Consider what other costs you are buying into with sectional title ownership

SECTIONAL title property ownership has grown in popularity over the past decade for many reasons, possibly the most prevalent being the security levels of many developments and the fact that sectional title units tend to be more affordable.

However, living in a sectional title complex doesn’t always suit everyone so you need to weigh up all the pros and cons before signing on the dotted line, says Willem le Roux, director at sectional title finance company, Propell.

“The advantages of living in a sectional title scheme are many. Possibly the most important is the sharing of major costs of upkeep to the buildings as well as municipal costs. Owners also have access to many amenities that they may not be able to afford if they had bought a freestanding home. In addition, the body corporate will take care of such items as building insurance, wages of cleaners and gardeners, administration and security as this is all included in the monthly levy payments from each owner.”

Before deciding to purchase, you need to understand that when you buy a unit in a sectional title scheme, you are buying a section of the development as well as a share of the common property. Types of sectional title schemes include townhouses, apartments, semidetached homes, or duets, and the exterior of the building is common property. This means that the body corporate is responsible for maintaining the roof and painting the outside walls.

Some parts of the common property may be for the exclusive use of specific owners, such as balconies, garages, private gardens or storerooms. Although the unit owners won’t own their exclusive use areas, they have sole right to its use.

In most sectional title schemes, the units will be close to each other. Some people might see this as a benefit, whereas others might see this as a negative aspect, as neighbours are not always perfect.

“All owners have to comply with the management and conduct rules, which sometimes causes conflict. A typical example is where the rules state no pets and an owner chooses to ignore this. Other rules could include behaviour of residents and guests.

“Another disadvantage is that owners may not alter their unit exterior without first getting the approval from the body corporate. Some people see this as a great advantage as it creates aesthetic uniformity.

“If you’re a person who tends to resent rules or the enforcement of these, sectional title might not be the right choice,” says Le Roux.

Last, but not least important, is the payment of levies. The body corporate is responsible for the cost of administering and maintaining the common property which is paid from the funds raised from owners.

When owners fail to pay their contributions on time, the body corporate may not have enough money to meet its obligations. An added problem is that it needs to spend additional money – that it may not have – to compel delinquent owners to pay up.

“A high level of delinquency is the best indicator of poor financial health,” says Le Roux.

“Prospective buyers should always ask for the body corporate’s financial statements to ensure that the complex is financially sound, because poor financial health becomes the problem of the owners in the form of higher future contributions.

“Financial difficulties in a scheme will affect the overall saleability of other units.

“The bottom line is that you need to investigate what you are buying and consider the impact before signing an offer to purchase,” says Le Roux.

Call Willem le Roux on 086 133 3435 or see www. propell.co.za