What you need to know before buying in a sectional title

702’s John Perlman speaks with Marina Constas, Director of BBM Attorneys.

Listen below:

Homebuyers are often drawn to sectional titles or gated communities because of the extra sense of security they offer.

However, they may find themselves facing shocking bills if they do not factor in the various costs of living there, says Constas.

She says that some estate agents are so eager to push the sale, that they do not fully inform the buyers of what they may face.

The most obvious cost associated with living in these environments are levies which are used to maintain the common property – but these are not the only costs.

If a body corporate needs to attend to a large, unexpected maintenance issue that the reserve fund cannot cover, they can impose a special levy, or raise regular levies.

A special levy is often payable as a lump sum, coming as a surprise to the buyers.

Sectional schemes must also contribute to statutory oversight bodies, so a small Community Schemes Ombud Service (CSOS) levy is charged to owners and collected quarterly.

“I think that there should be more transparency.”

- Marina Constas, Director of BBM Attorneys 

RELATED: Moving from homeowner to tenant? Tips for making smart money decisions with the proceeds

While many things may be taken care of by the body corporate, your municipal bills are not always one of them.

Some schemes bulk-buy water/electricity and recover costs via levies or prepaid meters – while others rate each unit separately, and the owner has to pay their own rates and utilities.

Scroll up to the audio player for more.