Vusi Mathebula is a South African Banking and Finance lawyer specializing in leverage finance, project finance, and commercial property finance.
His experience includes advising on various legal matters impacting investment banking, as well as advising lenders and borrowers on the financing of major projects across Africa, including renewable energy projects, retail establishments, and mining projects.
I sat down with Vusi to chat about the different types of ways you can own property and he also shared some tips for first-time buyers.
There are different types of property in South Africa, not only are there hidden costs you should be aware of buy you need to take into consideration the architecture type, the building structure, and the type of ownership.
The architectural structure style in which the home is built. There are many such styles, usually based on some era or geographical location. Examples include Cape Cod, Mediterranean, Mid-Century Modern, Georgian, Ranch, etc.
There are many different types of building structures, the most common and popular ones in South Africa are single-family homes, townhouses, apartments, and farm homes.
Types of Property Ownership
Sectional Title vs Full Title (Freehold)
Another thing to take into consideration when choosing types of property in South Africa is whether the property is a Sectional Title or Freehold.
Freehold Ownership is when you own a property, which includes the building and the land it is built on, while Sectional Title is the ownership of units or sections within a complex or development such as detached houses, townhouses, flats, or apartments.
Sectional Title Meaning
As a sectional title property owner in South Africa, you will automatically become a member of the body corporate. You will automatically be bound by the rules of the body corporate, whether you were given a copy of them before you purchased/became the owner or not and regardless of whether you agreed to them or not.
Every sectional title scheme comprises of three elements, owners’ sections, exclusive use areas, and common property.
There is also the concept of an owner’s unit (which is different from that of a scheme). It is important for you to understand the differences, so that you know, as an owner, what is yours and what is not, and what use/entitlements you are paying levies toward.
Price also takes a factor as Freehold Properties tend to be more expensive to buy. Sectional Title properties have a monthly levy that needs to be paid to your estate body corporate.
A Freehold Ownership contract enables you to be in charge of everything related to your property while a Sectional Title means you only have control of your four walls. This means if you need to make renovations or big changes to your property you need to discuss it with the Body Corporate or management agency of your property.
It’s important to research the different Pros and Cons of every agreement! Looking to purchase a home? Here’s everything you should know about buying a home in South Africa process.
Reach out to Vusi Mathebula
Listen to the full episode on the UNPACK Podcast
- 4 Types of property ownership
- Difference between buying as a natural person vs. company, partnership, or trust.
- Tips for first-time buyers
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- How the property buying process can be updated
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