The pros and cons of buying into a sectional title scheme
Weighing up whether you want to buy into a sectional title scheme is at least part of the determination in selling your freehold home nowadays, as it is a choice for first-time buyers. Jan Davel, MD of the RealNet estate agency group, puts you through the hoops as to whether it’s the right choice for you.
Sectional title homes, he says, currently account for just 12% of SA’s total residential stock, according to the latest available figures from Absa, but there seems little doubt that this percentage will grow substantially in the next few years as more and more local homebuyers follow international trends and opt for apartments and townhouses instead of traditional freehold homes.
He points out that sectional title units already account for more than a third of all home purchases in major metros such as Johannesburg, Pretoria and Durban, and at least a quarter of home purchases in the City of Cape Town.
“What is more, although many buyers in this sector are first-timers looking to get a toehold in the property market or young professionals looking for a glamorous apartment in a newly-trendy inner-city area, their numbers are increasingly being supplemented by middle-aged buyers who are seeking to downscale in style from freehold homes that no longer offer them the security or the lifestyle they want.”
It is thus no surprise, he says, that flats and townhouses now also account for more than a quarter of all new home building – or that a lot of this construction is in the luxury sector, with many very wealthy buyers now choosing to live in multimillion-rand apartments in Sandton and other business hubs instead of in suburban mansions surrounded by acres of manicured lawn.
“However, it is important to remember that buying an apartment isn’t the same as buying a house. You won’t have the same freedom to build-on or expand, for example. If you own an apartment or townhouse, you can’t just decide to alter the size of your home without going through a whole process involving your neighbours, the body corporate of your sectional title scheme and quite possibly, the Surveyor General.”
Similarly, says Davel, although you will be entitled to paint the interior walls of your home, you will usually not be allowed to change its exterior appearance in any way – and you may not be allowed to plant a garden, keep a pet or put up a carport in front of your garage.
“On the other hand, though, a sectional title scheme that is well run by a strong body corporate can provide homeowners with considerable convenience and peace of mind. The maintenance of the building or complex will be paid for out of the monthly levies, as will the homeowners’ insurance, upkeep of the common areas and security provisions.
“This levy can seem expensive at first and even put you off buying a sectional title home but you need to consider that you would probably spend at least the same amount for indoor and outdoor maintenance on a freehold home and garden, without even taking the additional security into account.”
Davel says, however, that because collective decision-making through the body corporate is a fact of life when you live in a sectional title complex, you should be prepared for the fact that disputes can and do arise over the way levies are calculated, administered and spent and whether the development is being maintained and run in a way that will protect the value of each owner’s home.
“Consequently, those considering buying into a sectional title scheme must ensure that they can handle living in close proximity with other owners – some of whom may not be as friendly or considerate as they would wish – but also that they are prepared to abide by the decisions of the body corporate, even if they don’t always agree with them.”
Alternatively, he says, those who intend becoming trustees so they can play a role themselves in the running of their complex and the decision-making about how their levies are spent, should be prepared to familiarise themselves with the reams of legislation, rules and regulations that govern sectional title.