Consumer Information

Author:  Stonewood Property Management
10 February 2020

RESIDENTIAL ESTATE LIVING VS SECTIONAL TITLE LIVING

Buying property in a community scheme remains a popular choice for many buyers whether they are first-time buyers or established buyers. Community schemes come in various shapes and sizes, and includes security estates, sectional title complexes, retirement developments and housing estates.

Why are certain developments more suited to security estates or sectional title schemes?

A developer may be motivated to develop a community scheme because of the demand for such a property or by the availability of land in a certain area. Geographical considerations are also very important. New developments are generally built around areas where there is a shortage of housing and an increase in economic activities like offices and shopping malls, or in an area that provides greater access to a central business district.

How do you decide in which type of community scheme you want to buy?

Two of the biggest reasons for buyers to consider a community scheme above a free-standing property are price and security.

For some, security is of the utmost importance while for others living in a community where everybody knows each other is more important.

Some people simply decide to scale down by moving to a security estate, sectional title development or retirement development after living in a free-standing property for many years or when their children leave the family home.

Naturally, a community scheme unit requires far less maintenance from the owner than a free-standing property does and along with the added benefit of security, it often outweighs the option of living in a free-standing property.

Generally speaking, sectional title property is more affordable than stand alone property. This makes it easier for first-time buyers to own a property and it enables investors to own multiple properties at a fraction of the price of a free-standing property.

Governance of community schemes

The principles by which community schemes are managed are very similar. A group of people are elected to manage the scheme on behalf of the rest of the owners in the scheme. A managing agent is normally appointed by the scheme to assist with management duties.

A sectional title scheme relies on management and conduct rules (found in the Sectional Titles Schemes Management Act) to provide guidance on how the scheme must be managed while a homeowner’s association (estate) relies on its Articles of Association for governance purposes.

In both instances members in a scheme must abide by the applicable legislation for the schemes to be managed effectively.

Conclusion

In any type of development owners must understand their rights as well as the expectations of the scheme regarding their conduct. The conduct of residents is guided by the scheme’s rules and having a basic consideration for fellow residents.

Certain types of community schemes, such as sectional title, may not be suited to all people as they may have children or pets which some schemes do not allow.

Making an informed decision as to which type of community scheme is more suitable for you or your family is important before making a financial investment.

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