Types Of Ownership in South Africa
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Types Of Ownership in South Africa


Types of Home Ownership in South Africa Most properties in South Africa are sold either
as “freehold”, “sectional title”, “99-year leasehold” or “Share block”. See more about Ownership Facts here. Freehold Simply put, freehold means that you own a
piece of land and everything on it. You will be required to pay rates to the municipality
based on the value of the land and buildings. Sectional Title Properties such as townhouses and flats are
usually registered under “sectional title”. In this case you own the “inside” of the house
only, up to and including the ceiling. The outside of the house, the land on which
it is built, as well as boundary walls, the roof, outbuildings and the like are owned
by the “Body Corporate” (which is made up of all the owners of the individual units)
on behalf of the individual owners. In a sectional title development, the expenses
of the Body Corporate are passed on to the individual section owners in the form of a
compulsory levy. This includes municipal rates, building insurance
on the whole complex, repairs and maintenance, communal water and electricity, accounting
fees etc. So you need to budget for the monthly levy
in addition to your home Loan re-payments. As from July 2008 Sectional Title units are
separately rated and you will receive your own account from the Municipality. Before buying into a sectional title complex,
it’s essential to check the latest financial accounts of the Body Corporate to make sure
it‘s financially sound and that the House rules imposed by the Body Corporate are reasonable
and in line with the Sectional Title Scheme rules. 99-Year Leasehold Where a property is built on 99-year leasehold
land, the homeowner never owns the land outright. The plot is on lease to the owner for a period
of 99 years. If you are buying leasehold land from an existing
owner and the real owner is not government or a municipality, you will buy what is left
in years on the lease. In the case where the government is the owner
of the land, the 99 year period begins afresh with every change of ownership of the leasehold. The land remains the property of the lessor,
usually the government or a municipality. Share Block Share block is another form of property ownership,
which typically applies only to a small number of blocks of flats. In this case the whole property is registered
in the name of a company. The Purchaser becomes a shareholder in the
company, and in terms of a “User Agreement” is entitled to occupy a particular flat (unit)
and “proof of ownership” is a share certificate instead of a title deed. Expenses of the share block company will be
divided among the shareholders in the same way as a sectional title. Before buying into a share block, it’s essential
to get an accountant to check the latest financial accounts and balance sheet to make sure it’s
financially sound. However, be warned: typically no bank or financial
institution will grant a mortgage loan where the property is held through a share block
scheme.

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