Five essentials for first-time sectional title buyers

Sectional title flats and townhouses are the properties of choice for a large percentage of first-time homebuyers in SA – but while they generally offer excellent value, there are some other factors that such buyers need to consider before they sign a sale agreement.
So says Andrew Schaefer, MD of leading national property management company Trafalgar, who notes: “It is important realise that buying a sectional title unit also means joining an established community of homeowners who must all abide by a certain set of rules that don’t necessarily apply to freehold properties.
“In other words, prospective buyers need to establish what would be expected of them as owners in that particular sectional title building or complex – and what they could expect from their new neighbours.”
As a first step in this process, he says, they should check on the physical condition of the sectional title complex as a whole, bearing in mind that they will share ownership of the “common property” such as entrance halls, lifts, parking areas, the garden and the security equipment, and be partially responsible for the maintenance and repair of these facilities via their monthly levy.
“They need to consider that if the complex is badly maintained, that is very likely to have a negative effect on the resale value of their home in the future – and in the meanwhile might mean that they have to pay a hefty special levy to cover some major repairs or refurbishments.”
Next, says Schaefer, buyers should obtain a copy of the most recent audited financial statements of the body corporate and the minutes of the most recent AGM, especially the chairman’s report.
“Buying a sectional title unit means buying into the assets and liabilities of the whole complex and you owe it to yourself to be informed about its financial affairs and operational status. If the levies are badly in arrears, for example, or the complex does not have a substantial reserve fund for unexpected expenses, you may want to look elsewhere.”
Third, he says, you must make absolutely sure what it is that you are being asked to buy. “Prospective buyers may be told, for example, that a parking bay belongs to a specific unit when it is in fact part of common property. Or they might not be told that because their balcony is actually an exclusive use area, they will have to pay an additional amount to the body corporate for its maintenance and repair.
“And such considerations could make a significant difference to the affordability of the purchase and thus their decision to buy or not.”
The fourth thing for sectional title buyers to double-check is that the monthly levy quoted by the seller or the estate agent is correct, Schaefer says. “Ask to see the most recent levy account, and enquire whether there are any other charges payable that are not shown, such as a DSTv connection charge, parking fee or special levy contribution. The latter is especially important as the introduction of a special levy that they cannot afford may well be why the current owners are selling.”
Lastly, he says, prospective buyers need to read the Conduct Rules of the complex. “These apply to all residents and are the ‘nitty gritty’ of sectional title living. They will tell you, for example, if pets are allowed or not, if there are noise restrictions, and how owners and tenants are expected to treat the common property – and together with the other information you have gathered, should give you a very clear picture of what it would be like to live in this complex if you were to buy the unit you viewed.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 22 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us