Appearance restrictions in community schemes

By Anton Kelly

Property owners in homeowners’ associations (HOAs) and sectional title schemes often run foul of seemingly draconian rules that limit or completely remove their freedom to decide on the appearance of their properties.

In sectional title schemes there are two prescribed rules which directly limit owners’ freedom to change the appearance of their property. The first, prescribed management rule 68(1)(iv), says owners may not do anything which is likely to prejudice the harmonious appearance of the building and the second, prescribed conduct rule 5, says they may not do anything to the common property that is aesthetically displeasing. And that second rule gives the trustees the discretion to decide whether whatever is done is aesthetically displeasing or not, because they can give their consent if they do not consider displeasing. Note that both these rules actually apply to common property, the property of which owners share ownership. And that makes the rules reasonable, certainly in the traditional sectional title scheme, a block of flats. But what about schemes that are made up of individual houses? Why can’t the owners in schemes like that have some freedom to decide what colour they want their houses?

Every HOA that I’ve come across has pretty strict guidelines on what owners can and can’t do regarding the appearance of their properties. Smaller HOAs have these guidelines in their Memorandums of Incorporation (MOIs) or constitutions but the bigger HOAs have separate documents, usually referred to as the Architectural and Landscaping Guidelines, which form part of their governance documentation and are therefore binding on their members.

Some of the architectural guidelines are so detailed that they specify exact paint colours, even down to the formula required to achieve that colour. Other common architectural guidelines deal with the basic design of the houses and what sort of roofs, chimneys, windows, outbuildings and perimeter walls and fences may be used. Landscaping guidelines can specify terracing on slopes, how garden paths must be made and provide a range of indigenous plants to choose from.

The point of all these restrictions is of course to maintain the market value of the properties in the scheme. The developer, in trying to create a scheme attractive enough that the properties contained in it will be easy to sell and generate a decent profit, will have a particular vision in mind. The MOI or constitution almost always states that one of its aims is to preserve that vision. And the tool the HOA uses to achieve that aim is very strict application of those guidelines.

Potential buyers attracted to a development need to be aware that these sorts of restrictions exist. HOAs almost always ensure that buyers are made aware of the guidelines; buyers must read them very carefully and consider and balance the restrictions against their benefits before making an offer to purchase.

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