Sectional Title Explained

Sectional Title Explained

Buying a home in South Africa can take on a few different forms, the two the main types being a freehold or full title and sectional title properties.  Often these concepts can get confusing but once you understanding the difference you will be better equipped when choosing the best type of property for your specific needs.

Full title properties are properties that described the transfer of full ownership rights when you own a property, which includes the building and the land it is built on, these include free-standing houses, cluster houses and houses used for businesses as well as smallholdings.

Sectional title properties are properties with separate ownership of units or sections within a complex or development. So when you purchase a townhouse in a complex for example, you are purchases a section or sections and an undivided share of the common property, collectively referred to as units. Sectional title properties include mini subtype houses, semi-detached houses, townhouses, flats or apartments and duet houses.

In a sectional title scheme or complex as it is also commonly referred to, owners are obligated to pay levies, usually according to the size of their units.  The levies are calculated in accordance with a budget, which is prepared annually by the trustees or managing agent.

Sectional Titles can be seen as an affordable investment that will yield a great future return on investment.

Advantages of sectional title scheme ownership include:

  • Unlike freehold properties, where the owners have to pay for their own home insurance and for the upkeep of the pavement, garden and exterior of their homes, owners of sectional title units pay a monthly levy instead.
  • Owners of sectional schemes usually only need to pay for their rates and taxes, insurance for the contents of their home, their own private gardens and for their monthly electricity and water consumption.
  • Sectional title developments generally have good perimeter and entrance security, which is usually included in the monthly levies and allows for a greater sense of security.

Disadvantages of sectional title scheme ownership include:

  • People who invests in a sectional title scheme will own part of the scheme, meaning that the owner has invested in and is part of a small community. As a result, they will need to comply with the management rules and conduct rules as determined by the body corporate.
  • Owners of sectional title units also do not have the freedom to alter, renovate or expand their sections without the approval of the body corporate.

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