apply to non-property owners who wish to be associated with the HOA. The Developer and all further property owners within the development were compelled, by virtue of the conditions of establishment of the township, to be members of the HOA.
• The nexus between the Developer and HOA was therefore created and established by the conditions of establishment (approval) of the township. The conduct rules clearly defined the members of the HOA “by virtue of the ownership of a property”.
The court accordingly concluded that the Developer was a member of the HOA and consequently liable to the HOA for the payment of levies in respect of each immovable property owned by it within the boundaries of the development.
Source: Smith Tabata Buchanan Boyes Attorneys
SERVITUDES OF RIGHT OF WAY
“The long and winding road
That leads to your door
Will never disappear…”
– John Lennon and Paul McCartney
MORE OFTEN than not, land owners do not understand the nature and consequence of servitudes in respect of their land. This is largely due to the fact that South African property law hinges on old Roman-Dutch law, which is the foundation of our common law.
In a recent case a full bench of the Western Cape High Court held that the Roman-Dutch principle of blokland is still very much alive in our law today. A company in Stellenbosch subdivided its land into two portions. The western landlocked portion was transferred to Fleurbaix Farm (Pty) Ltd and the eastern portion, accessible by public road, was transferred to Van Rhyn. By operation of law, and without having being required to be registered in the Deeds Registry, Fleurbaix had an automatic right of way servitude over Van Rhyn’s property in order to access the public road. Later, Van Rhyn made improvements and altered the landscaping of his property. In doing so Van Rhyn unilaterally closed Fleurbaix’s access to the right of way and replaced it with a right of way running across the northern section of his property. Fleurbaix was not happy with this new arrangement and approached the court.
Judge Binns-Ward pointed out that the two properties were what were known in Roman-Dutch Law as blokland. The general rule with regard to blokland is that the landlocked property is automatically entitled to a right of way servitude over the adjoining subdivision in order to access a public road. In terms of the principle of blokland Fleurbaix was entitled to choose the path of the servitude over Van Rhyn’s land. The caveat to this rule is that Van Rhyn can unilaterally alter the path of the right of way, provided that this does not amount to unreasonable conduct and does not prejudice Fleurbaix’s common law right to access the public road through Van Rhyn’s property.
Van Rhyn did not act unreasonably by altering the path of Fleurbaix’s right of way as in doing so no prejudice was created.
Van Rhyn & Others NNO v. Fleurbaix Farm (Pty) Ltd 2013 (5) SA 521
Source: LawLetter: MacRobert Attorneys
ZONING: MULTIPLE USE AND VALUATIONS
“Houses are built to live in and not to look on;
therefore let use be preferred before uniformity,
except where both may be had.”
– Francis Bacon (1561 - 1626)
SECTION 2 of the Local Government: Municipal Rates Act of 2004, allows a municipality to levy rates on property within its municipal area. Section 8 provides that it may levy different rates for different categories of rateable property according to the use of the property, its permitted use or its geographical area. Among the categories are “residential properties”, “business and commercial properties” and “properties used for multiple purposes”. Those used for business and commercial purposes attract a higher rate than those categorised for residential purposes.
In this case the property was a ten-storey building known as Park Mews. It comprised a ground floor used for business purposes and the remaining nine floors for residential purposes. Although Park Mews was zoned as a property for multiple purposes and one of its permitted uses was to have shops and offices on the ground floor, the municipal council had determined the rates payable by applying the higher business rate to the overall value of the building.
The owner filed an objection to the valuation roll, contending that there ought to have been an apportionment of the market value between the “business” and the “residential” categories. The municipal valuer rejected the objection, stating “Property category is correct. Multiple purpose.” The owner then appealed under the Act to the Valuation Appeal Board of the City of Johannesburg.
Arguing that it had elected to levy rates according to the permitted uses of properties as zoned and not on their actual use, the City applied to the High Court to review this decision.
When unsuccessful in its review, the City appealed to the Supreme Court of Appeal. It failed in that forum also where the proper approach was summed up by Judge Eric Leach:
“The inevitable conclusion is that where a property is being used for multiple permitted purposes, it is necessary for the municipal valuer compiling the valuation roll to determine and record those uses and to apportion the market value of the property between them.”
