Major differences between sectional title and home owners association

Martin Bester, the managing director of Intersect Sectional Title Services, says that there are predominantly two different types of cluster developments: sectional title schemes and homeowners associations, and these differ in the way the scheme is run and where the responsibility lies.

"In a home owners association you own the house and the erf it is built upon. Important to note is that a home owners association which, in the Western Cape is usually registered in terms of the Land Use Ordinance at the City of Cape Town, is usually established to look after the maintenance of the roads, security and communal areas within the complex and a levy is payable by all of the home owners for this upkeep."

Owners form a body corporate

In a home owners association, each owner of an individual property is automatically a member of the home owners association and the association will be responsible for establishing the rules of the development. When it comes to sectional title property, you own a unit, which comprises the section and the exclusive use areas, which could include parking bays and or gardens, as well as an undivided share in the common property.

"Sectional title therefore is a form of joint ownership in terms of which parts of buildings or complexes can be exclusively owned, in conjunction with shared ownership of other parts of the buildings and the land. The owners collectively form a body corporate, which is responsible for the day to day running of the scheme and the enforcement of the rules, as well to establish a fund to ensure that all costs are met and that the property is suitably maintained."

Bester says that home owners associations are similar to sectional title schemes in that each raise levies in order to offset the costs associated with administering and maintaining the common property. "There is also limited control over individual behavior of the members in each, by way of approved rules. Both schemes offer a form of communal living, which is attractive to certain people, based on the secure lifestyles some offer."

Common property is owned by association

A sectional title scheme involves ownership of common property in undivided shares, whereas a home owners association does not. In a home owners association, the common property, sometimes referred to as private or common areas is usually owned by the association.

Another fundamental difference is that the owner in a home owners association is responsible for the repairs and maintenance as well as the house owners insurance for his own property, whereas in a sectional title scheme the body corporate is responsible for the repairs and maintenance of the common property, which includes the external parts of the buildings, as well as the for insuring the buildings and fixtures contained in the scheme, and finances same by means of the levy raised."

Ownership in different levels

"Sectional title can provide for ownership in different levels on one piece of land that forms part of the common property, whereas in a home owners association each separately owned building is on a separate erf," Bester says. "Also, in sectional title, it is usual to have some parts of the common property made subject to specific rights of exclusive use in favour of particular owners or groups of owners. This concept is not ordinarily part of a home owners association."

"Additionally, the common property, sections and registered exclusive use areas in sectional title schemes are shown on one or more sectional plans, whereas the property in a home owners association is shown on a general plan or separate diagrams," concludes Bester.