Five essentials for first-time sectional title buyers

Sectional title homes are the properties of choice for a large percentage of first-time homebuyers in South Africa – but while they generally offer excellent value, there are some other factors that buyers need to consider before they sign a sale agreement.

It is important realise that buying a sectional title unit also means joining an established community of homeowners who must all abide by a certain set of rules that don’t necessarily apply to freehold properties.

Therefore, prospective buyers need to establish what would be expected of them as owners in that particular sectional title building or complex – and what they could expect from their new neighbours.

Here are five essentials that buyers should consider when buying a sectional title property

  1. Check the physical condition of the complex

    As the first step in this process, buyers should check on the physical condition of the sectional title complex as a whole, bearing in mind that they will share ownership of the “common property” such as entrance halls, lifts, parking areas, the garden, and the security equipment, and be partially responsible for the maintenance and repair of these facilities via their monthly levy.

    They need to consider that if the complex is badly maintained, that is very likely to have a negative effect on the resale value of their home in the future – and in the meanwhile might mean that they have to pay a hefty special levy to cover some major repairs or refurbishments.

  2. Ask for the financial statements

    Next, buyers should obtain a copy of the most recent audited financial statements of the body corporate and the minutes of the most recent AGM, especially the chairman’s report.

    Buying a sectional title unit means buying into the assets and liabilities of the whole complex and you owe it to yourself to be informed about its financial affairs and operational status. If the levies are badly in arrears, for example, or the complex does not have a substantial reserve fund for unexpected expenses, you may want to look elsewhere.

  3. Make sure you know what you are buying

    You must make absolutely sure what it is that you are being asked to buy. For example, buyers might have been told that a parking bay belongs to a specific unit when it is in fact part of common property. Or you might not be told that because their balcony is actually an exclusive use area, they will have to pay an additional amount to the body corporate for its maintenance and repair.

    This could make a significant difference to the affordability of the property and thus the decision to buy or not.

  4. Check that the levy is correct

    The fourth thing for sectional title buyers to double-check is that the monthly levy quoted by the seller or the estate agent is correct. Ask to see the most recent levy account, and enquire whether there are any other charges payable that are not shown, such as a DSTv connection charge, parking fee, or special levy contribution. The latter is especially important as the introduction of a special levy that they cannot afford may well be why the current owners are selling.

  5. Make sure about the rules

    Lastly, buyers need to read the Conduct Rules of the complex. These apply to all residents and are the ‘nitty gritty’ of sectional title living. They will tell you, for example, if pets are allowed or not if there are noise restrictions, and how owners and tenants are expected to treat the common property – and together with the other information you have gathered, should give you a very clear picture of what it would be like to live in this complex if you were to buy the unit you viewed.

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