PROPERTY: Sectional Title Properties Remain Popular in Gauteng
Recent Gauteng Business News
Sectional title properties remain popular in Gauteng because of the many advantages this form of property ownership offers. This is the view of John Herbst, national sales executive, Pam Golding Properties, who points out that the sale of sectional title properties make up a substantial 28 percent of all units (over the selling price of R10 000) sold in Johannesburg.
Many sectional title residential developments offer sound value for money and a well run complex can offer a sound return on investment over the long term, says Herbst. The fact that residents together contribute to the upkeep of the complex and the maintenance of facilities means that many sectional title developments are able to offer a high standard of living. The ability to share costs such as maintenance, water, insurance, security and garden services keeps the cost of living more affordable.
For the security conscious, sectional title developments are considered secure environments in which to live as many have access control, perimeter electric fences and other security measures in place. Residents find living in secure estates convenient in that they are able to literally lock up and go at short notice. They value community living, as well as excellent amenities such as clubhouses, restaurants, swimming pools, tennis courts and other facilities, offered by many sectional title developments.
Sectional Title Provides Exclusive Ownership
Herbst explains when you purchase a property in a sectional title complex you are buying exclusive ownership of the unit or section that you have purchased. At the same time you become a joint owner of the common property of the development. Depending on the type of property purchased, you may also be entitled to the exclusive use of a garden, parking space and staff quarters. Your section is usually a flat or townhouse and it may be situated within a gated community or estate. Herbst says sectional title schemes are strongly regulated by the Sectional Titles Act, which covers all aspects of owning this kind of property, affording any would-be buyer a good measure of protection.
According to Herbst the value of a sectional title property can vary considerably and depends on such factors as the size of the property, its general condition, how well it is maintained, how attractive communal areas are and what amenities are offered. Sectional title units can go on sale for anything between R280 000 and R50 million.
Sectional Title Owners- Part of the Body Corporate
Jason Shaw, manager of the Fourways/Dainfern office of Pam Golding Properties (PGP), says sectional title unit owners automatically become members of the body corporate when purchasing a property in a sectional title development. This is an association of titleholders, which has a say in the running of the complex including the maintenance of the common property. Trustees are elected to handle the day-to-day management of the sectional title scheme and protect the interests of owners.
Shaw says there is very often a direct correlation between how well the sectional title scheme as a whole is managed and maintained and the value of your property. It is therefore important that the body corporate and trustees are competent and well organised. Another advantage of the sectional title system is that you can become involved in the body corporate and in the running of your own sectional title development. Shaw says it is recommended that owners become actively involved in their body corporates and attend general meetings.
How to Invest in Sectional Title Property
Just how do you tell whether a sectional title scheme is well managed Shaw says there are a number of aspects to consider. Any would-be buyer is entitled to examine the books of the scheme to establish whether the development is financially sound and well governed. Does the development have a positive cash flow and is it up-to-date in its payments to creditors If it is heavily indebted and struggling to make payments, this would be a cause for concern.
Check whether insurance payments are up to date and that the policy offers proper cover, he advises. It is also important for you to ascertain whether the financials are correctly audited and budgets are properly drawn up. Without proper budgeting the viability of the scheme is placed in danger, as it may not be able to meet its financial obligations.
Herbst points out that the process of finding a suitable sectional title scheme to invest in is best undertaken with an experienced agent who understands the market and who has your best interests at heart. This will help to ensure that you choose a property that is right for you and that will grow in value.
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