Traditionally in South Africa, one purchased land and then whatever was built on the land became your property as well. This changed, however, with the introduction of the Sectional Titles Act.
The Sectional Title Act
The Sectional Title Act 95 of 1986 made it possible to have ownership rights in a unit in a complex, although one did not necessarily exclusively own the land on which it was situated. In Other words you could own a flat on the third floor of a building, and every other flat could have a different owner.
Sectional Title Developments
A sectional title development will include sections (which are available for sale by way of sectional title), common property, such as stairways and lifts, which will be owned by all the section owners jointly, and exclusive use areas which are portions of the common property which have been demarcated and may only be used by the owner of a particular section e.g. gardens or parking bays.
The Body Corporate
All section owners become members of a Body Corporate which is the governing body of the sectional title scheme. Save for extraordinary business, the Body Corporate will meet once a year to elect trustees. The trustees will then form the executive of the sectional title scheme and will attend to the day-to-day running of the affairs of the scheme, such as employment of maintenance staff, upkeep and collection of levies.
Levies
Levies replace municipal rates or rental and are payable monthly by each section owner to the Body Corporate and are used by the Body Corporate to meet the costs of running the scheme e.g. payment of municipal rates and upkeep of the common areas. Levies are usually set annually. The amount payable by each section owner will vary according to his participation quota.
Participation Quota
The participation quota is a calculation of the percentage of the section owner's property vis-a-vis of the entire sectional title scheme.
Owning Sectional Title Property
The section owner will be responsible for the costs of maintenance and upkeep of his section and any exclusive use areas he may have, whilst the Body Corporate will be liable for the costs of upkeep and maintenance of the common property.
Buying Sectional Title Property
Buying into a Sectional Title complex, you need to be aware that you will automatically become part of a community of sectional title owners. You will have to abide by certain rules and regulations which never apply in a full title house. So before you put pen to paper and sign the Offer to Purchase that beautiful little unit which will finally let you have the "lock-up-and-go" lifestyle you've always wanted, make sure you know what will be expected of you - and what you can expect from your new neighbours.
Be sure to read the Conduct Rules for the complex. Conduct Rules apply to all residents of the complex and are the foundation for peacefully living in a sectional title complex. They will tell you, for example, if pets are allowed or not, if there are any noise restrictions, and how owners and tenants are expected to treat common property.
Make absolutely sure what you are being sold. Double-check if that parking bay "belongs" to a unit, as you were told. It may in fact be part of the common property. In such a case, you might only realise that "your parking" is actually only available on a first-come first-served basis once you move in.
Make absolutely sure that the monthly levy quoted by the seller or estate agent is correct. Find out if there are any extra monthly charges payable, such as an Mnet or DSTv connection charge, a special security levy, or parking charges. Ask to see the current owner's levy account.
Check on the physical condition of the complex as a whole. If it is not well-maintained, a hefty levy increase or a special levy may be coming.
Ask for a copy of the last audited financial statements of the body corporate. Buying a sectional title unit means "buying into" the assets and liabilities of the whole complex. You owe it to yourself to be informed about its financial affairs. Large levy arrears or unpaid municipal accounts spell trouble, as does the lack of an adequate reserve fund for unexpected expenses.