City of Johannesburg Metropolitan Municipality v. Chairman
of the Valuation Appeal Board for the City of Johannesburg and
Another  2 All SA 363 (SCA).
Source: LawLetter: MacRobert Attorneys
THE SPLUMA SPLASH!
"The times they are a changin" – Bob Dylan
If ever the South African spatial planning landscape was in turmoil, 2014 tops the list. Peter Dacomb shares some thoughts on this matter.
Following the "SPLUMA Splash", when the long awaited and much debated Spatial Planning and Land Use Management Act was published in the Government Gazette in August, 2013, expectations soared – the new planning dispensation was nigh!
SPLUMA would be enacted incrementally, by further notices to be published in the Government Gazette. After much debate and pleading with the Minister of Rural Development and Land Reform, it was made known that, as a first target date, 1 July 2014 was identified to enact, amongst others, Section 60 of SPLUMA (to unlock various pending DFA matters) – For reasons unknown, the notice on Section 60 did not appear.
The Draft Regulations to SPLUMA were published in the Government Gazette on 4 July 2014. The public has been offered until 4 September 2014 to comment on the draft.
Against the above background the Honourable Minister's indication that the remaining sections of SPLUMA are likely to be published by early September 2014 appears somewhat unlikely.
At the Provincial Sphere of Government, a very different set of complications is bubbling under. Starting in the Western Cape, the mood suggests that provincial legislation may be no more than a token gesture, leaving independent municipalities to bring about spatial planning bylaws in site specific terms. Then on to KZN where the Planning and Development Act remains in a state of flux. In Gauteng, provincial influence is rumoured to remain a strong component of the spatial planning debate. It appears that a certain level of inconsistency is the only common denominator, with other provinces trailing in the distance.
All along, the "old order" Ordinances and Removal of Restrictions Acts and the Physical Planning Act and similar instruments, remain in use, trudging along patiently, yet bearing the yoke of all the ills associated with the previous political dispensation.
For the uninformed, there are other interesting laws in the spatial planning arena, such as the Provision of Land and Assistance Act, 126 of 1993 (the successor to the Provision of Certain Land for Settlement Act), administered by the Department of Rural Development and Land Reform, the champions of SPLUMA. This relatively unknown act, all of the 7 pages thereof, provides a vehicle to subdivide and develop land and allocate land use rights without necessarily giving notice to any interested party, by setting aside Act 70 of 1970 and by not having to comply with any law governing township establishment! The aforesaid act was amended by the:
• Development Facilitation Act, 1995;
• Provision of Certain Land for Settlement Amendment Act, 1998; and
• Land Affairs General Amendment Act, 2000
Strange but true!
Bob Dylan, bless his soul, was on the button – times are indeed a changin' (or are they?)
SAACPP/4 July 2014
LAMENTING THE ABSENCE OF SECTION 60: SPLUMA
Following the recent plea by the South African Property Owners Association (SAPOA) for the Minister of Rural Development and Land Reform, Mr Gugile Nkwinti, to facilitate a speedy conclusion to the bringing into effect of the provisions of Section 60 of the Spatial Planning and Land Use Management Act, 2013 (SPLUMA), Peter Dacomb confirms that the Association of Consulting Professional Planners has also approached the Honourable Minister in solidarity with SAPOA.
According to the SAPOA submissions, an estimated R12 Billion in property development value is being frustrated by the impasse surrounding the coming into effect of Section 60 of SPLUMA.
In the Provinces of Gauteng, Mpumalanga, North West, Limpopo, Kwazulu Natal, Eastern Cape and Northern Cape, various land development areas were approved by the then Provincial Development Tribunals under the provisions of the Development Facilitation Act, 1995. Because of the Constitutional Judgements which rendered certain chapters of the DFA unconstitutional, many of the decisions of the various provincial tribunals were not brought into effect and remained in abeyance.
The much lauded and awaited SPLUMA legislation came into effect in August 2013 but, curiously, incorporated a provision under Section 61 which reads as follows:
"This Act is called the Spatial Planning and Land Use Management Act, 2013 and comes into operation on a date fixed by the President by proclamation in the Gazette.
The President may set different dates for different provisions of this Act to come into operation".
To date, no such further proclamations have occurred.
The bone of contention on the part of SAPOA (and supported by the SAACPP) pertains to Section 60 which, inter alia, provides for the following:
"All applications, appeals or other matters pending before a tribunal established in terms of Section 15 of the Development Facilitation Act, 1995 (Act 67 of 1995), at the commencement of this Act, that have not been decided or otherwise disposed of, must be continued and disposed of in terms of this Act.
A reference to a tribunal in terms of Section 15 of the Development Facilitation Act, 1995 must, for the purposes of deciding or otherwise disposing of any application, appeal or other matters pending before a tribunal at the commencement of this Act, must be construed as a reference to a local or metropolitan municipality".
In other words, the R12 Billion property development initiatives currently treading water as a result of prior decisions of the various provincial tribunals may be "unlocked" by a simple proclamation in the Government Gazette as contemplated in Section 61 of SPLUMA. It is understood that the resource capacity of municipalities to deal with the added obligations emanating from Section 60 of SPLUMA were foremost in the minds of the officials responsible for this matter (Rural Development and Land Reform).
It would serve no practical purpose to foist the aforesaid responsibilities on various municipalities throughout the country without creating sufficient capacity and knowledge to deal with such matters. Whilst municipalities at a metropolitan level may be expected to have sufficient capacity, knowledge and experience to deal with these matters without experiencing undo difficulties, the same cannot be said of smaller municipalities elsewhere.
To this end, the Department of Rural Development and Land Reform embarked upon a campaign to inform municipalities and to assist in creating the mechanisms to receive and process applications contemplated in Section 60 of SPLUMA. A type of "manual" was developed by the National Department and made available to municipalities to deal with practical and technical matters such as:
- the required resolutions to be passed by the various municipal councils in order to bring the systems into place to deal with the provisions of Section 60 of SPLUMA;
- practical arrangements to identify and delegate authority to certain officials or committees within the municipalities to deal with matters previously embarked upon in terms of the Development Facilitation Act; and
- to anticipate the practical challenges which may be faced by municipal officials in having to deal with multi-layered decisions of prior tribunals, also on issues which are typically not decided by municipalities. These may extend to include changes to general plans, extensions of boundaries of townships, the setting aside of the authority of certain legislation such as Act 70 of 1970, cost orders and the like.
Apart from the recent election and the "go slow" generally associated with the period immediately prior to the election day, there appear to be no specific obstacles in the way of the Honourable Minister Nkwinti to facilitate a speedy publication of the notice in the Government Gazette as explained herein.
In the submissions to the Department of Rural Development of Land Reform, SAPOA and the Association lamented the implications of holding the various development initiatives in abeyance. The high unemployment rate which plagues the country, the less than satisfactory economic growth and the general cost of financing land development projects combine to suggest that, in the absence of unlocking the problem associated with Section 60 of SPLUMA, there may be disastrous consequences for this important sector of the economy.
The SAACPP is under no illusion that, once the provisions of Section 60 of SPLUMA come into practical effect, it will be no "easy ride" to bring the various pending matters to fruition. The property development process remains complicated and challenging and a lack of experience and knowledge within certain municipal jurisdictions will undoubtedly result in various frustrations. The consulting professional planning fraternity will inevitably be called upon to assist in facilitating these matters on behalf of property developers throughout the country. All concerned with therefore be well advised to steel themselves for what lies ahead. As the saying goes: "It is time to throw a Planner in the works".
Post Script: Breaking news …. Breaking news …. Breaking news!!!
The Minister of Rural Development and Land Reform responded on 23 May 2014 and confirmed, inter alia, that, on 1 July 2014, Sections 1 to 32 and 53 to 61 of SPLUMA will be enacted by way of a Government Gazette Notice. The balance of the Act is proposed to come into effect in September 2014.
