Sectional title property: what to know before you buy

Homes come in all shapes and sizes. On the property hunt, you’ll find different types of ownership. Sectional title properties, in particular, have risen in popularity in South Africa. 

In fact, Lightstone research reports sectional title scheme transfers accounted for 30.7% of all transfers in 2021. That’s a large number of people choosing sectional title living: retirees downsizing, families opting for convenience and security, and professionals choosing a lock-up-and-go lifestyle. If this property ownership type is on your radar, this is the guide for you. 

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What is a sectional title property?

A sectional title property is defined as a unit or section within a complex or development (scheme). When you buy into a sectional title, you take ownership of a section or sections of the complex/development and an undivided share of the common property. Different types of sectional title properties include townhouses, flats or apartments, and duet houses. Each sectional title scheme will consist of three elements:

• Owners’ sections: These are the houses or apartments within a scheme that are individually owned and registered in the owners’ names. These sections are defined by the sectional plans filed in the Deeds Office. 
• Exclusive use areas: These are parts of the common property in which you (as an owner) pay a levy to enjoy the exclusive right of use. Some examples of this can include parking bays, gardens, storerooms, and balconies.
• Common property: This is the remainder of all of the land that comprises the scheme. It is owned by all the sectional title owners collectively and can include pools, communal gardens, driveways, and lifts.

Sectional title properties are often contrasted with freehold or full title ownership. In comparison, freehold is a more traditional form of property ownership. With this type, you own the entire property including the building and the land it is built on. Freehold properties can include freestanding houses, cluster houses, and smallholdings. 

How do sectional titles work?

When you buy a sectional title property, you automatically become a member of the body corporate, the collective name for all the owners of the scheme. You will be responsible for paying a monthly levy for the upkeep of the common area/s. This can include security, maintenance, utilities, staff salaries, and insurance.

Body corporates often elect trustees; these are members of the body corporate who are chosen to represent the body corporate and ensure the sectional title scheme is run and managed efficiently. 

Naturally, the workings of a sectional title scheme can be complex. The Sectional Titles Schemes Management (STSM) Act, No 8 of 2011 was established to provide rules applicable to such schemes. As part of the Act, the Community Schemes Ombud Service (CSOS) was created to regulate the conduct of parties within community schemes. Sectional title body corporates can also hire the services of a managing property practitioner to ensure the scheme is run smoothly and remains legally and financially sound. 

Is a sectional title property a good investment?

Like all property ownership types, determining if a sectional property is worth it depends on your unique needs. It’s important to weigh the pros and cons to figure out if living in a sectional title scheme is a perfect fit. 

Advantages of sectional title properties:

• Affordable properties: Generally, these properties are more affordable than freehold properties. You can potentially live in a desirable area without the heavy price tag. Property taxes are also lower than freehold properties.
• Access to amenities: You will get to use a variety of sports and leisure facilities you may not be able to afford as a freehold owner. This can include pools, tennis courts, and jungle gyms. You only pay a fraction of the costs as maintenance is shared by the body corporate. 
• Security: Depending on your sectional title scheme, you can enjoy top security features such as boom gates, access-controlled entrances, electric fencing, and armed response patrols. Plus, living in close proximity ensures there’s always someone nearby keeping watch or able to respond in an emergency. 
• Property management: Because the general upkeep of the sectional title scheme is shared, it can take a load off your shoulders. Plus, you’ll benefit from the experience and network of a shared community when it comes to sourcing maintenance and repair services. 
• Shared costs: Your monthly levy will cover the upkeep of common areas, the scheme’s staff salaries, and services such as security, landscaping, and maintenance. This can make sectional title living more affordable than if you were dealing with these costs by yourself. 
• Popular property type: Because of the many benefits of living in sectional title schemes, this property ownership type is desired by buyers and buy-to-let investors. It can be an easy choice for a future sale or letting opportunity.
• Curb appeal: Depending on how well the scheme is managed, your property will enjoy curb appeal. Schemes generally have rules governing the exterior of the property, so you can expect properties to have a consistent look and feel, guaranteeing their visual attractiveness.
• Communal living: Because sectional title schemes place residents in close quarters, you can expect greater interaction with your neighbours. It’s common for close-knit communities to form from sharing news over the fence, having child play dates at the pool, or addressing scheme developments at meetings. 

Disadvantages of sectional titles

• Lack of freedom: Within a sectional title scheme, you have to adhere to the rules and regulations of the body corporate. In contrast to freehold properties, this can be restrictive if you enjoy independent living. For example, you may find it frustrating not to be able to make external changes, adopt a new pet, or host an event without first getting permission. 
• Body corporate mismanagement: With full title ownership, you are responsible for the management of your home’s finances. However, in a sectional title scheme, the body corporate holds this responsibility. If this isn’t managed correctly, you (together with all the other owners) will be liable for any debts created. 
• Majority rules: Rules and regulations can change; as an owner, you may not be happy with the updates and find it difficult to reverse the decision as an individual to suit your needs. 
• Restrictive/complex regulations: In a sectional title scheme, rules and regulations are meant to ensure all residents live harmoniously. However, the legalities can be difficult for owners to understand and adhere to, especially when changes are made. 
• Communal living: On the flip side, living in close quarters to others can be a source of stress rather than a benefit. Neighbourly disputes are a common occurrence in sectional title properties ranging from noises to parking issues.
• High costs: While it may be more affordable to live in a sectional title property as costs are shared, the levies may still not be within your budget. Levies are also subject to increase year-on-year so you will need to be aware of this when buying. The body corporate can even implement a special levy to cover costs for projects, maintenance, and repairs that fall outside the monthly levies. 

As with any property ownership type, buying a sectional title property is a significant investment. It’s important to consult with a property professional who can help you understand whether it’s a good option for you — and find the right sectional title scheme that meets your requirements. 

Where to find sectional title properties for sale

Partnering with a leading real estate brand is the key to finding your dream sectional title property. Seeff has a range of property professionals with the experience to help you succeed. To browse this type, simply visit our website and choose from our wide range of townhouses, apartments, duets, and other sectional properties in the location of your choice.