What you need to know before buying a sectional title unit

Owning a sectional title unit rather than a freestanding home is becoming more and more popular due to the rising costs of maintaining properties and the added security sectional title units usually offer.

The number of sectional title schemes is increasing in South Africa and this probably will continue. But, says Mandi Hanekom, operations manager of the sectional title finance company Propell, there are a few things prospective buyers should know before signing an offer to purchase.

Sectional title units are sections of a scheme, which is jointly owned by all the members. Some units do have the rights to use particular areas exclusively – such as gardens or parking bays, for example – but these areas remain part of the common property and are not owned by the owners of the units.

Once the transfer of the unit goes through, the owner becomes a member of the body corporate of the scheme, which gives the owner the right to vote at meetings and to have a say in the way the scheme is run. Every year the body corporate elects trustees to manage the finances and day to day running of the sectional title scheme, and it is in each owner’s interests to become as involved as possible in every aspect of the complex.

The rules that govern a sectional title scheme are the prescribed management rules and the conduct rules. Management rules are there for the efficient running of the sectional title scheme and cover administration, accounting, insurance, elections, meetings, levy budgeting and collection. They can only be changed by a unanimous vote by all the owners at a general meeting.

Conduct rules, on the other hand, govern the conduct of owners and tenants, and they deal with issues such as pet ownership, parking, and washing lines.

Pets in the complex – the scheme might not allow animals, so you can’t assume that this will be allowed or that the type of animal you own is accepted.

Refuse disposal – some complexes have specific disposal procedures such as differentiating between recycling and normal wet refuse, and will also have certain days that the refuse should be put out for collection.

Vehicles and parking areas are often contentious issues. There are usually allocated spaces, and owners and visitors cannot park in areas that are not for their use.

Laundry may not be hung in areas not specifically allocated for this use. Owners often hang laundry out to dry on balconies, not realising this is an infringement of conduct rules.

Signs or notices on buildings are not allowed unless the trustees have given permission for them to be displayed. This would include for sale or to let signs.

Alterations to units are not allowed unless the trustees have granted permission. No changes may be made to common property and if the alterations that may affect the common property are not permitted.

The budget of the scheme relies heavily on all members paying their levies on time and in full so that the scheme can meet all its financial requirements. If this doesn’t happen, the trustees and the scheme run into financial difficulties.

“There are solutions such as finance through a company like Propell, which assists schemes to get the financial situation back on track, but ideally the body corporate should be solvent and efficiently run,” says Hanekom.

“Without proper budgeting, the body corporate will not be able to pay its bills nor will it be able to keep the building and facilities in good condition. This leads to the building looking run-down and possibly losing value.”

Levies are divided into different categories: monthly levies cover normal expenses; levies paid for exclusive use areas; and special levies – which are used for larger items that weren’t budgeted for originally.

“It’s important to note that owners should never withhold levy payments if they are unhappy with certain situations or the behaviour of certain trustees. This is the lifeblood of any scheme, and withholding payments just leads to additional administration and bad feeling among other owners who do pay their levies on time. It is also important, if you are buying, to check the financials and whether there is a chance that a special levy will have to be called for in the near future.

“Living in a sectional title scheme can be a good proposition if it is run well and has a healthy, thriving environment. Sharing expenses such as security and lifestyle items such as swimming pools or gyms also make it a good option if this is what you are looking for. It is best, though, be sure that you can live within the constraints and can stick to the rules to be able to live with neighbours harmoniously,” says Hanekom.

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