HOA PENALTY FOR NOT BUILDING IN TIME: IS TAKING A HARD LINE UNFAIR?
De Wet N.O. and Others v Water’s Edge Home Association; De Kock N.O. and Another v Water’s Edge Home Association (A110/2022) [2022] ZAWCHC 155 (24 August 2022)
One often assumes that very harsh penalties are unfair and that a court will agree. There may be instances where this will ring true, but under the Conventional Penalties Act there is more at play than just one side’s perception of fairness. This judgment is a case in point, relating to some owners in an upmarket estate who failed to comply with the building timeline provisions of the HOA constitution. Unsuccessful in their attempt to set aside the trustee committee’s decision on procedural grounds, they next argued for reduction of the ‘exorbitant’ penalty. The Act however requires that regard must be had to the rightful interests of the creditor, the HOA in this instance, in imposing the levies and found here that no reduction was warranted. The summary below explains why.
The Judgment
Summary of the Judgment
LEASE RENEWAL: LANDLORD’S CONDUCT SPEAKS VOLUMES
Bartie N.O. and Others v Fraaikem Pharmacy (Pty) Ltd (A236/2021) [2022] ZAWCHC 157 (17 August 2022)
Against the backdrop of a messy lease renewal, the Court here found that the lease had in fact been renewed, despite the absence of a signed agreement and the tenant’s late notification of its intention to exercise an option to renew. This because the conduct of the landlord was such as to imply that the agreement was in place and that it waived non-compliance with the notice period regarding the option to renew.
For landlords and tenants the judgment is a valuable reminder that failing conscientious paperwork, uncertainty arises and your conduct may, objectively viewed, signify that you have agreed to contract terms, despite a subjective intention to the contrary.
