Advantages & Disadvantages of Sectional Title Schemes | Legal Articles

 

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Advantages & Disadvantages of Sectional Title Schemes

Sectional Title Schemes - Yes or No?

Deciding on whether to buy into sectional title schemes: a townhouse complex or block of flats, entails weighing up the advantages and disadvantages to see if they align with your lifestyle needs.

Sectional-Title-Scheme

If you plan to live permanently in a scheme, avoid buying a home in a sectional title scheme with a high percentage of rental units.

Units that aren’t owner-occupied may be filled with disorderly vacationers and the owners may not be concerned about the running of the section.

For your convenience, below is a compiled list of the advantages and disadvantages.

The Advantages of Sectional Title Schemes

The advantages of owning a sectional title property rather than an individual property typically include:

  •     Increased safety and security
  •     Property taxes are lower than freehold homes
  •     A variety of community sports and leisure facilities
  •     A community lifestyle filled with lots of social contacts and the companionship of close neighbours
  •     No garden, lawn or pool maintenance
  •     These types of properties can sometimes be situated in locations where owning a freehold home would be exorbitantly expensive, e.g. a beach-front

The Disadvantages of Sectional Title Schemes

  •     Unreasonably high community levies
  •     Restrictive rules and regulations
  •     A possible lack of privacy due to a confining living space and social environment
  •     Overuse of communal facilities, especially in a large sectional title scheme or at peak periods, i.e. using the swimming pool or booking a game of tennis or using a fitness room may be difficult during holiday season.
  •     Rude or noisy neighbours
  •     Restricted living and storage space
  •     Insufficient secure off-road parking
  •     Administrative duties can be time-consuming and stressful
  •     Owners or trustees may try to push through unpopular proposals at AGM’s and in some cases, using proxy votes.

If you’re planning to buy a sectional title property, it’s important to ensure that it is operated well and that there aren’t any major difficulties with the common property.

If there are, you could be liable to contribute towards the costs of repairing such problems.

Things to check before buying a sectional title property

Before purchasing a sectional title property, you should check (or ask your attorney to check) the following:

  •     That the seller does in deed own the property and their exclusive use area they claim to own.

This can be done by asking the trustees to show you a copy of their registered section plan.

  •     If the section has been altered or extended in any way, that the work has been registered and that it had the necessary consent.
  •     Whether a Section 25 Right to Extend the Scheme has been registered, indicating that the developer had reserved the right to add extra buildings or extend existing ones.

Although a Section 25 Right is quite rare, it’s important to know about it if it exists, as it might change the nature of the scheme you’re thinking of buying into.

  •     Assess the condition of the common property (e.g. brickwork, paintwork, plaster, gardens, driveways, lifts, swimming pool).

If these areas are in poor condition, it’s a good sign of poor management and high future expenses.

  •     Whether satellite TV is an option.

If not, it may be problematic to obtain agreement to introduce it and you are not allowed to install your own dish.

  •     How good the safety and security really is?
  •     The rules and regulations of the scheme.

Evaluate the rules to see if there is anything you would find difficult to comply to.

  •     The cost monthly levy.

It’s important to ask to see a copy of the latest audited accounts, paying particular attention to the financial reserves for future maintenance and repairs. A healthy reserve fund is a helpful sign of a well-run scheme.

  •     Check if there is any pending litigation against the body corporate.

Van Deventer & Van Deventer Incorporated - Sectional Title Scheme Attorneys Sandton

Van Deventer & Van Deventer Incorporated can assist your Body Corporate deal with the thornier issues of Sectional Title Scheme Management.

Read more on Sectional Title Development Schemes.

Get legal advice if you need to discuss yours.

Comments are closed for this post, but if you have spotted an error or have additional info that you think should be in this post, feel free to contact us.


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