Sectional Title: What you need to know

Sectional Title ownership is a specific type of property ownership and there are some key things you need to know before you decide to buy a home in a Sectional Title (ST) development.

"There has been a clear upward trend in ST purchasing over the past few years, and this shows no signs of slowing down," says experienced ST agent, Maria De Villiers. "ST homes are generally a great way for first-time buyers to get into the property market or for investors to acquire rental units However, prospective buyers need to be aware of the ways in which they differ from freehold properties.

What is Sectional Title?

Sectional Title is a form of property ownership that allows multiple individuals to own homes such as apartments in a single complex or building. Each buyer owns the interior of their home or unit and an undivided share of common property such as the building exterior, stairwells lifts, walkways, courtyards, parking areas and gardens. In ST complexes, all decisions about the management and maintenance of the common property are made collectively, usually by a number of trustees elected by the owners.

The concept of Sectional Title was introduced to SA in 1986 as per the Sectional Titles Act No.95 and has since become a popular form of property ownership. Today it is recognised as one of several types of community housing scheme in SA.

Differences between ST and freehold homes 

Freehold properties are those where buyers acquire exclusive ownership of a home and the land on which it is built. Such properties can be located either in traditional suburbs or in those gated estates that are run by Homeowners Associations (HOAs).   If you own a freehold home, you generally get to make your own decisions as regards the use of your property, such as what colour to paint it, what type of security to install and what trees or flowers to plant in your garden, although this freedom can be somewhat curtailed in an estate where the HOA has the power to try to maintain a homogenous appearance. Freehold properties should not be confused with free-standing properties, which can be either ST or freehold. 

What are the advantages of ST?

ST ownership offers the following benefits:

• Enhanced security - Most ST complexes and buildings have comprehensive security measures in place. Additionally, having neighbours close by makes for a safer environment. 

• Communal living - On the subject of neighbours, ST complexes can offer that "village feeling", which many modern home buyers are searching for. With clubhouses or common areas coming with the territory (literally), interaction with fellow residents is guaranteed. 

• Affordability - One of the main advantages of ST ownership is that it allows individuals to own homes in areas where freehold properties may be unaffordable or unavailable.

What are the responsibilities of ST owners?

Owning an ST home comes with a number of responsibilities, one of the most significant being the payment of a monthly or annual levy to cover the cost of managing and maintaining the complex and its common areas. Levies are determined by the body corporate, which is a collective of all the homeowners in the complex. The body corporate also elects the trustees who are responsible for the day-to-day running of the complex.ST owners are, however, responsible for ensuring that the interiors of their individual units are well-maintained and comply with the rules and regulations set out by the body corporate.

What are the potential drawbacks of ST?

One drawback of ST ownership is that owners have less individual control over the use of their property than they would with freehold properties. They have to obtain permission from the body corporate before making any additions or alterations to their units, and they have to comply with all the management and conduct rules of the complex.

Additionally, ST are more prone to disputes between neighbouring owners, particularly when it comes to issues such as noise, pets and the use of common areas. It is thus important for potential owners to carefully consider whether they are willing to live in close proximity to others before purchasing an ST home.

ST can be a great way to own property in SA. However, it's important for prospective buyers to carefully consider the responsibilities that come with ST ownership as well as the potential drawbacks so that they can make an informed decision about whether ST ownership is right for them.

If you're interested in purchasing an ST home, contact a Chas Everitt estate agent  experienced for the best advice on how to get started.