There are many benefits of buying into a sectional title complex, from the additional security to the shared maintenance costs and the greater sense of community. Yet, to enjoy these benefits, buyers will need to abide by the regulations set out by the complex’s body corporate or homeowners association (HOA).
“While there are many advantages to purchasing a sectional title unit, challenges can arise, and benefits can be dampened if you are not fully aware of the rules and regulations stipulated by the body corporate before you buy. It is imperative first to obtain a copy of and carefully read through the rules that govern the scheme before buying a sectional title home. If there is anything that is unclear, it should be clarified with the trustees before signing on the dotted line,” recommends Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
For buyers who are hoping to renovate their sectional title unit after purchasing, Kevin Jacobs, Broker/Owner of RE/MAX Premier, explains that it is highly unlikely that the Body Corporate will give approval to either the agent or the purchaser prior to the transfer being finalised. “The correct process would be for the current owner to obtain approval prior to transfer. If this was a condition of the sale stipulated in the OTP as a special condition, then the seller would have a legal obligation to fulfill such conditions prior to transfer. However, if this planning approval was not stipulated in the contract, then the seller has no obligation to obtain such approval prior to transfer,” he clarifies.
Those hoping to see a copy of the estate’s financials – which is highly recommended as a way to ensure that the estate is not running at a loss – will have to do so through the seller, as body corporates generally will not provide financials to prospective buyers unless instructed to do so by the seller.
Buyers may also run into some delays when it comes to receiving a copy of the most recent financials as this might not be available at the time a buyer shows interest. “It all depends on when the complex’s financial year end is. However, the seller should have a copy of the previous years’ audited financials that can be shared with the prospective buyer. In the meanwhile, the body corporate can supply a letter confirming that its financials are in good standing and are awaiting the final draft from the auditors. This letter should also confirm the expected date of completion,” he advises.
As a matter of interest, Jacobs points out that most banks will not approve bond finance without a copy of the latest audited financials, so buyers may need to sit tight before their home loan can be approved.
“There is little doubt that sectional title properties will remain a sought-after purchasing option among buyers. But, as with all property purchases, those who opt to buy a sectional title unit should take the time to do their research and consult with a local real estate advisor to ensure they are making an informed decision,” Goslett concludes.
