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Buying sectional title: what to check first
When you buy a sectional title unit, you own your section and share the common property, so you also share the costs and the risks. Before you sign, ask for the levy, the scheme’s financial statements, the reserve fund balance, the minutes of recent meetings and the rules. A low levy can be a warning rather than a bargain, and a scheme in trouble becomes your problem on the day you buy.
What you are buying
Sectional title means you own a specific unit, such as a flat or a townhouse, plus an undivided share in the common property: walls, roof, gardens, driveways and shared facilities. The body corporate is the legal body made up of all the owners. It is run by trustees, who owe the owners fiduciary duties, meaning they must act honestly and in the interests of the scheme.
Check your offer for exactly what comes with the unit. Parking bays, gardens, balconies and storerooms are often exclusive use areas, which you can use but do not own. The offer and the plan should say which ones are yours.
Money: levies and funds
Each owner pays a monthly levy. The Sectional Titles Schemes Management Act requires a body corporate to keep an administrative fund for daily running costs and a reserve fund for large future repairs, such as repainting or re-roofing.
The regulations set a minimum for the reserve. If the reserve is below 25% of last year’s administrative contributions, the budget must set aside at least 15% of those contributions. From 25% up to below 100%, the budget must set aside at least the amount budgeted for repairs to the common property. At 100% or more, there is no minimum.
Ask for:
- The current monthly levy and what it covers. Ask whether water, electricity, security or insurance are included.
- The most recent financial statements and the current budget.
- The balance of the reserve fund.
- Any special levies raised in the past few years or planned. A special levy is an extra charge for a big expense.
- Whether any owners are in arrears, and by how much. Many owners not paying puts strain on the scheme.
Read the figures with care. A levy that looks cheap may mean the scheme is not saving for repairs, and a big repair may come as a special levy. Add the levy to your bond repayment to see the true cost. Try the affordability calculator and read the monthly costs of owning a home.
Documents to ask for
- The scheme rules. These cover pets, noise, parking, renting out, renovations and what you may do with the outside of your unit.
- Minutes of trustee and general meetings. Read the last year or two. Look for disputes, unpaid contractors, planned repairs, legal action and complaints.
- Insurance. Ask what the body corporate insures and what you must cover yourself. Our guide to homeowners insurance helps.
- Building condition. Ask about roof, plumbing, lifts, waterproofing and any known defects, and about work done or still to do.
- The sectional plan. It shows the boundaries of your section and the common property.
Rules, disputes and clearance
Some schemes limit pets or short-term letting. If you plan to rent out the unit, check that the rules allow it. The Community Schemes Ombud Service (CSOS) handles disputes in community schemes, including levies, behaviour and governance. An application to it carries a fee.
When the unit is sold, the body corporate must issue a levy clearance. Under the Sectional Titles Act, it confirms that all money due is paid or provided for, and the conveyancer certifies this to the Deeds Office. Without it, transfer cannot be registered. The seller must settle any arrears so the clearance can be issued.
Practical checks on the visit
- Walk the common areas: roof, stairs, parking, gates, gardens and the rubbish area. Poor upkeep shows quickly.
- Look for damp on the ceiling, particularly on the top floor, and for damp in the walls on the ground floor.
- Talk to the neighbours and, if you can, a trustee.
- Ask about noise, parking problems and security.
- Compare asking prices with the price per square metre calculator, using the unit size on the plan.
What to do next
- Ask the agent for the levies, financial statements, rules and minutes before you make an offer.
- Go through our viewing questions.
- Read the offer to purchase: what to check and browse sectional title homes on PropertyNow.
This article is general information for South African readers, not legal, financial or tax advice. Rules and rates change, so check your own situation with an attorney, your bank or a tax practitioner. Our property calculators can help you work out the numbers.