Five tips for buying a sectional title unit
Sectional title ownership is largely misunderstood by many prospective buyers who are not fully aware of what shared ownership of common property schemes entails. David Rebe, CEO of Sandak-Lewin Property Trust, says that it is therefore pertinent for first-time buyers to understand exactly what sectional title ownership entails, including the legalities and responsibilities of common property.
“First and foremost, it must be understood that while the individual unit itself is personally owned, the common property areas are all shared. It is important for first-time sectional title buyers to know that they are essentially buying into a community where the trustees and the body corporate are involved the decision making processes regarding the communal property,” he stresses.
Rebe provides the following five tips for first-time buyers entering into a sectional title scheme:
- Assess all costs: First-time sectional title buyers should be aware of costs relating to ongoing repairs and maintenance to common property. Ongoing shared costs include levies, a monthly contribution towards the running and maintenance of the complex or building, and municipal rates and taxes. There are also ad-hoc, shared costs which contribute towards funds needed for irregular maintenance, including refurbishments and security installations or repairs.
- Investigate hidden costs: First-time sectional title buyers need to be aware of any hidden costs which fall into part of the scheme i.e. the deposit needed for the council to connect electricity and water in the unit, as well as knowing whether any renovations to common property are in the pipeline, which the new property owner may be required to contribute towards.
- Know what you are covered for: Under body corporate insurance, which the owner contributes to through monthly levies, units are usually covered against fire, lightning and explosions, along with items of a common nature and permanent fittings including geysers and walls.
- Know your obligations: As a sectional title owner, it is important to understand the various obligations to be adhered to, including making sure the property meets certain minimum standards such as ablution facilities and hot and cold running water to name a few. Other obligations include repairing and maintaining the structure of the property and making sure the property is insured properly.
- Understand the financials: It is pertinent for the owner to research and fully understand the financial status of the sectional title scheme. Should the financials be in disarray, the owner can find himself responsible for servicing any existing debt. The owner has the right to access such information from the body corporate or managing agent, and should request the minutes of the last annual general meeting (AGM) to assess the scheme’s history.