Property Titles: Full Title & Sectional Title. Know the Difference

Property Title Types are split into two and are discussed as Full Title and Sectional Title. It's important to know the difference before deciding upon a property investment strategy.

There are basically only two types of property in South Africa namely Full Title property and Sectional Title property. All properties whether they are full title or sectional title are registered in the relevant deeds registration offices around the country. Evaluating the 2 different types on Property Title need completely different approaches.

Full Property Title

Full title property can be defined as basically owning the piece of land including the soil and everything on it like water, all permanent improvements for example buildings, its associated permanent fittings and everything growing on the piece of land that has a root system attached to the land.

For instance, the title deed for a full title property will not specify that there is a 450m² house, with three bedrooms and two bathrooms on the property. The title deed only states that the property is 890m² and that the purchase price is registered at R1,2 million. In other words, the house that is built on the property is regarded as a permanent fixture of the land and therefore will form part of the sale.

Some properties form part of an estate.

An easy example of such properties is golf estates. Houses are built all around the golf course and while the houses are mostly purchased as full title, these estates usually have a home owners association that governs the do’s and don’ts on the whole premises.

These associations have rules that must be complied with such as nominating a few real estate agents who will be allowed to list properties for sale in the estate and if the case may be, lease the properties to prospective tenants. They will also then nominate and manage the general upkeep of the property which will include the gardening services and the security in the estate.

Regular meetings will be held and there will also be a levy charged by the home owners association which covers the expenses incurred.

Sectional Property Title

The Sectional Titles Act states that a unit, being a sectional title unit or property comprising of a section and an undivided share in the common property as apportioned by the participation quota, is deemed to be land. This is a second type of title to land which came into effect in 1973 whereby ownership of sectional title buildings are now measured in the horizontal and vertical strata. Therefore two or more different owners can now own separate units situated in the same building.

This does sound complex but it is quite simple. Before the sectional titles act came to be, if you wanted to buy unit 12 on the second floor, you needed to buy the entire building. You could not separate unit 12 from the rest of the building, you had to purchase the whole building as one entity for say R5 million.

Once the sectional title act came into force and if the building was duly sectionalised, you could purchase unit 12 on the second floor without paying for the entire building. Now we are able to purchase a section of the building at say R500 000 and have your ownership rights to only unit 12 registered.

If you are an owner of a sectional title unit, you need to remember that the occupants form part of a community and the living areas are normally much more densely populated. Therefore stricter rules were written to avoid chaos in these so called townhouse complexes.

What you need to know before making an offer to purchase.

Thanks to Graham Van Zyl for permission to reproduce this text.