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

Weekend Argus (Saturday Edition) - - PROPERTY - SATUR­DAY

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

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