What is a Sectional Title? See Google Definition
A misconception people often have, is that when they register a bond for a Sectional Title that often think it falls under something called a sectional title home loan This is incorrect! A bond or loan for a sectional title property falls under the ordinary loan category, however a Sectional Title does fall under “Types of Properties”.
If you decide to buy an apartment or townhouse, the majority of these will be sold under sectional title ownership. Not only do you get to buy your own apartment and area, you also become part of something called the Body Corporate. What this means is that you’re buying into “Communal Ownership” where the decisions made are decided by a majority vote of unit holders or the body corporate.
A monthly levy is paid to meet the rates, taxes, maintenance, insurance and other operating maintenance costs within the complex. This levy is usually a fixed cost which does increase from time to time. Some tips that can be used when looking to purchase a property that falls under the sectional titles act are:
- Check you monthly levy amount. Sometimes these can be astronomical! Ask what this is broken up into and when the last increase was made.
- Check the financial position of the body corporate. Always good to check! You never know.
These days majority of your properties in South Africa are now sectional title. Why you may ask? Well with security playing a major role in South Africa we’re often forced to buy properties where security of or family is priority 1. Sectional Title units often offer a security guard and access control for the complexes.