If you are considering buying a new home or rental property, and especially if you are a first time buyer, there are a lot of reasons why you should consider purchasing a sectional title property. Sectional title properties are units that are separately owned in one building or estate. This means that you have your own share of the common property, but that you can share the financial responsibility of maintenance, repairs and upkeep with the other residents.
Recently sectional title homes have become more popular than free standing homes in South Africa. This is largely due to the high demand for being able to live in a property that is secure, and also to have access to facilities that would cost too much to build and maintain at a free standing home, such as a shared swimming pool, sports centre, tennis courts, access control and other amenities.
Tips on buying a sectional title property
When you are looking at sectional title homes you have to be sure that the finances of the body corporate (or the managing body of the communal property) is sound. Once you are interested in a property you can request these financial statements through your agent or directly from the body corporate. You also have to ensure that you see proof of the insurance policy from the body corporate and also proof that all levies, rates and taxes on the unit you are interested in, are paid up in full by the previous owner, or you may become liable for these.
After purchasing a sectional title unit you will be liable for the monthly payments of levies to the body corporate and to attend all the meetings, and to ensure that your home is always in a good condition. The levies will cover the cost of the maintenance and upkeep of common areas and facilities. Rates and taxes are separate from the levies and have to be paid directly to the local municipality.
3 Benefits of sectional title properties
- You get to enjoy facilities that you would probably not normally be able to afford, such as a swimming pool, club houses, sports centres, and many others (depending on the estate or block) without having to carry the financial responsibility for these by yourself.
- Maintenance of common gardens, facilities, parking bays and security will be covered by the levies.
- The body corporate is responsible for the organising, appointing and managing contractors that provide services on the property, which means less hassle for you!
Budgeting
You need to know exactly how much your levies, rates and taxes will set you back every month, and you have to be aware of how these are calculated. The levies are typically calculated annually for the following year, and once approved by the board of trustees, these costs are divided between the owners of the units. This means that the more facilities there are, and the bigger your unit is, the more your levies will be. Also be aware that other levies may be required to pay for non-routine projects, such as repainting of common areas or the installation of new or replacement facilities, so you have to be sure to ask about these and make provision for them before purchasing.
Being a great alternative to a freestanding home, a sectional title property should certainly be considered next time you want to buy a property. Just be sure that you do your research and that you know exactly what costs and levies you are responsible for!