Moving house? Consider a sectional title

If you are considering purchasing a new house, but would like to benefit from shared expenses, then perhaps you should consider a sectional title home. 

Sectional titles are separately owned units in a building. As an owner of a sectional title unit you own a stake in the common property, but you have the benefit of not being solely financially responsible for its upkeep. 

“These types of properties have gained popularity over free-standing homes due to the increase in demand of living in a secured environment and access to communal amenities such as swimming pools and tennis courts,” says Marius Tinney-Crook, ooba Regional Sales Manager.

Below Tinney-Crook offers valuable tips for those looking to buy a sectional title home.

Your rights vs the rights of the body corporate

When buying a sectional title home, you have the right to check the financial statements of the body corporate to ensure that the finances are sound before making your purchase – request these through your agent when doing your homework on the property.  Similarly, you have the right to ask for a copy of the body corporate’s insurance policy and proof that all levies and rates of the unit are fully paid by the previous owner, before you take ownership.

Should there be any issues that arise, be it noise pollution or parking in the wrong place, you can voice your opinion and you have a say in how the complex is run and maintained.

The onus is on the owner to pay monthly levies to the body corporate, attend all annual general meetings (AGMs) and ensure that their home is always in a state of good repair. The common areas need to be kept neat and tidy, usage of them need not interfere with the rights of other owners and they must be used for their intended use, for example, you may not use a designated braai area as a parking bay. Note that often rates will need to be paid directly to the municipality, and this is not the responsibility of the body corporate.

Benefits of shared costs

One of the biggest draw cards of owning a sectional title is that you get to enjoy shared facilities, such as the swimming pool, tennis courts and club houses, without the financial stress of constantly maintaining and repairing them.

The body corporate is responsible for maintenance and repairs of shared areas, which is  billed to each owner as part of the levies.

Budget for unexpected expenses

You need to budget for monthly levies, rates and electricity and therefore need to be aware of how these costs are calculated. Generally, levies are calculated at the end of every year for the following year, by the board of trustees, who then present the budget to the body corporate. If the budget is accepted, the total is then equally divided amongst the owners. Also, the larger your unit is in the complex, the more you are levied.

A special levy may be required by the body corporate to fund the maintenance of special projects, such as the painting of common areas. If there are not enough funds in the reserve, the trustees have a right to request a special levy from each unit owner in order to make up the deficit. Often a special levy is an additional expense that new homeowners may not have factored into their budget. Ensure that you ask the body corporate whether there are plans to instate a special levy in the near future, before making an offer to purchase.

A sectional title home is a great alternative to a free-standing home, especially if you’re a first-time home buyer, looking for communal living that sees expenses shared by all owners. Take care to do adequate research into the kind of property that is most likely to suit your needs and budget.

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