SAACPP/23 May 2014
MISCONDUCT AND WRONGFUL ACTS
SACPLAN is the proverbial "watchdog" of the profession and, by law, is required to investigate allegations of professional misconduct raised against registered persons as defined in the Planning Professions Act, 2002 (Act 36 of 2002). Also, SACPLAN is obliged to, of own volition, investigate such matters if there is a reasonable suspicion that professional misconduct has occurred or a wrongful act has been committed which may involve a registered person. This applies to all the categories of registration contemplated in the Act i.e.:
Peter Dacomb reports that a growing number of complaints of alleged misconduct and matters associated therewith has been brought to the attention of SACPLAN in recent times. Whilst this is partly understandable given the fast growing numbers of registered persons under the Act, it is also somewhat concerning for the profession in general. Understandably, the majority of the complaints filed with SACPLAN involve consulting professional planners in private practice and members of the Association of Consulting Professional Planners (SAACPP).
In the majority of cases, a dispute between an instructing client and the consulting planner results in a complaint being lodged with SACPLAN alleging professional misconduct. In other cases, complaints are received from non-clients (say homeowners associations or objectors to a planning application), who feel aggrieved by the manner in which a planner has conducted himself/herself. More recently, the Courts have, via the Department of Justice, referred matters to SACPLAN to investigate, alluding to possible misrepresentation of facts in a dispute. Important lessons may be learnt from the complaints that are under investigation by SACPLAN and may assist consulting planners and also, to a lesser extent, planners employed in the various spheres of government (and elsewhere) to ensure that their conduct remains beyond reproach.
The following broad categories of complaints have been received by SACPLAN for further investigation:
- A breach of confidentiality at the expense of the instructing client
- Non-disclosure of a potential clash of interest by the planner considered to be prejudicial to the interests of the instructing client
- Failure to timeously attend to an instruction (i.e. failure to submit an application/appeal or similar by a set date and allegations of general tardiness)
- Failure of a planner to fulfil financial obligations by neglecting to settle the invoice of a subcontracted consultant
- A misrepresentation of facts to the potential detriment of affected parties
- Planners in municipal employ doing private consulting work and possibly abusing their positions in doing so
As appears from the various sworn affidavits filed with SACPLAN as part of the complaints of alleged misconduct, a number of important lessons emerge which should be taken to heart by all registered planners faced by similar circumstances. These include:
Build a proper paper trial
The keeping of proper records and diligent recording (by correspondence) of instructions, amendments to instructions, appropriate dates and a correct interpretation of the understanding between the parties (client/planner) remain extremely important. Various misunderstandings, based on inadequate records/written explanations appear to have been the cause of a large number of complaints against registered planners.
Tangiblize the intangible
The nature and extent of the professional brief to the planner requires to be carefully described and reduced to writing in understandable terms, leaving little if any latitude with regard to the interpretation thereof. The responsibility of the planner, as opposed to the responsibility of other participating professional consultants (conveyancers, land surveyors, project managers, architects, engineers, market analysts, geotechnical consultants, environmental impact assessment practitioners, etc) must be properly distinguished. This often gives rise to confusion/misunderstanding on the part of the client. Disputes often focus on incorrect assumptions with regard to where the responsibilities of the instructed planner start and stop. Proper written communication and record-keeping and, if possible, written agreements to such effect remain extremely important.
A large number of the complaints on record with SACPLAN are clearly of a vindictive nature and present as a last gasp attempt by the complainant to "get at"' the consulting planner for whatever reason. Where members of the public or other interest groups raise objections to new development proposals and feel aggrieved by the result of the final decision by the relevant authority, there is often an attempt at retribution. The planner, acting for the developer, becomes the focus of the complainant's attention. In most such instances, the matter is expeditiously dismissed. However, in other matters where prima facie evidence suggests that there may have been failure on the part of the planner to properly give effect to his/her obligations, SACPLAN is obligated to take the matter further and to conduct a proper investigation which may include a disciplinary hearing.
Pay what is due
It often occurs that a planner co-ordinates the involvement of a "sub-contractor" such as land surveyors, traffic engineers and the like. In some instances the client requires of the planner to manage payment to the sub-contracted parties and payment is often made to the planner who is expected to settle the invoices of the sub-contracted parties. Tardiness to effect prompt payment after receiving it from the client often results in complaints by the sub-contractor. A planner's fiduciary responsibility must not be compromised by failure in this regard. It brings the profession into disrepute.
