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Sectional Title Schemes need not be a nightmare!

Many of our clients have trouble understanding the intricacies of a sectional title scheme. In our next few articles we will endeavor to give you some insights into this form of property ownership which will hopefully allay your fears when negotiating a deal for the purchase of a sectional title unit.

The Sectional Title Act 95 of 1986 makes it possible for different persons to each own a portion of a building for example, if a multi-story block of flats is developed as a sectional title scheme, each apartment in the building can be owned by a different person. The land itself, as well as staircases, corridors, lifts, communal washrooms, etc. are common property and are owned jointly by the owners of the apartments in the building.

The Act does not restrict the purpose for which a building can be used. Office blocks, shops, holiday apartments, etc. can therefore be developed as sectional title schemes. It is also not a requirement that the offices, shops, apartments, etc. be physically joined together; a sectional title scheme can comprise free-standing buildings (e.g. townhouses) on a property. The buildings must, however, be of a permanent nature.

A purchaser in sectional title scheme buys a unit in the scheme. He becomes sole owner of his office, shop, apartment, etc. (as the case may be) and joint owner of the common property. As a general rule, the common property can be used and enjoyed by all the owners except if a certain portion, such as a carport, staff quarters or storeroom, is reserved for the exclusive use of a specific owner.

A sectional title scheme offers many advantages. It not only gives less affluent people the opportunity to acquire affordable housing, but also appeals to the up-market purchaser who requires accommodation of a high standard offering security and easy maintenance. Since a sectional title purchaser acquires ownership of his unit, security of title is assured. Mortgage bond financing can also be arranged since a sectional title unit constitutes immovable property.

Reference: EAAB

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