Changes in our lives influence where we choose to live, work, and spend our leisure time.
If you are considering a move to an estate, it is essential to first understand what a Community Scheme is (and isn’t), the type of property ownership it offers, and if that type of ownership will best suit you and your lifestyle.
A
Community Scheme is a living arrangement where there is shared use and responsibility for the land and buildings, and includes, but is not limited to:
• Home Owners Association developments,
• Sectional Title development schemes,
• Share Block Companies, or
• Housing Schemes for Retired Persons such as Life Rights.
St John’s Village is a
Home Owners Association Development and offers two primary home ownership options:
• full title ownership of freehold properties, and
• sectional title ownership.
The
Home Owners Association ("HOA") and the
Sectional Title Schemes are governed by the Memorandum of Incorporation of St John’s Village Home Owners NPC and the Home Owners Association conduct rules.
Individual
Sectional Title Schemes within St John’s Village may have additional Body Corporate rules pertaining to their specific requirements.
3 similarities that Home Owners Associations and Sectional Title Schemes share- Both Home Owners Association developments and Sectional Title schemes offer an attractive form of communal living based on a secure lifestyle.
- Levies are raised in order to offset the costs of administering and maintaining the common property.
- The individual behaviour of residents is regulated by conduct rules.
7 differences between full title ownership and sectional title ownership1. Ownership The key difference between a
Home Owners Association development and a
Sectional Title scheme lies in the way ownership is defined.
In a
Home Owners Association, you own the buildings and the land on which the buildings stand (“the Erf”). Each owner obtains the registered title to a conventional property held under a title deed.
With
Sectional Title you own:
• a “
section” that comprises a building, or part of a building, on a piece of land that has been converted into a sectional title scheme.
• an
undivided share of the common property used by all the owners, for example, the roads.
• parts of the common property delineated as
an exclusive use area and conferred on the owner of the section, for example, a private garden area.
On registration of transfer, a registered title deed is issued in the name of the new owner as proof of ownership.
Depending on the structure of the Scheme either a Notarial Deed of Cession is issued in respect of exclusive use areas or the exclusive use areas are held in terms of the rules applicable to the Scheme.
2. Full ownership versus shared ownership
In a
Home Owners Association development, you have:
•
direct ownership of your land and buildings, plus
•
indirect ownership where all homeowners have the right to use the estate’s common property.
In
Sectional Title schemes, each Section or “unit” is abstractly divided into three parts:
• a
section that can either be a free-standing or a co-joined home;
•
common property that is owned, in undivided shares, by all the owners in the sectional title scheme; and
•
exclusive use rights where an owner may enjoy the right to use a designated part of the common property. For example, a private garden.
3. Ownership of common property
In a
Home Owners Association development, the common property is owned by the Home Owners Association.
In
Sectional Title the common property within the scheme is owned by all the registered owners in undivided shares.
4. Conduct Rules
The establishment of conduct rules is one of the main functions of the
Home Owners Association. These rules are intended to encourage harmonious living within the community scheme and to uphold the standard of the buildings and common areas.
Sectional Title also has rules to ensure that people act reasonably and do not negatively impact the living arrangements of others.
In St John’s Village, sectional title homeowners are both members of their respective
Body Corporate and of the
Home Owners’ Association. As such, they enjoy full access to the Estate and are bound by the Home Owners Association rules as well as the rules of their respective Sectional Title scheme.
5. Levy
In a
Home Owners Association development, each freehold property is a separate "erf'. The homeowner is responsible for insuring the buildings and fixtures on their property as well as for maintaining their home and garden.
The
Home Owners Association manages and maintains the common roads, verges, communal areas, and general security within the Estate.
In St John’s Village, each freehold homeowner pays the same levy, a "site" levy, irrespective of the size of their land or the value of their buildings to the
Home Owners Association. Levies are used to cover these management and maintenance costs.
In a
Sectional Title scheme, the owners collectively form a Body Corporate. The Body Corporate is responsible for the upkeep of all common property in the scheme.
The Body Corporate establishes a fund and collects levies to ensure that these running costs are met. Levies include the insurance, repairs, and maintenance of the exteriors of all the homes and buildings within the scheme including the cutting of the grass.
Levies are calculated according to the Participation Quota (PQ) for the scheme. The PQ is determined by dividing the floor area for each section by the sum of the floor areas of all the sections in the scheme. The PQ for a unit is then shown as a percentage of the total floor area.
Owners with larger units are responsible for a larger portion due to their greater share of the common property.
In St John’s Village sectional title owners also pay a contribution, proportional to the size of their section, to the
Home Owners Association. This contribution goes towards the upkeep of the greater Estate’s roads, verges, and common property. Sectional title levies are paid in two parts; one payment to the Home Owners Association and one to their respective Body Corporate.
6. Exclusive Use Rights
In a
Home Owners Association development owners have no right of exclusive use over common property.
In
Sectional Title schemes, it is usual to have some parts of the common property made subject to specific rights of exclusive use in favour of a particular owner or groups of owners. Private gardens are an example of an exclusive-use area.
7. Legislation
Home Owners Associations are either non-profit companies or common law associations. There is no national statute that specifically regulates the formation or operation of Home Owners Associations.
However, the Companies Act applies to Home Owners Associations that are formed as non-profit companies.
St John’s Village Home Owners Association NPC is a registered non-profit company as defined in the Companies Act and is registered as St. John’s Village Home Owners Association NPC – registration No. 2015/036247/07.
The Memorandum of Incorporation governs the duties of the Home Owners’ Association and these duties generally consist of :
• overseeing the maintenance of all buildings and common areas including roads, verges, roads, and gardens,
• ensuring residents comply with the estate rules,
• managing the supply of services to the estate and the service providers supplying services to the estate, and
• ensuring that activities in the estate comply with local municipal laws.
The legislative laws that apply to
Sectional Title schemes are the Sectional Titles Act (STA) and the Sectional Title Management Act (STMA).
When you buy into a sectional title scheme you automatically become a member of the Body Corporate of that scheme. The Body Corporate, in turn, elects Trustees whose duties include, but are not limited to:
• the setting up a budget for the administration and reserve levy funds into which Body Corporate levies are paid,
• management,
• maintenance and administration of all the common property within the Scheme,
• arranging insurance of the buildings and common property,
• enforcing the Management and Conduct Rules,
• reporting to the Home Owners Association, and
• formulating, budgeting, and acting on a 10 Year Maintenance Plan.
Community Schemes Ombud Service
The Community Schemes Ombud Service (‘CSOS’), established in terms of the Community Schemes Ombud Services Act of 2011, promotes good governance within Community Schemes, Home Owners Associations, and Sectional Title schemes.
It provides education and information to raise awareness of the rights and obligations within community schemes and also offers an alternative dispute resolution service.
For more information on the services offered by CSOS email
[email protected] or call 010 593 0533.
In conclusion
Estate living offers numerous advantages for those looking for a quiet, safe, and peaceful lifestyle.
While the cost of homes may be considered high, the benefits of beautiful landscaping, entertainment amenities, and community spirit, make estate living an attractive option to consider.
To find out more, or to visit the estate, contact the Sales Office, St John’s Village Real Estate.
Email
[email protected] or call 033 032 0590,
