Selling sectional title property, need to know
There are a number of key differences between full title and sectional title property which include what is required when it comes to selling. In addition to the standard requirements that need to be met when selling such as ensuring the property is legally fit and providing various compliance certificates in that regard, sectional title property require a few extra need to knows which, if not complied with, could delay the transfer of the property.
Where possible, the necessary documents and information should be ready and provided to the agent upon listing the property. These include:
- Title deed and usage - it is important for buyers to understand what is included as part of the exclusive use area versus the common property, as well as the regulations around the use of the common property which the buyer would want to know about before putting in the offer. It may for example be that there is no provision for parking directly at the unit and while communal parking is available, it is not on an exclusive use basis.
- Scheme rules - a copy of the rules should be provided with the Offer to Purchase and the buyer should ensure that they fully understand the rules of the scheme. Many schemes for example limit the number of occupants per unit as well as pet ownership, both aspects which may become problematic later on for the new owner.
- Levies - the prospective buyer will also need full disclosure of the monthly levies payable as well as any special levies that may transfer to him/her. A levy clearance certificate confirming that the seller is up to date with all levy payments will be required as part of the documentation needed for transfer. The body corporate or home owner's association may also require payment from the seller of a portion of the levy until date of transfer.
- Finances of the Body Corporate - it is always advisable for buyers to ensure that they invest in a complex with sound financial management and they should therefore obtain this information from the agent upfront. Additionally, the purchaser's bank may also require documents such as the sectional title scheme's financial statements to assess the financial status and ensure that the scheme is effectively managed. These will be provided by the body corporate.
- Compliance Certificates - the body corporate, represented by the trustees, is responsible for ensuring the compliance of installations on the common property such as the security equipment, electric fences and any external taps, water pipes and irrigation systems, and for obtaining the necessary compliance certificates. Sellers would therefore need to obtain copies of the necessary compliance certificates from the body corporate and submit these along with those that pertain to their own units to the transfer attorneys.
Selling sectional property is a complex transaction and just one of the many reasons why the knowledge and experience of a skilled agent makes the difference in ensuring a smooth sales process.
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Author: Seeff Southern Suburbs