Different types of HOA compliance
How to HOA | Part 6
31 July 2025 | Nicole Nel
Previously, we spoke about the different types of meetings, and the general meeting processes to be followed, within an homeowners association (“HOA”).
For this article, we will be focusing on the different types of accounts, records and financial requirements that HOAs must comply with.
Non-Profit Company Compliance
In a Non-Profit Company HOA, the keeping of accounts and records and the financial requirements of the HOA are not only governed by the Memorandum of Incorporation (“MOI”) of the HOA, but also the clauses in the Companies Act 71 of 2008 (“the Companies Act”) relating to meetings.
Section 24(1) of the Companies Act provides that any documents, accounts, books, writing, records or other information that a company (HOA) is required to keep in terms of this Act or any other public regulation must be kept in written form, or other form or manner that allows that information to be converted into written form within a reasonable time, and for a period of seven years.
In terms of section 24(3) of the Companies Act, every company (HOA) must maintain:
A copy of its MOI, and any amendments or alterations to it, and any rules of the company made in terms of section 15(3) to (5) of the Companies Act;
A record of its directors, including the personal details of any person who has served as a director of the company, for a period of seven years after the person ceases to serve as a director;
Copies of all:
a. Reports presented at an Annual General Meeting of the company (HOA), for a period of seven years after the date of any such meeting;
b. Annual financial statements required by the Companies Act, for seven years after the date on which each such particular statements were issued, and
c. Accounting records required by the Companies Act, for the current financial year and for the previous seven completed financial years of the company (HOA).
Notice and minutes of all shareholders (members) meetings, including:
a. All resolutions adopted by them, for seven years after the date each such resolution was adopted; and
b. Any document that was made available by the company to the holders of securities in relation to each such resolution;
Copies of any written communications sent generally by the company to all holders of any class of the company’s securities (members), for a period of seven years after the date on which each such communication was issued, and
Minutes of all meetings and resolutions of directors, or directors’ committees, or the audit committee, if any, for a period of seven years after the date:
a. Of each such meeting, or
b. On which each such resolution was adopted.
In addition to the above, section 25(1) of the Companies Act notes that the aforementioned records must be accessible at or from the company’s (HOA’s) registered office, or another location/s within the Republic.
Furthermore, section 26(1) of the Companies Act provides that any member has a right to:
Inspect and copy the information contained in the records of the company (HOA), as mentioned above;
Any other information to the extent granted by the MOI, and
Exercise the above rights:
a. By direct request made to the company (HOA) in the prescribed manner, either in person or through an attorney or other personal representative designated in writing; or
b. In accordance with the Promotion of Access to Information Act, 2000 (“POPIA”).
Very importantly, section 26(6) notes that it is an offence for a company (HOA) to fail to accommodate any reasonable request for access, or to unreasonably refuse access, to any record that a person has a right to inspect or copy in terms of the Companies Act, or to otherwise impede, interfere with, or attempt to frustrate, the reasonable exercise by any person of the rights set out in the Companies Act.
Section 28 of the Companies Act states that a company (HOA) must keep accurate and complete accounting records in one of the official languages of the Republic, and that it is an offence for a company (HOA) to not keep accurate or complete accounting records, or to falsify same.
Annual financial statements within a company (HOA) are addressed in section 30 of the Companies Act. In this regard, each year, a company (HOA) must prepare annual financial statements within six months after the end of its financial year, or such shorter period as may be appropriate to provide the required notice of an annual general meeting.
Furthermore, the annual financial statements of a company must:
Include an auditor’s report, if the statements are audited;
Include a report by the directors with respect to the state of affairs of the company;
Be approved by the board and signed by an authorised director, and
Be presented to the first shareholders (members) meeting after the statements have been approved by the board.
It must be noted that all of the aforementioned clauses are unalterable provisions of the Companies Act, and, therefore, an HOA’s MOI cannot have clauses that are contrary to the above clauses contained in the Companies Act.
Common law HOA’s compliance
For common law HOAs, the keeping of accounts, records and the financial requirements that must be complied are only governed by the HOA’s Constitution and takes great inspiration from its Non-Profit Company HOA counterparts and the Companies Act.
In general, the only difference of note between common law HOAs and Non-Profit Company HOAs in this category are that common law HOAs almost always opt for accounting review of their financial statements instead of a formal audit, as is usually required in terms of the Companies Act.
We hope that this article provided you with further guidance around the keeping of accounts, records and requirements for financial compliance with HOAs.
Should you require any more information regarding this topic, don’t hesitate to contact us today on 061 536 3138 or at info@tvdmconsultants.com
Previous articles in the series
How to HOA Part 5 | Different types of meetings
How to HOA Part 4 | Who is the management committee of an HOA?
How to HOA Part 3 | Who are the members of an HOA and what are their obligations?
How to HOA part 2 | Different types of governance documentation in HOAs
How to HOA part 1 | Common Law and Non-Profit Company HOA key differences
About the Author:
Nicole Nel is a Community Schemes Consultant at TVDM Consultants.
Nicole joined our team at the start of 2021 after finishing up her LLB at Stellenbosch University, where in the final year of her degree, Nicole worked as a research intern for the South African Research Chair in Property Law (“SARCPL”), where her research contributed towards various Property Law Juta publications. After graduating, she went on to complete an Advanced Diploma in Corporate and Securities Law through UNISA with distinction. Nicole recently completed the SA Legal Academy mediation course, and is an Accredited Mediator. Nicole is also a member of Golden Key, international honours society as a top academic achiever in her respective fields of study.
Click here to learn more about her.
