When it is lawful for a HOA to restrict an owner’s rights to water and electricity?

This issue was considered in Van Rooyen v Hillandale Homeowners Association.

In an application based on the mandament van spolie, the main issue to be decided was whether the respondent’s conduct in limiting / refusing applicant to purchase pre-paid water and electricity vouchers was lawful.

The applicant leased premises situated within an estate in which the respondent was the homeowners association. An interim order had been granted in the applicant’s favour, directing the respondent to restore the applicant’s access to its internet site to be able to purchase prepaid water and electricity for use at the premises. The applicant sought confirmation of that order.

Held that the rules of the estate were binding on all occupiers. In terms of the rules, no electricity would be provided or sold to any occupier or owner of any erf in respect of which levy payments were outstanding for a period of 60 days or longer, until such time as all outstanding levy amounts were paid in full. That provision led to the respondent’s restricting the applicant’s water and electricity supply. The main issue that had to be determined was whether the respondent’s conduct in limiting / refusing applicant to purchase pre-paid vouchers was lawful.

The respondents disputed the applicant’s locus standi as the applicant was the lessee and not the property owner in respect of the premises occupied by him. However, the Court found that rules of the respondent relating to the provision of water and electricity were not only applicable to an owner with whom a contract had been entered into but was also applicable to occupiers who were not owners. The applicant had a direct interest in the matter and could therefore approach the Court for relief.

The next question was whether the applicant’s rights were capable of protection by a spoliation order. The respondent argued that the applicant had a personal right against the respondent to sell him water and electricity subject to the conclusion of a contract, and that such a personal right was not protected by the mandament van spolie. The Court held that the rights of an occupier of a building to his water have long been protected by our courts by the mandament, irrespective of the contractual relationship between the parties. The Court was satisfied that the applicant did not simply have a personal right against the respondent.

Finally, the Court considered whether the restriction of his rights to water and electricity was lawful. One of the conditions of title agreed upon by the property owner, and registered against the title of the property, were that the owner would be bound by the statutes and rules of the respondent. Parties are free to contract as they please. The law permits perfect freedom of contract. Parties are left to make their own agreements, and whatever the agreements are, the law will enforce them provided they contain nothing illegal or immoral or against public policy. In this case, the applicant had the choice of not renting the property if he was of the view that the applicable rules were inconsistent with his rights. The respondent’s conduct was not unlawful as it acted within the rules and the agreement it entered into with the property owner. The conduct of the respondent did therefore not amount to spoliation.

The interim order was discharged.