What are the differences between sectional title and full title ownership?

Sectional-Title-Insurance

Most young people moving away from their parents’ homes are not able to finance the purchase of a property. They are mostly found renting a property in one of the many townhouse complexes.

Home Insurance and Household Insurance

We would like to discuss, on Insurance Chat, the difference between the types of home ownership and the impact that this has on Insurance. With this in mind we have approached Ashleigh Van Greunen, an expert on sectional ownership, to guide us in a series of posts. We would like to start by clearing a few uncertainties and focus on the difference between Sectional title and Full title:

Sectional Title v Full Title

The question is often asked what the difference is between a sectional title unit and a full title.

Firstly, Sectional Title is a form of land ownership where various owners can own a certain piece of land on which a complex is built and each owner then owns a specific section in this complex, being a flat or townhouse.

The section he owns plus his undivided share in the common property is then called his unit. The section owners collectively own the common property and share all rights and responsibilities such ownership entails.

Full title, on the other hand, is a form of land ownership where an owner owns a certain piece of land, the buildings and other improvements thereon and the owner accepts all rights and responsibilities of the property and does not share this responsibility with anyone.

When buying into sectional title, you become a member of the body corporate. This is a legal entity owning and controlling the common property in the sectional title scheme. The body corporate receives funds from all section owners by means of levies, which are used to pay for the expenses of the sectional title scheme. These expenses include maintenance, utility bills, services, etc. Levies are calculated according to the size of section a person owns and is usually determined by the members of the body corporate.

Why buy into sectional title if the property does not belong to you in totality? Why share with so many other owners and not being able to make decisions regarding your unit and then attending all those meetings?!

Advantages and Disadvantages of Sectional Title

Sectional title has its advantages and disadvantages and we will mention but a few:

• Sectional Title owners share the responsibility in payment of the body corporate’s expenses;

• Costs are lower, as these are shared between all owners and not only one in particular;

• Sectional title units are very popular in the rental market and are usually leased out easily;

Some disadvantages are:

• Owners cannot extend sections without the permission of all the other owners;

• All owners are jointly and separately responsible for any expenses and debts incurred by the body corporate, which means that if someone else does not pay, it becomes your problem too!

• There are always rules to follow;

In conclusion, when deciding to buy into sectional title, remember that you are buying into a “partnership” with other owners and you need to understand exactly what you can use your unit for, and how you can use it, without creating a conflict situation with your neighbours.

We will also, in other posts, focus on sectional title insurance and the responsibilities of trustees.

[A word of appreciation to Ashleigh from Omni Estates]

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7 comments “What are the differences between sectional title and full title ownership?”

I own a sectional title property which is occupied by my 85 year old mother. There are 33 properties on the estates – each on the same land size but the size of the buildings vary significantly. My property size is 120 sq. metres and others occupied by families (+/- 6) are 250 sq. metres plus. Everyone pays the same levy of R1475 pm which is to increase to R1700 pm.

My question is: how is the levy calculated? If it is by ‘section’, how could this scenario be fair? Any assistance would be greatly appreciated. Thank you.

Subject to the provisions of subsection (4) of section 32 of the Management Rules, the quota of a section shall determine, further subject to the provisions of section 37 (1) (b), the proportion in which the owner of the section shall make contributions for the purposes of section 37 (1)(a), or may in terms of section 47(1) be held liable for the payment of a judgment debt of the body corporate of which he is a member;

Section 37 (1) (d) to be read in conjunction with section 37 (1) (a), however, it reads as follows: to raise the amounts so determined by levying contributions on the owners in proportion to the quotas of their respective sections;

To change the calculation and method of levying the contributions, the management rules of the scheme need to be changed, of which an unanimous decision will be needed at a Special General Meeting.

Kind Regards,
AC VAN GREUNEN
OMNI ESTATES

Hie AC

Which ownership system is safer; the share ownership system where a company owns the property which is then divided into shares, or where ownership is governed by sectional title?

Regards,

Kayn

Hi there, i need to know if it is posable to have the common area in your back yard made to be your own property,and how to go about it

Regards Brian

The Trustees have increased the monthly levy for the Parking Bay by 30%. (R100 to R130). The garage and apartment have been increased by a reasonable 8%. The Bay is simply an open space designated by lines, and is not under cover. Apparently this increase is to bring the levy in line with other buildings’ parking bay levies. Is this a valid reason for the Trustees to impose this 30% increase? Up to now, the parking bay levy has always increased in line with the apartment and garage levies.
Any input would be appreciated.


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