Sub-divisions, Sectional Titles and what you need to know
Category Property Advice
Many homeowners are looking to sub-divide their properties or considering Sectional Title schemes. It is a growing trend, particularly in the Southern Suburbs as owners consider the financial gains it can afford them.
Not only is it a positive move for sellers, but it also allowing younger buyers to purchase homes in the suburbs at more reasonable prices.
Here we look at what you need to know about Sectional Titles, Sub-Divisions and whether this is a fleeting trend or something that's set to entrench itself in local real estate.
What is a sectional title:
Sectional Title describes the ownership of a unit or house within a complex or development where you own a section. A Purchaser becomes part of a sectional title scheme with a Constitution and is governed by conduct rules and architectural guidelines.
What is a sub-division:
A sub-division describes the dividing of property into two or three portions and selling off of that land, with, or without, a house. The Purchaser acquires full right and freehold title over the subdivided portion.
What you need to know:
If going the sectional title route, the owner/seller will need to consult with a land surveyor to determine how he/she will be sectioning off their erf and or homes on that erf. A maximum of three sections are allowed. The land surveyor will then send to the Surveyor General for approval. He/she will also need to enlist a Conveyancer who will draw up a Constitution.
With a sub-division, this is stringently regulated by a multitude of laws, regulations, and bylaws. Local authorities have their own bylaws that govern sub-divisions. These include sizes of plots, services, access to roads, property zoning and many more. Subdivisions generally take longer to approve than a sectional title.
Are we seeing a trend emerge?
In the Southern Suburbs it is definitely becoming a trend. Zwaanzwyk, for example, where most properties are more than an acre, and where second or even third dwellings (cottages) already exist on the same property, are seeing property owners sectioning and selling off the second and/or third homes. They are forming small Sectional Schemes of only 2 or 3 homes. These owners no longer want the expenses that comes with maintaining larger properties, but still want to remain in the area, and are welcoming the capitalization that selling off a second or third section allows them.
Which is more preferable - Sectional Title or Sub-Division?
If you prefer a Freehold Full title ownership, where you are not governed by any architectural rules and limitations that a Sectional Scheme may have, then buying a sub-divided property may be a better bet. However, if a small sectional scheme allows diversity in its Constitution and rules and building codes, then both options are actually very similar.
Is this trend going to grow?
Yes. As more larger erfs are divided and/or sectioned off, sellers are benefitting financially, smaller erfs are becoming more available as well as being more affordable to more buyers. This is especially the case with younger buyers who are looking for more affordable options in the Southern Suburbs.
For a deeper dive into the pros and cons of Sectional Titles and Sub-Divisions, take a look at this great guide over at: https://www.fha.law.za/subdivision-v-sectional-title-the-property-owners-guide/
For more information on Cape Town properties and The Agency, visit: https://www.theagencygroup.co.za
Author: The Agency Property Group
