Tips for buying a sectional title property | Fin24
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Tips for buying a sectional title property

Aug 04 2015 15:28

Cape Town - When buying a sectional title property, an owner invests in a community rather than just acquiring a property, according to the latest Absa Homeowners Insights survey.

The survey provides some tips for buying a sectional title property:

- The common properties - for instance, swimming pools, club house and tennis courts - as well as the outside of the buildings are typically the responsibility of the body corporate to manage;

- Levies are collected, which usually cover the cost of the managing agent, the maintenance of the common property, insurance and sometimes water and electricity;

- Sectional title properties often have much better security measures in place than full title properties. By sharing costs among the owners, complexes can appoint a better quality security company;

- The average selling price for sectional title units are still less expensive than full title properties. Though the characteristics do not allow for an easy like-for-like comparison, it is, however, much cheaper to maintain and run a sectional title unit due to the sharing of costs for maintaining communal property;

- A smaller property size could enhance the need for amenities close to the property, and encourage entertainment outside the home;

- Developers have realised the growing demand for this type of property and larger complexes could be more profitable to develop than individual free standing units;

- There are complexities that come with the sectional title community. Body Corporates determine, set and enforce conduct and management rules specific to the complex.. Rules and regulations may be instituted or changed and it may not suit every individual owner;

- Investing in a sectional title complex could expose you to the responsibility for the overall health of the body corporate and other tenants potentially not paying;

- To renovate, expand or alter the exterior of your property, the body corporate will likely require you to obtain their approval, and they may restrict you from doing so;

- Sectional title scheme ownership basically means that you own a part of the "scheme". Based on "part ownership", owners of sectional title units are jointly liable for any and all debt of the body corporate. Should any owners not pay their levies, other owners are liable;

- The majority of sectional title complexes, especially apartments, do not allow owners to have pets;

- The close proximity of your neighbours does not bode well for those who enjoy peace and quiet.

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

absa  |  money  |  property


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