Full title ownership
This kind of ownership is often what we think of when someone speaks of property ownership. It is the unencumbered right of ownership of a property and offers the owner the most complete or comprehensive control over the property.
Both the buildings as well as the land on which they stand are included in full title ownership, and the owner of such a property is entitled to do with the property as he or she sees fit.
This freedom, however, does come along with certain limitations. Firstly, full title ownership is subject to the restrictions or limitations imposed by the law, including any limited real rights that may held by third parties. These can take the form of rights held by a mortgagee (e.g. a bank will have a limited real right in respect of the home loan provided) or Homeowners Association, or even a servitude allowing a non-owner use of the property or part thereof (e.g. a neighbour may have the right to use a road that passes through the individual’s property).
In addition, all ownership is also governed by the bylaws of the local council and its regulations. Therefore, an owner is required to use and enjoy the property within the bounds of these regulations.
Sectional title ownership
Sectional title ownership is the ownership of a unit within a complex or development. These are typically semi-detached houses, townhouses and apartments that form part of a sectional title scheme.
Owners of sectional title units own the individual property within the complex and will be responsible for the regular costs involved in home ownership such as the mortgage repayments and service fees. In addition, however, a sectional title owner will be required to pay a levy to the body corporate for the management and upkeep of the sectional title scheme and the common areas.
Sectional title ownership is often more affordable than full title ownership, and many also consider sectional title ownership to be more secure and to offer a greater sense of community.
As an owner of a sectional title unit, there are additional rules and regulations which need to be taken into account. In addition to the standard laws and bylaws that apply, this form of ownership is also subject to the body corporate management and conduct rules, which deal with various issues such as having pets.
There is also increased limitation on owners when it comes to alter, renovate and expand your unit, as this will require body corporate approval prior to commencement.
Sectional title ownership is similar to gated communities where a Homeowners Association is created in order to govern such a community/security village. These will, however, consist of full title stands or erven and not be sectional title.
A long-term lease as a limited real right is considered a form of ownership as, unlike the more common short-term rentals, it entitles the lessee to a limited real right over a property for an agreed period of time, ranging from 10 to 99 years.
A long-term lease, along with all the terms of the agreement, is registered and an endorsement is made against the property’s title deed in the Deeds Registry. This affords both the lessee and the lessor security in terms of the real rights and obligations afforded to each party as a result of the agreement.
There is reduced flexibility in this form of ownership, i.e. what may be done to the property for the duration of the lease is limited based on the terms as agreed at the start of the lease.
A complication with this form of ownership relates to the agreed upon rent and any increases during the lease period. For example, if the interest rate goes up, an amendment would need to be signed or a provision as agreed upon at the start would have to be applied to accommodate this increase.
Written by Wessel de Kock