TOWNSHIP DEVELOPERS LIABILITY FOR PAYMENT OF LEVIES AFTER OPENING OF A TOWNSHIP REGISTER
 

In the Judgement of Sable Hills Waterfront Estate Home Owner's Association NPC v Sable Hills Waterfront Estate CC (39635/2013) ZAGPPHC 831 (10 December 2015) (case attached for ease of reference) it was held that the developer is liable for levies on any unsold erven, subsequent to the opening of the Township Register.  However, the liability is first and foremost determined by the Home Owners Associations governing documentation (MOI and Rules)
 
Thus, where the liability is linked to ownership of a property or erf in a township, it will include the developer who becomes owner of the unsold erven in the township, unless there are specific provisions to the contrary in the MOI and Rules.
 
Note that the court indicated that the present matter should be distinguished from previous judgments (Rynfield Township Ltd v Benoni Town Council and another 1950 (4) SA 717 (T) and Florida Hills Township Ltd v Roodepoort Maraisburg Town Council 1961 (2) SA 386 (T)) where the court concluded that where township property is sold as individual erven, the remainder of the property is reduced from time to time by the sale of individual erven, but that the unit of the remainder retains its own identity and continues to appear as the remainder in the deeds registry.  It accordingly concluded that it was that remainder which had to be entered on the roll as a unit in the ownership of the township owner.  These had to do with the relationship between a local authority and a township developer and with the valuation of unsold lots in a township.  The legal nature of the relationship between the parties in the referred to matters was one that flowed ex lege and the dispute centred on the method used to value such erven.  The context of the present dispute was certainly distinguishable.
 
Conclusion
 
Caveat emptor (Beware the Purchaser).  Prospective owners buying property, subject to becoming a member of a Home Owners Association must be warned to peruse the MOI and Rules of the Association to ascertain who will be held liable for levies, as this could be extremely costly when the developer has exonerated himself from levies on any unsold erven.

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