Sectional Title Levies: Understanding the Costs of Shared Ownership

 Sectional Title Levies: Understanding the Costs of Shared Ownership

 

If you are considering purchasing a property in a sectional title scheme, it is important to understand the concept of sectional title levies. Sectional title levies are regular financial contributions made by owners of units in a sectional title scheme to cover the shared costs of maintaining and managing the common property and amenities.

 

What do sectional title levies cover?

 

Sectional title levies are used to fund the day-to-day expenses of running a sectional title scheme. These costs can include:

1.    Maintenance and repairs: Sectional title levies are used to cover the costs of maintaining and repairing the common property, such as the building's structure, roofs, and plumbing systems.

2.    Security and insurance: Levies also contribute to the costs of providing security measures for the scheme, such as security guards, access control systems, and CCTV cameras. Additionally, levies cover the cost of insurance for the building and common property.

3.    Utilities and services: The levies contribute to the payment of utilities such as water and electricity for the common areas, as well as the costs of services such as cleaning and gardening.

4.    Administration and management: Levies are used to cover the administrative and management costs of the scheme, which may include salaries for staff, legal fees, and accounting services.

 

How are sectional title levies calculated?

 

Sectional title levies are typically calculated based on the participation quota (PQ) of each unit. The PQ is a percentage assigned to each unit, which represents its proportionate share of the overall value of the scheme. Levies are then calculated by multiplying the PQ by the total budget for the scheme.

 

It is important to note that sectional title levies can vary from scheme to scheme, depending on factors such as the size and complexity of the scheme, the amenities and services offered, and the financial management of the scheme.

 

Understanding the costs associated with sectional title levies is crucial for potential buyers to make informed decisions about their investment. It is recommended to thoroughly review the financial statements and budgets of the scheme before making a purchase, as well as to consult with a professional, such as a property attorney or a managing agent, who can provide guidance on the financial implications of sectional title ownership.