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The difference between full title and sectional title

The Sectional title Act 66 of 1971 which has subsequently been replaced by the Sectional title Act 95 of 1986 has created a new concept of property ownership, in that it made provision for the division of buildings in units / portions as well as common property and the optaining of separate ownership for a specific units / portion, whilst the ownership of the common property surrounding the specific portion vests in the Body Corporate which consists of all the registered owners of the individual portions jointly.

In the event of a block of flats it will mean that a purchaser can obtain separate ownership of the unit by means of a Deed of Transfer as well as joint ownership of the common property for example driveways, stairs, hallways, communal gardens ect. In accordance with the owners participation quota.

The participation quota is calculated by dividing the extent of the specific unit / portion by the extent of the total sectional title building. Example the specific portion = 90m² divided by the total square meterage of the total building = 9000m² x 100 = 1%. The purchaser will therefore have separate ownership of his individual unit / portion as well as 1% share in the common property.

The importance of the participation quota is threefold due to the fact that it reflects the owner’s interest in the common property, his voting power at general and special meetings as well as his liability towards levy contributions.

Together with transfer of the first unit to a purchaser, a Body Corporate is incorporated and initially all registered owners of individual units / portions will be members of the Body Corporate as soon as registration of the units / portions take place in their names. The Body Corporate is the entity in which all common property vests and who will be responsible for the maintenance and preservation of these areas.

As the norm the City Council will not issue separate water and electricity accounts to each owner but will provide a mass account to the body Corporate who will then be responsible for payment of the account and recovery of the amount by collecting the individual levies from each owner. The Body Corporate is therefore responsible for the management and administration of the common property to the advantage of the individual members.

It is important that a prospective owner acquaints himself with the rules of a specific sectional title scheme prior to purchasing a unit in the scheme as the Body Corporate has certain extended powers to act against members who disobey such rules, although each scheme’s rules and regulations may differ an example of such rules can be found in annexures 8 and 9 of the Sectional Title Act 9 of 1986.

Full Title

Different than in the event of sectional title there is no distinction between portions and common property in the event of full title and the stand on which the building is situated is transferred to the purchaser in exclusive ownership.

With full title there is no Body Corporate and the owner is only responsible towards the City Council for payment of electricity, water, rates and taxes. It happens from time to time that people purchase full title stands in a security complex. Despite the fact that the stand is transferred to the purchaser as a full title stand there are certain rules and regulations towards common property like the entrance gates, boundary walls, golf course etc. For the maintenance of these common areas a Section 21 Company (Home Owners Association) is normally incorporated.

Each owner automatically becomes a member of the Section 21 Company on date of transfer of the stand in to his name and a monthly levy is normally payable by the owners to the Company. All common areas are normally transferred into the name of the Section 21 Company but this does not change the character of the individual stand transferred into the name of the purchaser as being that of a full title.

Full Title

Different than in the event of sectional title there is no distinction between portions and common property in the event of full title and the stand on which the building is situated is transferred to the purchaser in exclusive ownership.

With full title there is no Body Corporate and the owner is only responsible towards the City Council for payment of electricity, water, rates and taxes. It happens from time to time that people purchase full title stands in a security complex. Despite the fact that the stand is transferred to the purchaser as a full title stand there are certain rules and regulations towards common property like the entrance gates, boundary walls, golf course etc. For the maintenance of these common areas a Section 21 Company (Home Owners Association) is normally incorporated.

Each owner automatically becomes a member of the Section 21 Company on date of transfer of the stand in to his name and a monthly levy is normally payable by the owners to the Company. All common areas are normally transferred into the name of the Section 21 Company but this does not change the character of the individual stand transferred into the name of the purchaser as being that of a full title.

Article by: Menlyn Properties - www.menprop.com