Buyers must learn about sectional title before buying a unit

Just as estate agents need training in order to be fully versed in all legal aspects of selling or buying sectional title units, potential owners should also read up and know as much as they can about owning a unit in a sectional title scheme before signing an offer to purchase for a section in a sectional title scheme, said Michael Bauer, general manager of the property management company, IHFM.

Potential owners of sectional title units need to understand the rights and obligations that come with owning a unit in a development such as this and it often happens that buyers only read through documents such as the conduct rules or check the financials of the scheme after they have signed a sales agreement.

There are also duties as an owner of a sectional title unit to become actively involved and take an interest in their scheme, they should ask about the management, he said.

The one way owners can have an active role is by becoming a trustee of the body corporate, says Bauer. Although the trustees have onerous obligations and the job can be time consuming, it is a good way of influencing the way the scheme is run in a positive way.

One of the things to be wary of is when trustees change, the previous trustees might have been very conservative in their spending, possibly overly so, and then when new trustees take over it is possible that they are not as frugal and end up using up all the funds that have been built up over the years by undertaking too many projects at once, said Bauer. Even if the maintenance or repairs are needed, the owner has a right to question whether they are all necessary at the time and whether they have been budgeted for properly.

Check how many units the development still has to sell before buying, he said.

If the developer has the majority of the units still in his ownership, he also holds the majority of votes at the AGM and can end up running the development in his favour.

“There have been cases where there are too many units still on the market in the scheme. The developer then decides to hold onto these for a while and installs tenants in each, which can sometimes end in the vetting of who lives there becoming lax as all the developer wants is people in the unit. The renting agent might not be discerning in choosing tenants as he should be and a bad element can creep in.”

Whether the scheme is big or small, there are always advantages and disadvantages, so it is up to the buyer to ask the relevant questions about every aspect of living in one, said Bauer.

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