Are you considering buying into a sectional title scheme, but are not sure whether sectional title ownership is the correct option for you? If this is the case, it is important to consider both the benefits and the potential drawbacks of sectional title ownership. This then should help you decide whether sectional title ownership is for you. This list is not an exhaustive list of all the pros and cons.
What is sectional title ownership?
When a person buys into a sectional title scheme, the buyer purchases one or more sections of a complex or development and an undivided share of the common property. Townhouse or apartment complexes are two examples in which a sectional title scheme would exist. Within such complexes, the common areas would include parking areas, roads and perimeter walls. The exterior of the building is also considered part of the common property.
Benefits of sectional title ownership
- You share the major costs involved with the upkeep of the property as well as the municipal costs.
- There is a major benefit of security. You live in close proximity with more people around, which adds a greater sense of security. What is more, there are generally security facilities at the entrance of the complexes and high walling around the complexes.
- You get access to amenities that you might not be able to afford if you bought a freestanding unit, such as pools or tennis courts. Costs related to these amenities are shared.
- You are not responsible for the management and maintenance of the communal areas. An appointed managing agent takes care of these things so you don’t have to. You just pay a monthly levy that pays the costs.
- You pay less for a sectional title unit compared to a freehold house. This is not always the case because prices of properties differ from area to area. However, this generally is true.
Drawbacks of sectional title ownership
- A sectional title scheme comes along with various sets of rules and legalities regarding the body corporate, your own section, management of the complex, conduct and common property. It can be difficult to understand your rights and responsibilities regarding these, especially so if the rules are conveyed in an ineffective manner.
- Sectional title rules may change and this is not under your control. You may not be happy with the changes made, but you do not individually have the power to reverse the changes.
- You do not have the freedom to alter your unit externally without first obtaining approval from the body corporate.
- If owners do not pay their levies timeously, the body corporate might not have enough money to meet its financial obligations. A sectional title scheme with poor financial health becomes the problem of you and the other owners through higher future contributions.
Sectional title ownership: Your decision
These are some of the pros and cons related to sectional title ownership. Hopefully these considerations can help you decide whether you want to buy into a sectional title scheme or not. If you require any assistance in any matter related to the above, please do not hesitate to contact us at email@example.com.