State of the Sectional Title Nation
Prof. Graham Paddock

Sectional Title, as a form of property ownership, has been around since 1973 when the 'first generation' Sectional Titles Act came into effect. Since then it has become an ever-increasingly popular form of title, to the point where some statistics show that almost 50% of all home ownership is now in the form of sectional title or some other form of 'community scheme'.

Increased security, private communities and shared maintenance obligations are just some of the factors that have lead to sectional title becoming the preferred title of choice. However, little is known about the shape and size of this industry that has grown so quickly. Says Prof. Graham Paddock, the head of Paddocks which is a specialist sectional title firm, "There aren't any clear and publicly available statistics that describe the sectional title industry in definite terms". "For example, you may be able to find out how many sectional title schemes and units exist in South Africa, but nobody can break those figures down into dwelling units, garages, store-rooms and so on. How many Managing Agents manage these properties? What is the value of the levies that fund the schemes managed by these Agents? Are there any professional associations?"

Prof. Paddock accepts that there is a lack of specific and dependable data, but on the basis of a number of assumptions he has come to the following conclusions. "Presently there are approximately 35,000 sectional title housing schemes in South Africa and about 680,000 sectional title housing units. This gives us an average of 20 units per sectional title scheme. We know that there are schemes with as few as 2 units and some with as many as 10,000 units. Our data shows that there are approximately 3,500 property managers throughout South Africa, which leads one to conclude that on average a property manager handles 10 sectional title schemes. In practice scheme sizes vary considerably, property managers tend to specialize in the property title they manage and although there are some that manage as many as 50 schemes, we believe that the average specialist sectional title property manager cares for about 30 sectional title schemes".

"The National Association of Managing Agents (NAMA) is the sectional title management industry's only professional organization. It currently has 274 member firms who together manage 13,000 sectional title schemes that account for approximately 400,000 sectional title units. As NAMA and its members place a strong focus on the training of their Property Managers, we believe that a significant portion of sectional title schemes are managed by well-trained personnel." "This training is critical to the establishment of a professional industry that we estimate manages about R5.5 billion in annual property levy income". "It is our belief that sectional title will continue to be the preferred title of choice for home owners in South Africa for some time to come. Supported by well-trained property managers, we expect the industry to continue to dominate new housing initiatives and to become increasingly professional".

Paddocks, together with the University of Cape Town, presents a 6-month 'UCT Sectional Title Scheme Management Certificate' course. For more information on the next course, which begins on the 5th of December 2008, please contact Christina on 021 674 7818 or christina@paddocks.co.za

Article by: By Prof. Graham Paddock - www.paddocks.co.za