The New Communal Jetty Berth Agreement - Read This First
Below is the email I sent to Boet Grobler, GM of the HOA, on 21 May 2025. The facts don't need my commentary. They speak for themselves. (Bold added here for emphasis)
Dear Boet,
I have a Thesen Islands Jetty Berth Agreement signed by me and the Thesen Islands Home Owners Association (the Parties), on 14 February 2004, for a jetty berth designated as 1-1. You have the original agreement in your office.
The period began on the Occupation Date, 14 February 2004 and terminates on 31 December 2101.
I quote from this Agreement: No variation of the Agreement shall affect the terms thereof unless such variation shall be reduced to writing under the hands of the Parties.
Having taken legal advice, I will not be signing the new Agreement. It would leave me in a materially worse position by introducing ongoing monthly levies, reserve fund contributions, additional administrative costs, and more onerous transfer provisions, all of which materially erode my existing rights.
Therefore the existing Agreement will continue to regulate the relationship between the Parties.
The new Agreement was submitted without notice, explanation, or any account of the changes. More fundamentally, the HOA has failed to acknowledge the existence of a binding Agreement between us, one that can only be varied with the consent of both Parties. This falls short of the HOA's constitutional obligation to protect members' interests. I request that you withdraw it.
I intend to share this email on my blog so that fellow berth holders can consider the implications and make an informed decision before signing, which the HOA has failed to provide.
Sincerely,
Ken Rutherford
Yesterday, I received a reply from the HOA. While it acknowledges the existence of my 2004 Agreement, it sidesteps the central issue: that the Agreement is a binding contract that cannot be varied without the consent of both parties. Instead, it focuses on justifying the need for a new agreement — justification that does not bear scrutiny. Notably, the HOA's rebuttal of my point about their constitutional obligation conveniently misreads my concern — I was referring to the manner in which the new agreement was presented, not to the jetty replacement programme itself, as you can plainly read above.
If you would like to read the HOA's position for yourself, simply tell them you won't be signing the agreement as you are happy with your current agreement. You will likely get the same answer I got.
According to the existing Agreement, how is the maintenance for these communal jetties funded? If those jetty owners did not pay a specific levy, it means that all homeowners are funding that which means those with private jetties are funding their own, plus the communal jetties? Is that correct? If so, is that fair?
ReplyDeleteThank you for reading the post and then commenting.
DeleteYou ask how maintenance and repairs for the communal jetties is funded? It is paid by the berth holders themselves. Just like the owners of the private jetties pay for their own maintenance and repairs. Here is the clause in the existing Communal Jetty Berth Agreement:
The BERTH HOLDER will, upon request made by HOA, pay to HOA the BERTH HOLDER's proportionate share of the cost of all such maintenance and repairs together with the HOA's reasonable administrative cost in connection therewith. The BERTH HOLDER's proportionate share is the total of all such costs divided by the number of BERTHS comprising the JETTY.
This has worked well. Using my experience as an example, I have had to pay for repair costs of a few thousand Rands - it has been so little, I cannot remember any amount - probably 3 times in the last 20 years. No more. Maybe less.
And these are the jetties that the HOA say are far inferior to the new R50,000+ per berth holder new ones. If they are superior, there should be less repairs over the next 20 years that my current jetty has needed.
This begs the question why is a monthly levy needed? While berth holders will continue to pay for repairs and maintenance the same way, the new agreement has this:
The BERTH HOLDER shall be liable to pay a MONTHLY MAINTENANCE LEVY to TIHOA in respect of the ongoing maintenance, repair, insurance, electricity and administration costs relating to the JETTY and BERTH.
So now while we will continue to paying a proportionate share of repair and maintenance costs, we must do it by paying a monthly levy, if enough has been collected. If the same levy had been in place when I signed my Agreement over 20 years ago, I can only speculate how much more I likely would have paid over the cost of, at most, 3 repairs. And even if your levy is not used, you don’t get it back when you sell. It is swallowed up by the HOA.
But it gets worse. On top of the HOA creating an unjustifiable and undisclosed levy, they will then will charge all jetty berth holders an “administration cost” for managing it.
The is how our are government works – create an extra layer of bureaucracy and make the user pay for it.
I should add that the new agreement was presented simply as an 'update' — with no acknowledgement of the existing binding agreements, no explanation of the material changes, and no indication of how those changes affect existing rights. In my view, members were not given enough information to sign with informed consent. It touches on multiple aspects of the laws of South Africa, and the HOA's fiduciary duty to its members.
It's precisely why I felt this needed to be written about openly. I will not sign the new agreement.