Explaining the Differences Between Freehold and Sectional Title Properties in South Africa

When purchasing property in South Africa, one of the most important decisions you'll face is whether to invest in a freehold or sectional title property. Each type of ownership comes with its own set of advantages, responsibilities and legal implications. Understanding the differences between freehold and sectional title properties can help you make an informed decision that aligns with your lifestyle and investment goals. In this article, we’ll break down the key distinctions between these two property ownership types.

What is Freehold Ownership?

Freehold ownership, also known as full title ownership, refers to owning both the property and the land it is situated on. This type of ownership is typically associated with standalone houses, where the owner has complete control over the property and the land.

Key Characteristics of Freehold Ownership:

1. Ownership Rights

   • As a freehold owner, you have full ownership rights over the property and the land. This includes the freedom to make any modifications, renovations, or additions to the property, subject to municipal regulations.

2. Maintenance Responsibilities

   • With freehold ownership, the property owner is solely responsible for maintaining both the interior and exterior of the property, as well as the land surrounding it. This includes costs associated with repairs, landscaping, and any other maintenance needs.

3. Rates and Taxes

   • Freehold property owners are responsible for paying all municipal rates and taxes directly to the local authority. These costs can vary depending on the location and size of the property.

4. Independence and Privacy

   • Freehold properties offer a high level of independence and privacy, as the owner does not share walls, facilities, or communal areas with other property owners.

What is Sectional Title Ownership?

Sectional title ownership refers to owning a unit within a larger complex or development, such as an apartment, townhouse, or cluster home. In this case, you own your individual unit, but you share ownership of common areas and facilities with other unit owners.

Key Characteristics of Sectional Title Ownership:

1. Ownership Rights

   • In a sectional title scheme, you own your specific unit (referred to as a “section”) and have a shared interest in the common property, which includes areas like gardens, parking lots, and recreational facilities. The ownership of these common areas is collectively managed by the body corporate.

2. Maintenance Responsibilities

   • The maintenance of common areas is managed by the body corporate, which is funded by levies paid by all unit owners. However, you are responsible for the interior maintenance of your own unit.

3. Levies and Contributions

   • Sectional title owners are required to pay levies to the body corporate. These levies cover the costs of maintaining common areas, security, insurance, and other communal services. The amount of levies can vary based on the amenities and services provided by the complex.

4. Community Living

   • Living in a sectional title property involves close proximity to other residents, with shared walls and communal facilities. This type of ownership often comes with rules and regulations set by the body corporate, which are designed to maintain harmony and manage the shared property.

Advantages and Disadvantages

Freehold Property:

Advantages:

• Complete control over the property.

• Greater privacy and independence.

• No levies to pay (aside from municipal rates).

Disadvantages:

• Full responsibility for maintenance and repairs.

• Potentially higher costs for property upkeep.

Sectional Title Property:

Advantages:

• Shared maintenance costs through levies.

• Access to communal facilities like pools, gyms and gardens.

• Often more affordable entry into property ownership.

Disadvantages:

• Less privacy and independence.

• Subject to body corporate rules and regulations.

• Regular levies can increase over time.

Conclusion

Choosing between freehold and sectional title properties in South Africa depends on your personal preferences, financial situation, and long-term goals. Freehold properties offer more control and privacy but come with greater responsibilities. Sectional title properties provide a community living experience with shared maintenance costs, but with less control over your property.

Whether you’re a first-time buyer or a seasoned investor, understanding these differences is crucial to making an informed decision. At Barter McKellar, our experienced conveyancers are here to guide you through the property buying process, ensuring that you make the right choice for your needs. Contact us today for expert legal advice on your property transaction.