Real Estate Investor Magazine South Africa April/May 2019 | Page 10

Q&A
The Ultimate Checklist for
Sectional Title buyers
GAYE DE VILLIERS
Top tips for sectional title first-time buyers
Zerlinda van der Merwe, specialist community schemes
consultant and general manager of Pam Golding Property
Management Services, says that with sectional title residential
property increasingly sought after, there are a number of
obvious, as well as less obvious questions you need to ask,
including those you will wish you had asked when issues arise
later on.
3 P's of sectional title
Request a copy of the conduct and management rules of the
body corporate, which regulates all aspects of communal
living, including the three P's of sectional title, namely "Pets,
Parking and People.
Firstly, ensure that the rules you are given are the correct
version of the rules and have been properly approved by the
members and either registered at the deeds office or reviewed
and approved by the Community Schemes Ombud Service
(CSOS).
Financial status of body corporate
The next step is to establish the financial status of the body
corporate in the complex you are buying into. Take a look at
the audited and trustee approved financial statements of the
body corporate, as well as the member approved administrative
and reserve fund budgets.
You need to ask the question as to whether a special levy
has recently been raised or if this in progress, as you will be
liable for contributing to same from the date of registration of
transfer of your unit in the scheme. Find out the reason for the
special levy, the amount raised and the duration that it will be
recovered from members.
Take a look at whether many owners owe the body corporate
outstanding levies, and whether legal action has been taken
by the body corporate to recover these debts. As a potential
member of the scheme, you are entitled to this information, so
make sure that you are asking the right questions and receive
the relevant answers.
5 steps to understanding the sectional plans
Although it may at first glance seem to be quite complicated,
understanding the sectional plans of the scheme is relatively
simple. These plans will offer a 'bird's eye view' of the
development, indicating those areas that are sections,
registered exclusive use areas, and common property.
Take note of your parking bays, garages, courtyards, storerooms,
balconies, patios, terraces, and gardens, as the sectional plans
will confirm the legal nature of these areas, as well as your
responsibility and liability in each instance.
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APRIL/MAY 2019 SA Real Estate Investor Magazine
Reference will be made to your participation quota, which
will determine your undivided share in the common property
within the scheme, your proportionate share in the expenses
of the body corporate, and the extent of your voting right in
body corporate matters.
Does the sectional plan include any extension that was carried
out to your section? If not, the bank, should you require it, will
not grant loan financing.
Don't be surprised if the developer suddenly starts building
within your scheme long after it has been established.
Developers sometimes have this right, provided they have
reserved it from the start, which can also be confirmed by the
sectional plans.
While you're taking a look at the plans, also find out if
there are any title deed restrictions, which could limit your
ownership or prevent you from exercising this right fully, such
as a limitation on selling your garage separately from your
residential unit.
What about maintenance?
Furthermore, points out van der Merwe, ‘it's important to
establish if there any areas within the scheme that require
maintenance or repair, or any items that require replacement.
For example, in regard to: painting, electric fencing, security
cameras, elevators, swimming pool or window frames. Each
body corporate must have a written maintenance, repair and
replacement plan, known as a '10-year maintenance plan',
which is updated by the trustees and approved by the members
annually.
It's important to understand your role to play in the
maintenance and repair required within the scheme.
Managed or self-administered?
It's also important to find out whether the scheme is self-
administered, which means it is run by the trustees and
perhaps a support staff, or whether there is a professional
managing agent administering and managing the scheme on
behalf of, and alongside, the trustees.
Take a look at the minutes of the last annual general meeting
to see whether the members raised any concerns with the
management of the body corporate, or the minutes of a trustee
meeting which may indicate how well the trustees work
together, and for the body corporate.
"While there may be a negative perception among some of the
CSOS, managing agents and bodies corporate have to abide
by the Act and its regulations, so find out whether there are
currently disputes in progress involving the body corporate,
whether your scheme is registered with the CSOS, and
whether it is recovering and paying the prescribed levies.