Sectional title vs freehold ownership? When purchasing property, it’s crucial to understand the various property classes. A Title Deed is attached to every registered property and describes the type of property as well as any restrictions that may apply. In South Africa, sectional title and full title (also referred to as freehold) are the two basic categories of property. While sectional title living has become increasingly popular, the limitations of living under the authority of a body corporate or HOA might make buyers more hesitant about buying into a sectional title. Whether you’re in search of a secure townhouse or a sprawling suburban home, here’s a breakdown of all you need to know.
Contents:
- Sectional Title vs Freehold Ownership
- Freehold Ownership
- The Benefits of Freehold Ownership
- The Drawbacks of Freehold Ownership
- Sectional Title
- The Benefits of Sectional Title
- The Drawbacks of Sectional Title
Sectional Title vs Freehold Ownership
To differentiate between sectional title and traditional freehold property ownership, it’s essential to define them.
Freehold Ownership
Freehold or full title ownership means having complete ownership rights over a specific property. This encompasses the land and any structures on it. The property owner will hold a title deed in their name which is registered at the deeds registry. As such, the title deeds will serve as proof of property ownership. The buyer of this property is responsible for registration, transfer fees, and other related costs, including rates, insurance, property maintenance, and utility bills.
The Benefits of Freehold Ownership
Independence
Freehold property owners are in complete control and are financially responsible for the property in its entirety. This means that you are at liberty to modify your home however you choose as long as you have received planning approval from the relevant authorities.
More Space
Freehold properties typically have larger grounds compared to sectional title units. Since you are not buying a part ownership of the property, the entire plot on which the property stands belongs solely to you. This often translates into larger gardens and more space between you and your neighbors.
The Drawbacks of Freehold Ownership
Less Security
With freehold properties, owners are entirely responsible for their security – you need to pay to secure the perimeter, and often for an armed response security company to be on call should an intruder enter the premises.
Varying Costs
The overall upkeep of the residence, including the pavement, garden, and exterior, is the responsibility of freehold property owners. Unlike the levies paid in sectional titles, freehold properties have varying costs difficult to budget for.
Sectional Title
Sectional title ownership differs in that only a unit in a building or complex is purchased and full ownership rights may be exercised in relation to that unit only. Additionally, the buyer gains an undivided share in all communal areas of the development. Similar costs are involved as with freehold purchases, including registration, transfer fees, rates, and utility bills. Most sectional title developments offer excellent security around the perimeter and at the entrance, which is covered by the monthly levies.
The Benefits of Sectional Title
Security
Most sectional title developments have excellent security around the perimeter and at the entrance of the development, which is all included in the monthly levies. As compared to freehold property, owners of sectional title units live close to their neighbors.
Communal Living
When compared to freehold neighborhoods, communities living in sectional title schemes have tighter-knit communities and create significantly more connections with neighbors.
The Drawbacks of Sectional Title
Lack of Freedom
The body corporate or HOA restricts owners of sectional title units from making alterations to their homes. Before they can start renovating, those who desire to do so must first acquire consent from the body corporate. You will also need to adhere to the management and conduct rules established by the body corporate.
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