select
|

Levy complications in mixed use buildings

Although not the norm, there are many cases where sectional title developments are not standard residential buildings and have commercial units on the ground floor and residential units above.

“In these cases the levy amounts are sometimes debated among the owners in the different sections because of their different uses,” says Michael Bauer, general manager of IHFM property management company.

“The commercial component, in all likelihood, would not form part of the residential component and would not make use of the lift or other amenities in the building, such as the gym or swimming pool. Yet they will be subsidising the operational and maintenance costs of these because their participation quota dictates this. In cases such as these, the commercial owners would probably want their levies reduced by using a different allocation key, and this is possible in accordance with section 32 of the Sectional Titles Act, provided a special resolution is passed and written consent is given.

“The expenses of the sectional title scheme are usually itemised and the different line items in the levy budget – such as security and maintenance of the building – could be allocated jointly to those who use these. The other expenses, such as the maintenance of the lift, pool and gym, could then be allocated to the owners of the residential units only.

“On the other hand, some businesses might attract pests and would need pest control measures paid for by the commercial component only. A restaurant might also use more water and should be charged accordingly, and its electricity charges may be higher.”

He advises buyers who are considering buying units in a mixed use development to ask a few simple questions. First, check what the proportional quotient is for the unit they are interested in and how the commercial section differs. Second, find out what items the commercial section is paying towards and what sort of businesses are being run in the building.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 20 Feb 2018
      Owning a home is a milestone that most South Africans aspire to. Becoming a homeowner is a step towards growing personal wealth and owning an asset that appreciates in value over time, provided of course that the correct principles are applied during the buying stage of the process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Feb 2018
      The suburb of Greenstone in Johannesburg east came to be over the last two decades. “In the beginning, it was literally just a hill with not so much as a shopping centre,” says Michael Levy, Property Consultant at Jawitz Properties Bedfordview. Today it has plenty shopping facilities and is fully built, boasting high-density, upmarket housing and residential estates, though still has a few pockets poised for commercial development.
    • 20 Feb 2018
      A major shift in the ageing paradigm has precipitated an equally dramatic transformation in the retirement sector, with modern accommodation options worlds away from the conventional model.
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK