1. Sectional Title 2. iCOURSE 3.Fractional Ownership.
Sectional title has been a form of property ownership in South Africa for one-third of a century. The original Sectional Titles Act, passed in 1971, was brought into operation in 1973, and it was replaced in 1988 by the present Sectional Titles Act which was passed in 1986 and has been amended several times, most recently last year. During that time, sectional title has become a very important part of this country's property market and the industries which serves it. As far as the estate agency industry is concerned, there are two distinct fields of sectional title activity: selling developments and individual units, and acting as a managing agent. The day-to-day business in each field is different from the other, but we believe it is a good idea for each to understand the other. Selling developments and units - Selling sectional title units, whether individually or as a whole new scheme, is similar in many respects to selling other properties, such as free-standing houses. However, there are several aspects peculiar to sectional title. In the case of an existing property, e.g. a block of flats, which is converted to sectional title, the developer must comply with several requirements under the Act, including special measures designed to protect any existing tenants. An estate agent mandated to sell a new development must be fully aware of these requirements, and market the units accordingly. In the case of the sale of an existing unit in an established scheme, the requirements are fewer, but they are still important. The agent needs to know - and be able to inform prospective buyers - about such matters as the Body Corporate's financial position, its policy on pre-payment of levies by sellers, its rules, exclusive use areas, and whether or not a Section 25 right of extension has been registered. That in addition to everything else that an agent needs to know and deal with in selling a residential property. A mistake can prove costly and, if it concerns the Section 25 right, it can even lead to cancellation of the sale. Managing agent - The role of the managing agent is rather like that of a company secretary. The managing agent's job is to provide professional support to the trustees who manage a sectional title scheme. The sort of support they require varies, but typically it would include invoicing for and collecting monthly levies, providing accounting services, paying the bills, taking care of maintenance and repairs, dealing with correspondence, and providing secretarial services for trustees' and Body Corporate meetings. Depending on the scheme, the managing agent might also be required to provide technical advice on planning matters, and obtain legal support when necessary. Trustees are usually lay people, and rely heavily on their managing agents, who must therefore be competent in a variety of fields and be equipped with adequate resources. The term which seems to be applied more often than any other to sectional title is "minefield". To help our members navigate their way through it without being blown up, we are running courses and workshops during this year, beginning in February. Enquiries: phone Lee-Ann at 021 531 3180. -------------------------------------------- OUR NEXT iCOURSE We will be holding our next free training course for Black estate agents from mid-February to mid-May. It is part of our ongoing commitment to economic empowerment, and the raising of professional standards in our industry. iCourse is open to Black estate agents who have been in the industry for at least one year, and who want to increase their professional skills and knowledge. The course programme includes sales and marketing, sectional title, rentals, financial and legal knowledge, valuations, office administration, and business planning. To apply, please call Joy at 021 531 3180. ------------------------------------------------------ FRACTIONAL TITLE Have you heard about "fractional title", also known as "fractional ownership"? This is something fairly new on the South African property scene, and at the moment it is largely confined to the leisure market, e.g. holiday homes. It combines elements of property syndication, time share, and share block schemes. How it works is that several people jointly buy a property, probably through a company or close corporation. Each owner then has the right to use that property for a certain number of weeks during the year - his/her "fraction". Unlike a time share scheme, where the property belongs to the time share company, this property belongs to the people who use it, and they appoint a company to manage it for them. Unlike time share and share block, the owners' individual fractional interests in the property are registered in the Deeds Office, and can be mortgaged and sold or bequeathed. Of course, as the saying goes, "terms and conditions apply", and fractional title owners will need to satisfy themselves as to transfer duty, CGT and other implications, investment value, and their consumer protection. For more information, phone Vivien at 021 531 3180.
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