Body corporate or HOA in South Africa: key differences?

Authored by the expert who managed and guided the team behind the South Africa Property Pack

Everything you need to know before buying real estate is included in our South Africa Property Pack

What exactly is a body corporate in South Africa and how is it legally set up?

A body corporate is automatically created when the first unit in a sectional title scheme transfers from the developer to a buyer.

The legal entity comes into existence through the opening of the Sectional Title Register at the Deeds Office, requiring no separate registration process. This automatic formation occurs under the Sectional Titles Act and the Sectional Titles Schemes Management Act (STSMA).

The body corporate operates as a juristic person with the legal capacity to own property, enter contracts, sue, and be sued. All unit owners become members automatically upon purchase, with their participation quota determining their voting rights and levy obligations.

As of September 2025, the STSMA requires all body corporates to comply with Prescribed Management and Conduct Rules, which can be amended by special resolution requiring 75% of voting rights to support changes.

What exactly is a homeowners' association in South Africa and how is it legally set up?

A homeowners' association in South Africa typically establishes as either a non-profit company under the Companies Act or as a common law association with a signed constitution.

The HOA formation process requires drafting a Memorandum of Incorporation (MOI) or constitution, registering with the Companies and Intellectual Property Commission (CIPC) if choosing the non-profit company route, and ensuring all property owners in the development become mandatory members through title deed conditions.

Unlike body corporates, HOA establishment requires deliberate action by developers or existing property owners. The HOA governs subdivisions of freehold properties where owners hold individual title to their homes and plots.

Membership becomes mandatory when purchasing property in an HOA-governed development, as the obligations bind through registered title deed conditions that cannot be avoided.

Who enforces the rules in a body corporate and who does so in a homeowners' association?

Body corporate rules are enforced by elected trustees who derive their authority from the STSMA and the collective body corporate.

Trustees have statutory powers to enforce Conduct Rules covering issues like pet policies, parking regulations, noise restrictions, and architectural guidelines. The broader ownership group supports enforcement through general meetings where rule violations and penalties are discussed and approved.

HOA rule enforcement falls to an elected board of directors operating under the Companies Act for non-profit companies or under common law for association-based HOAs.

The HOA board enforces rules outlined in the Memorandum of Incorporation or Constitution, with authority stemming from company law rather than specialized property legislation. Board members can impose fines, restrict access to amenities, and initiate legal action for serious violations.

How are levies calculated in a body corporate compared to an HOA, and what does each levy cover?

Body corporate levies calculate based on participation quotas, typically reflecting each unit's size relative to the total scheme area.

A 100-square-meter apartment in a 2,000-square-meter complex pays 5% of total levies. These levies cover comprehensive building maintenance, structural repairs, exterior painting, roof maintenance, common area upkeep, building insurance, and administrative costs.

HOA levies are determined by the association's Constitution or MOI, often using equal contributions per property or calculations based on erf size or property value.

HOA levies typically cover road maintenance, garden upkeep, security services, gate maintenance, and communal facility management. Individual homeowners remain responsible for their own building insurance, municipal rates, and home maintenance.

As of September 2025, body corporate levies in major South African cities average R800-R2,500 per month for apartments, while HOA fees range from R500-R1,800 monthly for estate homes.

What types of properties usually fall under a body corporate and what types under an HOA?

Body corporates govern sectional title properties where owners hold both individual units and undivided shares of common property.

These include apartment complexes, townhouse developments, office parks converted to residential use, mixed-use buildings with commercial and residential sections, and retirement villages with shared facilities. Sectional title schemes require shared walls, common areas, or integrated building systems.

HOAs manage developments of freestanding homes where owners hold individual title to their complete property including the land.

This covers security estates with individual homes, cluster housing developments, golf course communities, lifestyle estates, and suburban subdivisions with shared amenities like clubhouses or parks. Each property owner holds full freehold title to their erf and dwelling.

It's something we develop in our South Africa property pack.

How are decisions made in a body corporate versus an HOA, and how much voting power does each owner have?

Body corporate decisions require general meetings where each owner's voting power equals their participation quota percentage.

Decision Type	Body Corporate Requirement	HOA Requirement
Ordinary Resolutions	Simple majority of votes present	Simple majority as per MOI
Special Resolutions	75% of all voting rights	75% or as specified in MOI
Rule Changes	Special resolution (75%)	Special resolution or as per constitution
Levy Increases	Special resolution for increases >30%	As specified in HOA rules
Major Expenditure	Special resolution for large projects	Board approval or member vote per MOI
Trustee Elections	Simple majority vote	Director elections per Companies Act
Quorum Requirements	25% of voting rights	As specified in MOI (often 30-50%)

What laws and acts govern a body corporate and what laws apply to a homeowners' association?

Body corporates operate under the Sectional Titles Act 95 of 1986 and the Sectional Titles Schemes Management Act 8 of 2011.

These acts provide comprehensive statutory frameworks covering establishment, governance, financial management, dispute resolution, and dissolution procedures. The STSMA introduced standardized management and conduct rules, mandatory trustee qualifications, and enhanced dispute resolution mechanisms through the Community Schemes Ombud Service.

