Buying a home is a big step, however, in order to make sure that you get the perfect home for your needs, there are a number of important things to consider during your search, including what type of property you want to buy.
“In South Africa, the majority of properties are either freehold or sectional title,” says Abel Mngadi, Head of New Business and Sales at FNB. “With a freehold you have full ownership of the property including the land that it is built on, while with a sectional title you only own up to the middle or centre lines of the outside walls, the floor and the ceiling.”
If you own a freehold you will be responsible for all the bills and maintenance of the property you own which includes taxes, insurance, upkeep, electricity and water bills.
In a sectional title the administration and maintenance of the common property is the responsibility of the body corporate. The body corporate is made up of all the owners in the complex who then elect trustees to handle its day-to-day management.
“In a sectional title, each owner is responsible for paying a levy which goes towards the care of the complex,” says Mngadi. “This is charged over and above the normal rates, taxes, water and electricity and it is not optional; as part of your agreement you are agreeing to pay the levy.”
This fee will ensure that any of the common ground is maintained, including the roads, entertainment areas, gardens, outside walls and outside plumbing as well as insurance on the structure, fixtures and fittings on your home. In most cases, a body corporate will get a managing agent to run the complex to ensure maintenance and collection of fees.
“Also keep in mind special levies, which you are sometimes expected to pay which will go towards additional maintenance such as painting the complex,” says Mngadi.
There are instances where you can buy a cluster home, which is a freehold, but the parts of the complex are commonly owned, such as the roads and entertainment area and you will be responsible for a small fee on this.
Before buying a sectional title housing unit, take the time to look at the audited financial statements of the body corporate to ensure that the complex is well managed. This will help you avoid any problems when you want to sell or in some instances face a huge special levy bill after you have bought and moved into your unit.
“A sectional title home will ensure that you don’t have to worry about any additional maintenance to the property however, a freehold will give you more freedom as you don’t need to comply with body corporate rules, but it is up to you to decide what suits your lifestyle more,” concludes Mngadi.