What is Sectional Title?

Buying Property , General , Property Management 13 Comments

We've spent a lot of time discussing the fundamental aspects involved in Sectional Title Management, but have not previously addressed the question of what exactly Sectional Title is. 


There seems to be a lot of misunderstanding regarding the concept of Sectional Title, we detail the concept and consequences of a Sectional Title scheme which all should be understood before buying into a Sectional Title scheme.


Sectional Title came about to allow a person to purchase a Section of a building or property. A logical question which stems from this action is the question of ownership of non-sections (ie. stairwells, walkways and passages, refuse rooms, etc), these are owned by the collective owners of Sections in undivided shares. A Managing Agent is usually appointed to manage the common property on behalf of the Body Corporate.


A Body Corporate comes into existence at the time the first Section is transferred out of the name of the developer. The developer therefore usually appoints the Managing Agent.


The main financial consequence to a Sectional Title owner is that he or she has to pay a levy, determined by the Body Corporate at Annual General Meetings, for the running of the Body Corporate. This figure is usually fixed for per year and should encompass all foreseeable (and make provision for unforeseeable) expenses throughout the ensuing year. Special Levies may also be implemented for some items should there not be sufficient funds to perform certain repairs or improvements.


As a person buying into a Sectional Title scheme, should always request a copy of the audited financial statements. This will put the financial standing into perspective as nobody would want to buy into a financially troubled Sectional Title Scheme.


The reputation of the Managing Agents is also important as they hold the finances belonging to the Body Corporate, one should always be certain that sufficient checks and balances are in place and that the Managing Agent cannot steal the money belonging to the unsuspecting Body Corporate.


Sectional Title is currently governed by The Sectional Titles Act (95 of 1986) which sets out the requirements, functions and duties of the Body Corporate.


See our article on the Functions of Managing Agents to find out more about what the Managing Agents do for the Body Corporate



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