As owning a sectional title unit over a freestanding home is becoming more and more popular due to the rising costs of maintaining properties and the added security sectional title often offer, the number of sectional title schemes are increasing in South Africa and set to continue. But, says Johann le Roux, executive director of Propell, there are a few things that the prospective buyer should ask about or know, before signing an offer to purchase.
The sectional title unit bought is a section of a scheme, which is jointly owned by all the members. Some units do have the rights to use a particular area exclusively (the garden or parking, for example) but these areas are not owned by the buyer, they remain part of the common property.
Once the transfer of the unit goes through the owner becomes a member of the body corporate of the scheme, which gives the owner the right to vote at meetings and to have a say in the way the scheme is run. Every year the body corporate elects trustees to manage the finances and day to day management of the sectional title scheme and it is in the owner’s interests to become as involved as possible in all of what happens in the development.
The rules that govern a sectional title scheme are the prescribed management rules and the conduct rules. Management rules are there for the efficient running of the sectional title scheme and cover administration, accounting, insurance, elections, meetings, levy budgeting and collection. They can only be changed by a unanimous vote from all the owners at a general meeting. Conduct rules are there to govern owners and occupants, i.e. tenants, and they deal with issues such as pet ownership, parking, washing lines, etc.
The budget of the scheme relies heavily on all members paying their levies on time and in full so that the scheme can meet all its financial requirements. “If this is not done the trustees can call on companies like Propell to assist them in getting the financial situation back on track, but ideally the body corporate should be solvent and efficiently run,” said le Roux.
Without proper budgeting, the body corporate will not be able to pay its bills nor will it be able to keep the building and facilities in good condition. This leads to the building looking run-down and possibly losing value.
The types of levies are split into different categories: the monthly levy which covers normal expenses; the levies paid for exclusive use areas, and special levies – which are used for larger items that weren’t budgeted for originally.
“It’s important to note that on no account are you allowed to withhold your levy payments if you are unhappy with certain situations or the behaviour of certain trustees. This is the lifeblood of any scheme, and withholding payments just leads to additional administration and bad feelings among other owners who do pay their levies on time. It is also important, if you are buying, to check the financials and whether there is a chance that a special levy will have to be called for in the near future.”
In all complexes or apartment blocks, there are certain rules that will be set down and these usually cover:
• Pets in the complex - the scheme might not allow animals, and the buyer must not assume that this will be allowed or that his type of animal is accepted.
• Refuse disposal – some complexes have specific disposal procedures such as differentiating between recycling and normal wet refuse, they will also have certain days that the refuse should be taken out.
• Vehicles and parking areas are often contentious issues. There are usually allocated spaces, and owners and visitors cannot park in areas that are not for their use.
• Alterations to units – this is not allowed unless the permission to do so has been granted by the trustees. No changes may be made to common property and if the alterations to a unit affect the common property, they cannot be carried out.
• Signs or notices on buildings are not allowed unless the trustees have given permission for them to be displayed. This would include for sale or to let signs; and
• Laundry may not be hung in areas not specifically allocated for this use. Owners often hang laundry out to dry on balconies, not realising this is an infringement of conduct rules.
“Living in a sectional title scheme can be a good proposition if it is run well and has a healthy, thriving environment. The sharing of expenses such as security and lifestyle items such as swimming pools or gyms also make it a good option if this is what you are looking for. It is best, though, for all to be sure that they are able to live within the constraints and can stick to the rules to be able to live with neighbours harmoniously,” said le Roux.