9 questions to ask when buying ST

Owning a unit in a sectional title scheme has become more popular because of the rising costs of living and maintaining properties, as well as the additional security this type of scheme offers.

Often buyers will look at the unit they are considering buying but will not investigate further than that - until they have actually signed a contract - but all the preliminary investigation must be done early in the "looking" stage.

Even though there are great benefits to buying into a sectional title scheme, there are also many questions that should be asked before signing an offer to purchase.

This is according to Mandi Hanekom, operations manager for Propell, who says often buyers will look at the unit they are considering buying but will not investigate further than that - until they have actually signed a contract - but all the preliminary investigation must be done early in the "looking" stage.

Hanekom says pertinent questions to ask when looking at a sectional title unit are:

1. What is sold with the unit? If there is a garden, the buyer should ask if that is an exclusive use area; or if there is a garage in front of the unit, check whether this too is part of that section or has been included properly on the section plan and is owned by the seller. There are many cases, particularly in older schemes, where the sectional plan does not tie up with the unit numbers or what is actually owned, she says.
    
2. Are there parking bays, garages and storerooms? On the surface, it may look like there is a parking bay or a garage outside the unit, but this might not be allocated to that unit - it might be common property that is rented to the owners by the body corporate, as might be the case with storerooms.
    
3. If the parking bays, garages or storerooms are owned by the body corporate and rented out, the buyer should check whether they go back into the pool once the unit is sold or whether he will have an automatic option to rent them.In many sectional title schemes there is a shortage of these and the system would be that the parking bay or garage would go to the next person on the waiting list, so the prospective buyer might not have enough parking available to him immediately.
    
4. Are there enough visitors’ parking bays and what are the rules with regard to residents parking in those bays (which often happens where there is a shortage)?
    
5. Are there open pieces of land around the complex and has the developer reserved a right to extend the scheme in phases? Hanekom says it would be worthwhile checking what these future plans might be, as there have been cases in the past where the developer has exercised his right to extend but changed the plan and has perhaps altered the overall ‘feel’ of the complex or has added to the density of the scheme.
    
6. Can you have copies of the conduct rules of the complex, as well as copies of the audited financial statements? These must be given to the prospective buyer before any offer to purchase is signed. Reading through the rules beforehand is important because the buyer might find that there is a rule in place that does not suit his lifestyle, e.g. no pets.
    
7. The financial statements will show whether the scheme is financially sound and the banks will need these as well in order to grant a bond towards the purchase of the unit. What amounts are owing by the body corporate to the municipality? These amounts can sometimes be large and would indicate whether there is a problem within the scheme, either with the collection of the levies or the management of the finances, she says.
    
8. What are the monthly levies? While many would want a low levy, this is not always healthy, because there might be an under-payment towards the running of the scheme and this might necessitate a large special levy in the future. It might also mean that certain maintenance or repairs are not being planned for, which might be a problem later on, she says.
    
9. Are there any special levies likely to be raised in the future? If there are, check how much will be needed. Hanekom says it would be hard for a new buyer to find, shortly after moving into the scheme, that he is suddenly responsible for a R50 000 special levy, for which no ordinary household would probably have budgeted for.

“Sectional title schemes usually offer good lifestyles in that they are often more secure and there are various amenities such as gyms and swimming pools that would cost a lot to run on one’s own.”

Hanekom says the only compromise is that the owners live by the rules, which is not a hardship to many. She says if the scheme is well-managed, values will increase steadily and the purchase will be a good investment for years to come.