Sectional title vs freehold ownership

Sectional title vs freehold ownership

Sectional title vs freehold ownership? When it comes to buying property, it is important to understand the different property classes. A Title Deed is attached to every registered property and describes the type of property as well as any restrictions that may apply. In South Africa, sectional title and full title (also referred to as freehold) are the two basic categories of property. While sectional title living has become increasingly popular, the limitations of living under the authority of a body corporate or HOA might make buyers more hesitant about buying into a sectional title. Whether you’re in search of a secure townhouse or a sprawling suburban home, here’s a breakdown of all you need to know.

Sectional title vs freehold ownership

To understand the differences between sectional title and traditional freehold property ownership, it is important to define them.

Freehold ownership

Freehold or full title ownership refers to the holding of full ownership rights in a specific property. This includes the land itself and any building that is on it. The property owner will hold a title deed in their name which is registered at the deeds registry. As such, the title deeds will serve as proof of property ownership. The purchaser of this property is responsible for registration, transfer fees and other associated costs, rates, insurance, maintenance of the property and other incurred utility bills.

The benefits of freehold ownership

Independence

Freehold property owners are in complete control and are financially responsible for the property in its entirety. This means that you are at liberty to modify your home however you choose as long as you have received planning approval from the relevant authorities.

More space

Freehold properties often have larger grounds than sectional title units. Because you are not purchasing part ownership of the property, the whole plot on which the property stands belongs to you alone. This often translates into larger gardens and more space between you and your neighbours.

The drawbacks of freehold ownership

Less security

With freehold properties, owners are entirely responsible for their security – you need to pay to secure the perimeter, and often for an armed response security company to be on call should an intruder enter the premises.

Varying costs

The overall upkeep of the residence, including the pavement, garden, and exterior, is the responsibility of freehold property owners. Unlike the levies paid in sectional titles, freehold properties have varying costs difficult to budget for.

Sectional title

Sectional title ownership differs in that only a unit in a building or complex is purchased and full ownership rights may be exercised in relation to that unit only. Additionally, the purchaser acquires an undivided share in all communal property of the development. Similar costs are involved as in freehold purchases including registration, transfer fees, rates, and utility bills.

The benefits of sectional title

Security

Most sectional title developments have excellent security around the perimeter and at the entrance of the development, which is all included in the monthly levies. As compared to freehold property, owners of sectional title units live close to their neighbours.

Communal living

When compared to freehold neighbourhoods, communities living in sectional title schemes have tighter-knit communities and create significantly more connections with neighbours.

The drawbacks of sectional title

Lack of freedom

The body corporate or HOA restricts owners of sectional title units from making alterations to their homes. Before they can start renovating, those who desire to do so must first acquire consent from the body corporate. You will also need to comply with the management rules and conduct rules as laid out by the body corporate.

Compare listings

Compare