The ins and outs of sectional titles
Makes sense only if the property is well managed
Pearl Scheltema, the CEO of Fitzanne Estates, shares her tips for buyers looking to invest in sectional title scheme property. When you buy in a sectional title scheme, you get access to a much wider range of amenities than you would if you purchased a full title property for the same price. This value for money is a large draw but only when well-managed.
Amenities can include public spaces such as pools, clubhouses and fitness centres.
Sectional title developments generally have good perimeter and entrance security, which is usually included in the levies.
Take note of the conditions of the shared amenities – is the pool well taken care of, are the communal gardens neatly maintained and does the clubhouse offer what was promised? These public areas can offer early warning signs of a body corporate that is not doing its job.
You will be partially responsible for the maintenance and repair of these facilities via your monthly levy. If the complex is badly maintained, that is very likely to have a negative effect on the resale value of your home in the future, and in the meanwhile might mean that you have to pay a hefty special levy to cover some major repairs or refurbishments.
The management rules cover the way in which the scheme is managed and deals with the appointment of scheme executives, how to run meetings, voting at these meetings, elections and duties of the trustees, etc.
Financial wellbeing
As a potential buyer, you should ask for a copy of the most recent audited financial statements of the body corporate and the minutes of the most recent AGM, especially the chairperson’s report.
Buying a sectional title unit means buying into the assets and liabilities of the whole scheme.
Additional costs
It’s a good idea to ask to see the most recent levy account as proof that the levy you’re being informed about is correct.
Are there any other charges payable? There might be additional costs such as Dstv connection charges, parking fees or special levy contributions.