A potential clash of interest, in taking a brief from a client, may later result in a dispute and allegations of misconduct. The Rules of SACPLAN, including the Code of Conduct oblige all planners to declare any such interest upfront (put it in writing and let the client decide).
Don't serve two masters
A number of complaints relate to planners in municipalities doing private work. The allegations suggest that any such planner may abuse the privilege of being an employee of the decision maker. The complainants also suggest that, even where work is done in other areas (not in the jurisdiction of the municipality where the planner is employed), it remains untenable for a government employee, paid via tax-money, to use his/her time (already paid for) to compete with planners in private practice. This cannot be justified in any language.
These are some of the matters which require to be considered by planners to remind all concerned of what professional responsibility is all about.
SAACPP/15 April 2014
CONFLICTS OF INTEREST
Principles of Confidentiality
Once a planning consultant is briefed by a client to attend to a matter in a specific area, it often occurs that the client considers that the consultant is somehow precluded from taking instructions from other clients for similar purposes in the same general area. Peter Dacomb provides a summary of an interesting court judgment on this topic.
The judgement referred to below sheds some light on a potential conflict of interest, albeit with regard to an attorney in dispute with a client. Important parallels may be drawn as far as the planning profession is concerned and the judgment may serve as an example to planners who may be confronted by similar circumstances.
Practising professional planners generally enjoy convenient access to vast bodies of information, given the technological era we find ourselves in. Inevitably, conflict and often confusion arise between confidentiality on the one hand, and transparency, access and disclosure on the other. Personal rights are often weighed against public interest – the latter being the topic of much debate in disputes where the members of the public choose to criticize the approach followed by a planner. The public is not always necessarily interested in the "public interest".
The High Court recently ruled on whether there was a conflict of interest which entitled a former client to enforce, by way of an interdict, a duty of confidentiality against that client’s former consultant.
The law dealing with fiduciary relationships gives rise to an obligation on the consultant to respect the confidentiality of information received in confidence. Also, such law obligates the consultant to refrain from using or disclosing such information otherwise than as permitted by law or by his/her appointment contract.
To procure an interdict preventing a consultant representing a new client at the potential detriment of the interests of the former client, the former client would need to prove that:
• confidential information was imparted or received in confidence as a result of the client/consultant relationship and the information remains confidential;
• it is relevant to the matter at hand (say a dispute regarding use of land); and
• the interests of the present client are adverse to those of the former client.
There is no ongoing regulated relationship or duty of loyalty owed by a consultant to a former client. The duty to a former client is limited to respecting confidential information acquired during the course of the relationship with the client. Where the former client fails to establish any of the aforesaid requirements, an application for an interdict, preventing a consultant representing a different client, must fail.
Wishart & Others v. Blieden N.O. & Others 2013 (6) SA 59 (KZP).
With appreciation to MacRobert Incorporated.
SAACPP/18 March 2014
ZONING RIGHTS VS HOME OWNER'S ASSOCIATION RULES
A recent High Court judgment addressed the knotty problem of an HOA's powers to bar an owner from running a home-based business.
The facts of the case were that a homeowner in an estate who was running a hair salon from her house breached a written undertaking to the HOA to cease business, and that the HOA then applied to the High Court to interdict her from continuing.
She was bound (via both her purchase agreement and the title deeds) by the HOA's constitution and conduct rules – which prohibited the use of homes in the estate for anything other than residential purposes, except by special resolution, she argued, however, that her home business was permitted by the local zoning regulations – which did indeed permit certain small-scale non-residential activities – and that the HOA had no right to override these zoning scheme provisions by prohibiting all non-residential use.
The interdict was, though, eventually granted by a "full bench" of the High Court, which held that "… there is nothing contained in our law which prevents a property owner from agreeing to a limitation of its rights ….", and that the individual home owners in this estate had, by agreement, forfeited their right to use their properties for anything but residential purposes.
Moreover, the Court said, the HOA had not purported to change the municipal zoning scheme and was "well within its rights to seek to preserve the residential character of the development. The home owner was thus ordered to stop running her business from home and, to make things worse, was also ordered to pay the HOA's legal costs.
Source: Bisset Boehmke Mc Blain Attorneys