Court ruling reinforces importance of settlement processes in property-related disputes

The Gauteng High Court recently handed down another judgment that will impact property owners, Homeowner Association trustees, and community-scheme managers, with the overall message that settlement processes must be respected.

Johlene Wasserman, Director of Community Schemes and Compliance at VDM Incorporated, this week welcomed the court’s confirmation that a litigant cannot accept the benefits of a settlement offer while rejecting the conditions attached to it.

She said the judgment offers important clarity for community schemes. “It’s a textbook example of why settlement mechanisms exist, and what happens when they are strategically misused".

The dispute began when homeowner Jennifer Koster clashed with the Centurion Homeowners Association over her revised building plans. When the HOA initially refused to approve her plans, Koster launched a High Court review.

But once litigation was underway, the HOA changed course and approved the plans and delivered them to Koster under a formal Rule 34 settlement offer, marked “without prejudice” and expressly excluding any contribution to her legal costs.

Koster accepted the benefit, Wasserman said, using the approved plans to secure municipal approval and ultimately obtain her occupation certificate. But she continued litigating, arguing that the HOA’s approval was an independent administrative act — not part of the settlement offer.

In rejecting the argument, it held that the approval was clearly tendered as part of a conditional settlement, and the fact that the plans were stamped before delivery did not magically detach them from the terms of the offer.

“In simple terms, you can’t take the performance and reject the terms. Settlement doesn’t work that way,” Wasserman said.  By the time the matter was heard, the dispute was effectively over - Koster had already obtained the relief she sought.

“The court dismissed the review as moot and made no order as to costs, noting that awarding costs in these circumstances would encourage opportunistic litigation and undermine the purpose of settlement procedures,” Wasserman said.

According to her, this ruling is important, as it sends a clear and necessary message to anyone involved in HOA or property-related disputes: you cannot accept the benefits of a settlement tender while rejecting its conditions.

“Even if one party tries to reframe the offer as something else — like an administrative concession — the court will look at the substance, not the spin. Courts will not entertain litigation strategies aimed at squeezing out a costs order after the substantive relief has already been achieved".

For HOAs, the judgment reinforces that they can resolve disputes pragmatically without being punished for doing so for homeowners and litigants. “It’s a warning: selective use of settlement offers will not be rewarded,” Wasserman said.

The court also reaffirmed that the High Court retains jurisdiction over HOA disputes. “This is welcome clarity in an area that has become increasingly muddled. Ultimately, the ruling champions fairness, procedural integrity, and responsible conduct in community-scheme litigation".

Drawing from the judgment, Wasserman highlights several practical implications that will shape how HOAs and homeowners navigate disputes going forward, including that if an HOA ultimately provides the relief a homeowner seeks, any ongoing legal challenge may become moot.

“This judgment is a significant moment for community-scheme governance. It reinforces that settlement processes must be respected, that conditional offers cannot be selectively exploited, and that HOAs are entitled to resolve disputes without fear of punitive cost orders. For homeowners, it is a reminder that litigation strategy cannot override legal principle".

The Court has drawn a firm line. Fairness, clarity, and procedural integrity must guide how disputes in community schemes are resolved. This judgment strengthens that foundation, Wasserman said.

zelda.venter@inl.co.za