What's the difference between buying a sectional title vs. freehold property

What's the difference between buying a sectional title vs. freehold property

24 Jan 2020

Torn between Sectional title or freehold property? Here's what you need to know before deciding to buy.

First up, what's the difference between the two types of title? Simply put, sectional title speaks to complex living, where you essentially own everything within the four walls of your property, but whatever is outside that – hallways, lifts, gardens and recreational spaces – is communally owned and cared for. With freehold title, in contrast, you're the queen or king of your complete kingdom – house, out-buildings, land and leisure areas.

Whether you're in search of a secure townhouse or a sprawling suburban home, here's a breakdown of all you need to know:

Freehold title

Sectional title

Price: May have a hefty price tag.

Price: Often more affordable.

*A great way to gain a foothold in an area where you can't afford freehold.

Types: Free-standing houses, cluster homes, residential properties used for small businesses, smallholdings.

Types: Semi-detached homes, townhouses, flats/apartments, duet houses.

Management: You!

Management: Body corporate (BC) or Homeowners Association (HOA); management agent

Monthly costs:

  • Insurance

  • Municipal rates and taxes

  • Security

  • Maintenance of garden, pool, buildings, etc.

Monthly costs:

  • Insurance

  • Levies, which usually cover:

    • Municipal rates and taxes

    • Security service

    • Maintenance of common property and recreational areas (e.g. pool, clubhouse, etc.)

    • Wages of cleaning, security and other staff

    • A compulsory reserve fund for the complex

Security: Up to you!

Security: Usually excellent, with gate access control and patrols. Plus, living really close to your neighbours may make for better security.

Freedom: You're independent and have complete control over decision-making. Plus, you can renovate as you please (as long as you have municipal approval).

Freedom: Not so much! If you want to renovate, you'll need permission from the Body Corporate.

Community: It's up to you to create one. Street parties, neighbourhood watch? – you'll have to make it happen.

Community: Close-knit communities with loads of interaction. For kids, it can be a paradise!

Space: You'll have lots of space! The whole plot or erf is yours. And you're generally not as close to your neighbours.

Space: Lovely communal spaces, but you might be on top of your neighbours!

Upkeep and maintenance: Costs may vary, depending on what you need to do: remember, the pavement, garden and exterior are your responsibility.

Upkeep and maintenance: Costs are more fixed and managed by the Body Corporate or Homeowners Association.

Rules: You make your own – within reason, of course!

Rules: Read up on these before you buy. There may be a 'no pets' rule, for example, and there may be restrictions when it comes to renting, renovating or reselling.

In general, the more questions you ask, the more empowered you'll be to make the right choice. Ask the hard questions before you find that final fit. But before you even do that, get pre-approved with BetterBond, so you know what you can afford. That'll give you a real sense of the best type of property suited to you and your budget!

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