Conduct rules: What you need to know when buying in a Sectional Title Scheme

MyPR: Conduct rules: What you need to know when buying in a Sectional Title Scheme:

Potential residential property buyers and investors should take advantage of the current buyers maket as the prevailing market conditions are in their favour. Interest rates are at an all time low – the prime rate is now at 7.25%, the lowest rate in more than four decades – there has been an adjustment to the transfer duties of properties under R1 million and over all costs of purchasing a property are lower. This comes down to the fact that the minimum monthly instalment on a R1 milllion bond will be about R1747 lower than it was in January.

Choosing between full title and sectional title
When deciding which type of property to purchase, buyers can choose between full title or sectional title. Full title describes the transfer of full ownership rights when you own a property, which includes the building and the land it is built on. Sectional title on the other hand, describes separate ownership of units or sections within a complex or development.

“Many buyers are choosing to invest into a sectional title scheme because of the level of security and community that this sort of property provides,” says Pearl Scheltema, CEO of Fitzanne Estates. “Another aspect that is making this option popular among buyers is that sectional title units are often more affordable than full title cluster homes, but generally offer similar security and lifestyle benefits.”

A sectional title property includes having a body corporate to manage the scheme and take care of its finances. A managing agent, like Fitzanne Estates, is often appointed to take care of the duties of a Body Corporate, which includes collecting monthly levies, paying the scheme’s insurance premiums, arranging meetings, ensuring compliance with the Sectional Titles Act, and ensuring that the owners and tenants comply with the Body Corporate rules, called conduct rules.

Why conduct rules matter
“Conduct rules providers the sectional title owner as well as all people living in the building with the rules of the scheme in terms of their use and enjoyment of the common property,” says Scheltema. “If an owner decides to rent out the unit, these conduct rules apply to the tenants as well.”

Scheltema explains that when one buys a sectional title property from Fitzanne Estates, the new owner receive a full information pack which includes details about levies, the Body Corporate and Trustees, details about the Managing Agent and a copy of the conduct rules.

“If an owner then decides to rent out the unit, the tenant needs to understand and agree with the conduct rules, which form an extension to the lease agreement,” cautions Scheltema. “Rules such as not allowing pets in a section have a fundamental impact on an individual’s decision to purchase or rent a unit and they cannot only become aware of these rules after the fact.”

As per the Sectional Title Act, conduct rules need to be registered with the Community Schemes Ombud Service (CSOS) in order for them to be enforceable. Such rules can include the following, although they differ from body corporate to body corporate.

Although the Sectional Title Act provides standard rules as seen in Annexure 9 of the Act, and these Rules apply to a Scheme by default in the absence of Specific Rules registered at the Deeds Office, it does not mean that all the Rules of all the Schemes are the same.

Conduct Rules usually deal with the following:
• Animals, reptiles and birds
• Refuse disposal
• Vehicles
• Damage, alterations and additions to common property
• Appearance from the outside
• Signs and Notices
• Littering
• Laundry
• Dangerous Acts
• Letting of Units
• Eradication of Pests

“You can thus see that conduct rules have been created to encourage harmonious living in a sectional title scheme and to uphold the standards by which the buildings and other areas in a scheme are maintained. Abiding by these rules are really in everyone’s best interest.” concludes Scheltema.

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