---
title: "Sectional title vs freehold in South Africa"
description: "What sectional title, freehold and HOA-governed full title actually mean in South Africa: levies, the body corporate, and what a buyer must check before signing."
url: "https://privately.co.za/guides/sectional-title-vs-freehold-south-africa"
country: "South Africa"
updated: "2026-08-16"
published: "2026-08-16"
author: "Chandre Niemand"
source: "Privately"
---

# Sectional title vs freehold in South Africa

*Chandre Niemand, Founder, Privately. Published: 2026-08-16.*

## Summary

Freehold means you own the land and everything on it outright, with no body corporate and no levies. Sectional title means you own a section of a building plus an undivided share of common property, and you must pay levies to a body corporate that maintains it. A full-title house on an estate sits in between: you own the erf outright, but a homeowners' association still charges levies and enforces rules over the roads and common areas.

## Three forms of ownership, not two

"Freehold" and "sectional title" get treated as opposites, but there is a common middle case in South Africa: a full-title house on an estate governed by a homeowners' association. All three show up on Privately, and the legal difference between them determines what you own, what you maintain, and what you pay every month regardless of whether the bond is settled.

Sectional title is defined by the Sectional Titles Act 95 of 1986. A **section** is the part of the building shown on the registered sectional plan as belonging to one owner: in practice, the space enclosed by the inner surfaces of your walls, floor and ceiling. Everything else in the scheme (driveways, gardens, roofs, structural walls, the swimming pool, the lobby) is **common property**, owned by all the owners together in shares proportional to their unit's participation quota. An **exclusive use area** is part of that common property set aside for one owner alone, such as a garden, a parking bay or a courtyard, either registered on the sectional plan or granted under the scheme's rules. Understanding which of the three you're getting matters before you view a listing, not after you've made an offer.

**What each form of ownership actually gives you**

|  | Freehold | Full title in an HOA estate | Sectional title |
| --- | --- | --- | --- |
| What you own | The land and everything on it, outright | The erf and the house, outright, plus compulsory HOA membership | A section, plus an undivided share of common property |
| Governing law | Ordinary title deed, no scheme | A contract (the estate's constitution), not the Sectional Titles Act | Sectional Titles Act and the Sectional Titles Schemes Management Act |
| Who maintains the structure | You, entirely | You, entirely; the HOA maintains only common areas | You inside your section; the body corporate on common property |
| Recurring charges beyond rates | None | HOA levies | Body corporate levies |

## Levies: what they cover, how they're set, and how a special levy bites

A sectional title body corporate runs two separate funds, and your monthly levy is your share of both. The **administrative fund** pays the scheme's running costs: common-area electricity and water, cleaning, gardening, security, the managing agent's fee, and insurance on the building structure (never your contents; that policy is yours alone). The **reserve fund** exists specifically to pay for the scheme's compulsory 10-year maintenance, repair and replacement plan, covering repainting, roof work, lift overhauls and waterproofing, so the cost is funded gradually instead of landing as one large bill when the roof finally needs replacing.

Both funds are set annually: trustees propose a budget, owners vote on it at the AGM, and your levy is your unit's participation quota (broadly, its size relative to the whole scheme) applied to that budget. Levies in a sectional title scheme are typically higher than HOA levies on an equivalent full-title house, because the scheme is also carrying the structure itself, not just the common areas.

A **special levy** is different: it is raised outside the annual budget when an unbudgeted or urgent cost arises: a burst geyser in the roof space, a failed lift motor, an unexpected legal dispute, an insurance excess after a storm. Trustees can raise one without a fresh owner vote where the scheme's rules allow it, and every owner is liable in proportion to their participation quota. Critically, liability follows **whoever owns the unit when the levy falls due**, not whoever owned it when it was decided, which is exactly why a buyer needs to ask about pending special levies before transfer, not after.

## The body corporate, trustees, conduct rules and the 10-year plan

The body corporate is not a separate company you join. It is all the owners collectively, and it comes into existence automatically the moment the first unit in the scheme is transferred. Owners elect trustees at the AGM to run the scheme day to day: approving expenditure, enforcing the rules, appointing (and firing) the managing agent, and deciding whether to raise a special levy.

Two sets of rules govern behaviour and management. **Conduct rules** cover the things owners actually notice (pets, noise, short-term letting, parking, alterations to your section), and schemes can add or amend their own on top of the prescribed default set. **Management rules** cover the mechanics of running the scheme: meetings, voting, levy collection, the reserve fund. Every scheme is legally required to maintain a reserve fund and keep it aligned with a 10-year maintenance plan for the common property's major capital items, under the Sectional Titles Schemes Management Act. A scheme that has skipped this, or underfunded it for years, is the single biggest red flag a buyer can find. It means a large special levy is a matter of when, not if.

## HOAs on full-title estates: how they differ

A homeowners' association is not created by the Sectional Titles Act at all. It is a private company or non-profit, and membership is compulsory because it's written into a restrictive condition on your title deed, not because a statute requires it. You own your erf and house outright, exactly as you would anywhere else. The HOA owns and maintains only the roads, perimeter security, communal gardens and any shared amenities, and its levies fund exactly that. Because there is no shared building to maintain, HOA levies are usually meaningfully lower than sectional title levies on a comparable property.

Do not assume an HOA sits outside the dispute-resolution system that governs sectional title. The Community Schemes Ombud Service Act defines "community scheme" broadly enough to include homeowners associations, share block companies and retirement schemes alongside sectional title, so CSOS can hear an HOA levy dispute too, not only a body corporate one.