HOAs fall under the Companies Act 71 of 2008 when structured as non-profit companies, or common law when established as associations.

The Companies Act governs registration, director duties, financial reporting, and dissolution procedures for company-structured HOAs. Association-based HOAs rely on common law principles of contract and association, with governance determined by their constitutions and local municipal bylaws.

Who is responsible for maintaining common property in a body corporate and who in an HOA?

The body corporate holds exclusive responsibility for maintaining all common property including building exteriors, roofs, gardens, swimming pools, elevators, parking areas, and shared infrastructure.

This comprehensive maintenance obligation extends to structural elements, waterproofing, electrical systems in common areas, plumbing infrastructure, and shared amenities. Individual owners maintain only the interior of their units, with the body corporate handling everything from the unit boundary outward.

HOAs maintain communal infrastructure such as roads, entrance gates, security systems, clubhouses, parks, and shared recreational facilities.

Individual homeowners remain responsible for maintaining their homes, gardens, driveways, and any structures on their individual erven. The HOA's maintenance obligations typically focus on preserving property values through aesthetic standards and infrastructure upkeep rather than direct building maintenance.

What rights and responsibilities does an individual owner have in a body corporate versus in an HOA?

Body corporate owners hold sectional title to their units plus undivided shares in common property, giving them usage rights to all communal areas and facilities.

1. Right to attend and vote at general meetings according to participation quota
2. Right to elect trustees and stand for trustee positions
3. Right to access financial records and body corporate documentation
4. Responsibility to pay levies and special assessments on time
5. Obligation to maintain unit interiors and comply with conduct rules
6. Responsibility to obtain body corporate approval for alterations affecting common property
7. Right to challenge trustee decisions and request special general meetings

HOA members own their properties outright while accepting membership obligations that bind them to community standards and financial contributions.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in South Africa versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

How easy is it to sell or rent out a unit under a body corporate compared to a home in an HOA?

Body corporate units require levy clearance certificates showing all levies are current before transfer can complete, with the body corporate having first right of refusal in some schemes.

Rental restrictions vary by scheme, with some body corporates prohibiting short-term rentals or requiring lease approval. The sectional title market in major cities like Cape Town and Johannesburg remains liquid, with apartments typically selling within 3-6 months in good locations.

HOA properties may require written consent from the association before sale or transfer, particularly in exclusive estates.

Rental activities often face stricter HOA controls, especially regarding short-term letting, guest policies, and tenant screening. However, freehold properties generally offer more flexibility for owners and typically maintain stronger resale values in established areas.

It's something we develop in our South Africa property pack.

What kinds of disputes typically arise in a body corporate versus an HOA, and how are they resolved?

Body corporate disputes commonly involve unpaid levies, pet policy violations, parking space conflicts, noise complaints, and unauthorized alterations to units or common property.

Resolution occurs through trustee intervention, special general meetings, or referral to the Community Schemes Ombud Service (CSOS), which provides free mediation and adjudication services specifically for sectional title disputes. The CSOS has authority to make binding decisions on levy disputes, rule violations, and governance issues.

HOA disputes typically center on architectural guidelines, amenity usage restrictions, levy collection, parking violations, and neighbor conflicts over property boundaries or maintenance standards.

Resolution follows company law procedures, starting with board intervention, progressing to member meetings, and potentially requiring costly private mediation or High Court litigation. HOAs lack access to the specialized CSOS dispute resolution service, making conflict resolution more expensive and time-consuming.

What are the long-term financial implications of buying into a body corporate compared to an HOA in South Africa?

Body corporate ownership involves higher monthly levies but provides comprehensive cost coverage including building insurance, structural maintenance, and major repairs through reserve funds.

Cost Category	Body Corporate	HOA
Monthly Levies	R800-R2,500 (includes insurance)	R500-R1,800 (excludes home insurance)
Building Insurance	Included in levy	Owner responsibility (R200-R800/month)
Major Repairs	Covered by reserve fund/special levy	Individual owner responsibility
Roof Replacement	Body corporate responsibility	R50,000-R150,000 owner cost
Exterior Maintenance	Included in levy	R5,000-R20,000 annually
Special Assessments	Occasional for major projects	Rare but potentially large
Total Annual Cost	R10,000-R30,000	R8,000-R35,000 (including own maintenance)

It's something we develop in our South Africa property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Who is the author of this content?

THE AFRICANVESTOR

A team specialized in real estate investing in African countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in South Africa. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At The AfricanVestor, we explore the South African real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Cape Town, Johannesburg, and Durban. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Sources

1. How to Establish a Body Corporate - Gawié le Roux Attorneys
2. Creating a Home Owners Association - Paddocks
3. Understanding Homeowners Associations - MBLH
4. Body Corporate Guide - Gradion
5. Nature and Scope of Body Corporate Rules - Paddocks
6. Guide to Sectional Title in South Africa - Wits University
7. HOAs vs Sectional Title Schemes - Paddocks
8. Body Corporates Guide for Landlords - Private Property