Sectional Titles

Key differences

There seems to be some confusion of late as to the differences between home owners' associations and sectional title schemes. Sectional title is a legal arrangement in terms of which parts of buildings can be exclusively owned, in conjunction with shared ownership of other parts of the buildings and the land.

The fundamental concept that underlies this type of title is an abstract division of buildings into some parts that are owned in undivided shares by all participants (referred to as 'common property') and other parts that are exclusively owned (referred to as 'sections').

Sectional titles
The Sectional Titles Act, a national statute that applies to the formation and operations of all sectional title developments, also makes provision for 'exclusive use rights' in terms of which the owner of a section, who is also the co-owner of all the scheme's common property, may enjoy the benefits of an arrangement with the other co-owners that s/he alone will have the right to use a specified part of the common property.

Home owners associations
Home owners' association (HOA) developments, by contrast, operate on the basis of a combination of direct and indirect conventional ownership. There is no special type of title involved and no national statute that specifically regulates their formation or operations, although the Companies Act applies to those HOAs that are formed as non profit companies.

In an HOA development, each owner obtains registered title to a conventional property held under a title deed and described on a registered diagram or general plan ('kaart en transport') as with any other conventional land in a South African township.

But in addition, each owner of an individual property in an HOA development is automatically a member of the home owners' association that is usually the registered owner of the development infrastructure. In this case, each owner has indirect rights to the HOA's property as well as the other rights and obligations that are associated with that membership.

Home owners' associations are one of the biggest and fastest growing sectors of the South African property market. There is a considerable need for knowledgable managers for these associations, and thus HOA management can be a lucrative niche for property managers.

HOA Management course
Paddocks is delighted to present the second presentation of the Home Owners' Association Management course, the first and only course of its kind in the country. The 10-week part-time course, is presented entirely online through Paddocks' innovative online training platform.

The course covers the management of both kinds of home owners' associations: those created in terms of section 21 of the Companies Act and those that are non-profit common law associations. The course is convened by sectional title and property expert Prof Graham Paddock.

The course starts on 6 September 2010, and registrations close on 27 August 2010. Please contact Kate on 021 685 4775 or for further information.

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