8 Things To Check For When Buying A Sectional Title Unit (Apartment)
Category Buying Property
All buyers, and definitely first time buyers, should always do a proper due diligence before they commit to making an offer on an apartment or unit in a sectional title scheme.
1. Ask to see the most recent Body Corporate's audited financial statements - to determine the cash flow (how does the monthly income compare with expenditures). Ask how many of the scheme's members are behind (or not) with their levy payments. Find out what are the success rate of collecting such arrears - and also what reserves the body corporate has. Find out if the BC is in arrears - i.e. if all services are paid up to date by the BC and if all service providers are regularly paid;
2. Study the conduct rules - as some schemes have clauses which ban pets, others are very definitely not child friendly and some limit access to communal areas. These and other restrictions can spoil the occupant's enjoyment of the sectional title unit.
3. Is the scheme self-managed or does it have a managing agent with a fidelity fund certificate from the Estate Agents Affair Board and who is registered with the National Association Of Managing Agents
4. Get proof of the current insurance position on the complex and the insured value of the unit you want to buy. How many insurance claims have been made during the past year? Is the insurance policy in accordance with the statutory requirements?
5. Get a copy of the most recent levy account from the owner to establish what monthly charges you will need to budget for;
6. Ensure that you get see the sectional title deed or a stamped exclusive use schedule or diagram, as the seller may not have the actual right to what he/she is using (store room / parking bay / garage) and may only be renting it;
7. Ensure that you know what the general standard of the common property in the complex is:
- Building maintenance (condition of paint / any visible disrepair / cracks or leaning walls);
- Condition of roads, walkways and stairways (uneven surfaces / crumbling tar / dirty railings);
- Condition of roofs, gutters and facia;
- Are there waterproofing guarantee in place (does the service provider still exist) and when last has it been reconditioned?
- Is the lift maintenance agreement in place and the lift inspection up to date? Maintenance of old lifts due to wear & tear is expensive and replacing it might be necessary;
- Garden upkeep or the lack of it is often a very important indicator about the state of affairs in the complex;
- Level of security and its efficiency. Are the wires of the electric fence straight or sagging? Is there back-up arrangements in place for power outages? How is access to the complex managed and are there any visible vulnerabilities?
- Is the swimming pool, children play area and/or leisure amenities clean and in a good working order?
8. If there are open ground in the complex, check on the sectional title plan and ask management, especially if it is a new complex, whether the developer has rights to extend as this can be very disruptive.