select
|

Low levies in sectional title schemes 'not necessarily a good thing'

"In all sectional title developments, as a purchaser, one of the first questions most ask is what the levy is," said Lanice Steward, managing director of Knight Frank Anne Porter.

Buyers tend to compare the costs of different apartments in comparison with the levies but this can be a dangerous approach, she said.

Some people looking at the top end luxury apartments are often horrified at the levies being charged but they need to sit down and do the exercise of calculating what it costs to live in a freestanding house with all the extras such as gardeners, garden maintenance, swimming pools, landscaping, electric fencing, a security guard at the gate, etc.

In our experience people are often taken aback with the high levies but if all of the incidentals are added up it is easy to see why these are necessary. The benefit of this is that a buyer will have all of the extras and only pay a portion of the cost of running these each month.

One must remember that the levy includes all the external maintenance of the building, the upkeep of the lifts (if there are any), the gardens, the communal property, the gates, security, and much more, said Steward.

An apartment block might have low levies because the body corporate has not done the necessary financial planning for the year ahead, she said, and this can lead to special levies having to be raised in order to get much needed repairs or maintenance done. A low levy could also mean that certain things are being neglected because there are no funds available to carry out the repairs.

This is of particular importance when looking to buy into an older block, where more maintenance might be necessary and where replacement of certain large budget items (such as a lift) might be needed down the line, she said.

"When looking to buy, the financial health of a scheme should be assessed carefully. Ask the agent for copies of the financial statements and check whether the levies are being put to good use. The banks will also ask for these if the buyer is applying for a bond so it's best to check beforehand and be sure that you're buying into a financially sound scheme."


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    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