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Sectional title - It’s important to know the rules

Many security-minded South African homeowners have taken to living in sectional title homes due to the certain level of safety that this type of property provides, along with the fact that they are generally low maintenance. “However,” says Adrian Goslett, CEO of RE/MAX of Southern Africa, “while there are definitely benefits to living in these kinds of properties, problems can arise if homeowners are not aware of the fine print in the body corporate rules or don’t ensure that the sectional title scheme is in sound financial order.”  
 
He notes that since its inception in South Africa, the sectional title model has proven to be extremely popular, often outselling freehold homes in various regions throughout the country. “Aside from the fact that there is an increased security element within this type of property, other benefits of living within a sectional title environment include the shared cost of basic charges such as water and electricity. This usually means that these costs are lower than what a homeowner would pay in a freehold property,” says Goslett. 
 
He adds that general maintenance costs are also lower because the homeowner is only responsible for the interior of their unit, while all exterior maintenance is carried by the body corporate. Additionally a sectional title homeowner will have an added advantage because the levy payments they make will normally cover any future maintenance costs and general upkeep of their complex.
 
According to Goslett, there are a great number of reasons to purchase a sectional title home. However, it is vital that buyers are aware that there are rules that govern these schemes and anyone interested in buying this type of property should obtain a copy of the body corporate rules and read them before signing a sales agreement.
 
“Essentially the body corporate rules are what current homeowners deem as acceptable within the confines of the scheme, and they establish the ground rules for what new homeowners can and can’t do after the purchase of the property has been concluded,” explains Goslett.  He warns that once the rules and regulations of a scheme have been established, they are registered within the Deeds Office so that they can become enforceable.
 
Goslett advises that if there are any rules that buyers are unsure of or feel require some further explanation, they should contact the trustees of the body corporate to ask for clarification. He notes that an often quarrelsome issue is pet ownership. “Although a buyer may have seen a pet in the complex during their viewing of the property, it doesn’t necessarily mean that it is acceptable for owners to have pets in the complex. If a buyer does have pets, it is advisable for them to obtain written confirmation from the trustees that it is permissible to have them on the premises,” says Goslett.
 
He notes that another very important consideration for buyers looking to purchase a sectional title unit is the financial health of the scheme. “Buyers are entitled view the financial statements of the body corporate to ascertain the liquidity of the scheme,” says Goslett. “By looking at the statements a buyer can ensure that there is enough money to cover the day-to-day expenses of the complex, along with any future maintenance requirements, whether planned or not. It is also advisable to request the minutes of the last annual general meeting or any trustee meeting to see if there have been any special levies introduced or any other problems that may have occurred within the complex over the last 12 months.”
 
According to Goslett, if possible buyers should also request to view the sectional title plan of the scheme to ensure that all buildings have been approved by the municipality.  He warns that this is important because the current homeowners within the scheme will be liable for any costs or legal fees associated with rectifying and legalising the process of re-registering the scheme at the Deeds Office.
 
“The sectional title model will continue to be popular in the future and will provide a good return on investment over the long term, provided the correct principles of buying property are adhered to and the necessary research is done. Research is important when buying any type of property and for sectional title buyer, knowing the body corporates rules is a great place to start,” Goslett concludes.


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