Body Corporates and Home Owner Associations (HOA) are all run differently and there are various types of sectional title properties, but there are a number of general factors that buyers need to take into consideration when looking to purchase a townhouse, apartment, or cluster home.
This is according to Dave Burger, Sectional Title Specialist for Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs who says that many of these factors will not only impact the buyer’s experience once living there but also the resale value when the time comes to sell.
“The first thing to consider is the overall appearance of the complex because, regardless of how nice the unit for sale is, a rundown or tatty exterior will deter many prospective buyers.
“And, first impressions are usually the correct assumption of how the body corporate or HOA is being run.
“If the complex needs maintenance or is being neglected, it’s very possible that at some point, a special levy will be introduced to fix the damp, paint the exterior etc, which could become costly on top of the standard levies.
“And don’t forget to take a look around any communal grounds and areas to see if they are being well-maintained and kept litter-free.”
He adds that buyers should also try to ascertain whether the staff employed to maintain the complex being managed by a complex or estate manager or are they just left to do their own thing.
“Another important factor to note is the security and how well it’s being managed because the better it’s monitored and managed, the better the reputation of the complex or building. An unmanned security desk and lack of camera’s is likely to put off many prospective buyers.”
Burger says that another factor often overlooked is the financial management of the building or complex: “Find out whether the financials of the complex up to date and if they’ve been audited correctly and also ask if there a positive balance in the pot so that there’s enough money to pay for any unforeseen problems.
“It’s also a good idea to find out whether the levies are being collected timeously and whether or not errant owners are reigned in and charged interest on late payments.
“I always provide the Annual Finance Statement pack and Conduct Rules for any of my serious buyers for them to peruse prior to compiling the Offer to Purchase.”
“And if possible, also establish who from the complex is representing the Body Corporate or HOA, is this being run efficiently and are those trustees who have committed to this job doing it to their best ability for the welfare of the complex,” adds Burger.
A factor which has less impact on future return on investment than on the current buyer’s well-being is the implementation of body corporate rules – or lack thereof.
“Body corporates need to be active enough on a daily basis to ensure that residents adhere to the rules and regulations such as no noise after a certain time and ensuring that owners/tenants don’t leave their rubbish in common areas.”
“These issues need to be considered seriously by any purchaser of a property in any complex or building before they put in an offer to purchase,” concludes Burger.
