By Sloan Wilson

Janaury 2019

 

The two most common types of title to immovable property are Sectional Title and Freehold Title. A freestanding house erected on a single erf in a residential suburb is normally held by freehold title whereas most flats, apartments and units in townhouse complexes are held by sectional title. Whilst both provide an owner with similar security of title, prospective purchasers should be aware that there are important differences between the two.

One of the most important differences is that the owner of a freehold property “manages and administers” the property himself or herself. With a sectional title property however the affairs of the sectional title scheme of which the unit (section) forms a part are managed and administered by the body corporate.

The body corporate is a separate legal entity of which each owner is a member. A body corporate comes into existence as soon as any person other than the developer becomes a registered owner of a unit. The body corporate elects trustees to carry out its obligations to manage and administer the scheme. The trustees accordingly bear the responsibility of the day to day running of the scheme including the collection of levies, payment of services (lights and water), maintenance of the common property, insuring the buildings and ensuring that the owners comply with the rules of the scheme. Schemes can be privately managed by the body corporate and the trustees themselves but many body corporates appoint managing agents to assist the trustees with the management and day to day running of the scheme. Managing agents are private enterprises which charge a fee for attending to the management of the affairs of the scheme. Some of the most successfully run schemes are those which are managed by competent and experienced managing agents with the active involvement of and supervision by the trustees.

Another important difference between freehold ownership and sectional title ownership is the fact that owners of sectional title units are obliged to observe the rules of the scheme. The law states that a sectional title scheme must be controlled and managed by the body corporate in terms of the rules.

There are two sets of rules applicable to schemes: management rules and conduct rules. The management rules deal with the management of the body corporate and the scheme and the conduct rules deal with the conduct of the owners and other occupants of the unit (tenants for example).

For example a conduct rule may stipulate that owners and occupiers may not keep pets in their section without the written consent of the trustees. An owner of a freehold property is not subject to such a restriction. Quite often purchasers of sectional title property are dismayed when they discover (only after having already purchased the property) that they will not be able to keep the family pet in their section. Prospective purchasers should familiarise themselves with the rules of the scheme prior to purchasing.