## What a buyer must check before buying sectional title

This is due diligence a private buyer has to do themselves. An estate agent would normally chase these documents on your behalf, but there is no reason you can't request them directly from the seller, the managing agent or the trustees before you make an offer. When you're weighing up a [sectional title listing](/browse), ask for:

- **A levy statement** confirming the seller is up to date, and how far in arrears the unit has ever been.
- **The latest audited financial statements**, which show whether the scheme is actually solvent or running on unpaid arrears from other owners.
- **Minutes from the last one to two AGMs and any special general meetings**, which is where a proposed special levy or a contentious repair first surfaces, often months before it becomes a formal decision.
- **The reserve fund balance against the 10-year maintenance plan**: a fund that is materially behind the plan is a special levy waiting to happen.
- **Whether any special levy has been passed or proposed but not yet raised** (because liability follows the owner at the date it falls due, that could become your bill).
- **The insurance schedule**, to confirm the building's replacement value is current and the scheme isn't underinsured.
- **The conduct rules**, especially on pets, short-term letting and renovations, if any of those matter to how you intend to live there or let the unit.

## Levies and affordability: what you can actually bond

A bank bonds the purchase price, not your ongoing costs. Its affordability assessment looks at your income against your existing debt, and the new bond repayment has to fit within that; [bond originators](/bond-originators) can pre-qualify you against several banks' criteria at once. Levies, rates and building insurance are not part of that debt-to-income calculation; they're separate monthly costs you have to budget for on top of the bond repayment, and the bank does not check whether you can actually afford them.

That gap is where sectional title buyers get caught out. A bond that comfortably fits your income can still leave you stretched once a R2 500 monthly levy (and the special levy that follows it) is added on top. Ask for the levy statement before you make an offer, not after your bond is approved, and budget the levy as a fixed cost for as long as you own the unit, because unlike a bond it does not shrink over time.

## Selling sectional title: the levy clearance certificate

If you are selling a sectional title unit, the Sectional Titles Act will not let the transfer register without a conveyancer's certificate confirming that everything owed to the body corporate has been paid, or that provision has been made for it. In practice, the body corporate or its managing agent issues this as a **levy clearance certificate**, the sectional title equivalent of a municipal rates clearance figure. Order it early: a slow or part-time managing agent is one of the most common causes of a stalled [transfer](/guides/conveyancing-and-the-transfer-process), and if there's a dispute over the amount owed, the body corporate can withhold the certificate until it's resolved.

Selling sectional title privately does not remove this step, and it sits alongside, not instead of, your other seller obligations, including the [compliance certificates](/guides/compliance-certificates-when-selling-a-house) that apply to every South African sale. Settle any levy arrears, and clear up any special levy that's been raised against your unit, before you list.

## Frequently asked questions

### What is the difference between sectional title and freehold in South Africa?

Freehold means you own the land and structure outright with no body corporate and no levies. Sectional title means you own a section of a building plus an undivided share of the common property, and you pay levies to the body corporate that maintains everything you don't own individually.

### What do levies cover in South Africa?

Body corporate levies cover the administrative fund (common-area electricity and water, cleaning, gardening, security, the managing agent's fee, and structural insurance) and a compulsory contribution to the reserve fund, which pays for the scheme's 10-year maintenance, repair and replacement plan.

### Can a body corporate raise a special levy?

Yes. Trustees can raise a special levy outside the annual budget when an unbudgeted or urgent cost arises, such as a major repair or a legal dispute. Every owner is liable in proportion to their participation quota, and liability follows whoever owns the unit when the levy falls due.

### Is sectional title a good investment in South Africa?

It can be, but the levy is a real, recurring cost that a freehold comparison ignores, and it typically rises over time. Check the reserve fund is properly funded against the 10-year maintenance plan and confirm no special levy is pending before treating the numbers as final.

### What should I check before buying sectional title?

Request the levy statement, the latest audited financial statements, minutes from recent AGMs, the reserve fund balance against the 10-year maintenance plan, and confirmation of whether any special levy has been passed or proposed but not yet raised.

## Sources

- [Sectional Titles Act 95 of 1986 (gov.za)](https://www.gov.za/documents/sectional-titles-act-17-sep-1986-0000)
- [Sectional Titles Schemes Management Act 8 of 2011 (gov.za)](https://www.gov.za/documents/sectional-titles-schemes-management-act)
- [Community Schemes Ombud Service Act 9 of 2011 (gov.za)](https://www.gov.za/documents/community-schemes-ombud-service-act)
- [SARS FAQ: How to distinguish between a body corporate and a homeowners' association](https://www.sars.gov.za/faq/faq-how-to-distinguish-between-a-body-corporate-and-a-home-owners-association/)
- [Community Schemes Ombud Service (CSOS)](https://csos.org.za/)

## Related guides

- [How to buy a house privately in South Africa](https://privately.co.za/guides/how-to-buy-a-house-privately-in-south-africa)
- [Conveyancing and the property transfer process](https://privately.co.za/guides/conveyancing-and-the-transfer-process)
- [Compliance certificates you need to sell a house in South Africa](https://privately.co.za/guides/compliance-certificates-when-selling-a-house)

---

Figures verified 2026-08-12. General information about South African property practice, not legal or financial advice.

Source: Privately, https://privately.co.za/guides/sectional-title-vs-freehold-south-africa