Tenants planning to rent sectional title flats or townhouses should make sure they understand what their rent covers and how levies may affect them.
So says Berry Everitt, MD of the Chas Everitt International property group,
who notes that sectional title landlords are generally responsible for the
upkeep of the interior of flats or townhouses and will usually include this
cost in the monthly rental.
Some landlords may, however, prefer to reduce rental in return for tenants
taking some responsibility for interior repairs and maintenance.
Writing in the Property Signposts newsletter, he says that in sectional
title complexes, the upkeep of the exterior and common areas such as gardens and garages is the responsibility of the body corporate - which pays for the necessary services with monthly levies collected from all the owners in the scheme.
"And although tenants do not usually have to pay the levy, that does not
necessarily mean that levy increases will not affect them. They need to find
out from their landlords whether or not increased levies will affect their
Everitt says that before renting a sectional title unit, tenants should also
ensure that the financial position of the body corporate is sound. "If there
is a history of owners not paying their levies, it may impact on the body
corporate's ability to maintain the complex. Even worse, if their landlord
is guilty of non-payment, his unit may be attached and sold in execution to
pay for arrears, leaving them literally out in the cold."
Tenants also need to find out how they will be billed for municipal
services. While some local authorities have started billing sectional title
units individually, many sectional title schemes still receive a single
account for water and electricity and divide the total among the owners in
terms of the relative size of their units.
"Owners who rent out their properties usually then just add this amount to
the rent, but the system can be very unfair, with a single person renting a
three-bedroom unit possibly having to pay more than a family of four renting
a two-bedroom unit next door.
"Prospective tenants should thus try to ensure, where possible, that they
will be billed for their actual water and electricity usage."