Zoning Rights VS Home Owner’s Association Rules

A recent High Court judgment addressed the knotty problem of an HOA’s powers to bar an owner from running a home-based business.

The facts of the case were that a homeowner in an estate who was running a hair salon from her house breached a written undertaking to the HOA to cease business, and that the HOA then applied to the High Court to interdict her from continuing.

She was bound (via both her purchase agreement and the title deeds) by the HOA’s constitution and conduct rules – which prohibited the use of homes in the estate for anything other than residential purposes, except by special resolution, she argued, however, that her home business was permitted by the local zoning regulations – which did indeed permit certain small-scale non-residential activities – and that the HOA had no right to override these zoning scheme provisions by prohibiting all non-residential use.

The interdict was, though, eventually granted by a “full bench” of the High Court, which held that “… there is nothing contained in our law which prevents a property owner from agreeing to a limitation of its rights ….”, and that the individual home owners in this estate had, by agreement, forfeited their right to use their properties for anything but residential purposes.

Moreover, the Court said, the HOA had not purported to change the municipal zoning scheme and was “well within its rights to seek to preserve the residential character of the development.  The home owner was thus ordered to stop running her business from home and, to make things worse, was also ordered to pay the HOA’s legal costs.

Source:  Bisset Boehmke Mc Blain Attorneys