What is a Sectional Title and What Does a Sectional Title Agreement Look Like?

Sectional title agreements are an important aspect of setting a good foundation for the management and regulation of common property. As market leaders in conveyancing, property law, property litigation, evictions and rent collections we deal with these and other agreements on a daily basis, and know how important it is to make sure they cover all involved parties fairly and equally. If you’re new to the property game, and want to learn a little bit more about what a sectional title is, and what a standard agreement might look like, we’ve got you covered right here. 

What is a Sectional Title Agreement?

A sectional title agreement is a document that describes the separate ownership of a unit within a group owned complex, or development. When you first apply for a bond on a sectional title property, one of the first steps that will happen when dealing with any of the leading banks is that they will need to have a look at the financials of the body corporate of the development or complex. This helps to give them an idea of how it is being managed, and whether it is worthwhile to approve a bond or not. 

Example: Standard Sectional Title Agreement

Sectional title agreements come in agreements of varying lengths, but typically they all have to tick a few boxes in order to be legitimate. This includes defining the body corporate, the owner, touching on various services (like water, electricity, garden management and more), payment terms and penalties for missing these. The idea is to leave as little as possible to the imagination, in order for all parties to be protected by the agreement. This doesn’t mean that it has to be excessively long, but at the end of the day everyone must agree to its contents equally. For a practical example of what a sectional title agreement looks like, have a look at our example right here.
Signing a sectional title agreement.

Do You Pay Rates and Taxes on a Sectional Title?

A common question people ask about sectional title agreements is whether they have to pay rates and taxes on said title. The short answer is yes, and owners will need to pay taxes on their individual units, as well as paying their rates directly to local municipalities. In the past this may have been levied by the body corporate, which then had to trickle it down to each individual owner in the form of a monthly levy. Make sure this is clear in your agreement, and that you understand what it means before you sign. 

Getting Help With Managing Your Sectional Title Agreement

If you need more advice on how to manage a sectional title, the team at Alan Levy Attorneys is always happy to step in to provide you with more details. If you’re worried about setting up or even amending a sectional title agreement, it’s best to turn to the experts in order to avoid unforeseen problems down the line. We handle anything to do with property law, in case you need further advice ranging from evictions to rental collections, title deeds, arrears collections and more. 

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