Buying a sectional title unit on auction

What you are buying: a section and a share

What you buy is a unit: a section shown on the sectional plan, together with an undivided share in the common property, apportioned according to the section’s participation quota (section 1, Sectional Titles Act). The common property is the land and every part of the buildings outside the sections, such as the roof, passages and gardens.

The quota sets the value of your vote where votes are counted by value, your share of the common property and your share of the levies, unless the scheme’s rules modify it (section 11, Sectional Titles Schemes Management Act). Every owner is a member of the body corporate (section 2), which runs the scheme through trustees under rules that bind owners and occupiers (section 10(4)).

Flats and townhouses come up regularly on our auctions: the results archive includes sectional title apartments in Pretoria North, Berea and Sandton. Whoever the seller, the checks below are yours to do (see property auctions).

Levies, the reserve fund and special levies

The levy is your share of the body corporate’s running costs. The Sectional Titles Schemes Management Act, in force since 7 October 2016, requires it to keep an administrative fund for running costs and a reserve fund for future maintenance and repair of the common property (section 3(1)(a) and (b)), both raised from owners in proportion to their quotas (section 3(1)(f)).

The regulations in force since 7 October 2016 set a floor: where the reserve holds less than 25% of the previous year’s administrative fund contributions, the budgeted reserve contribution must be at least 15% of the administrative budget, and the floor changes as the reserve grows, falling away once it matches the previous year’s administrative contributions (regulation 2, Sectional Titles Schemes Management Regulations). A thin reserve makes a special levy more likely.

A special levy is any contribution raised outside the budget approved at the annual general meeting (section 3(4)). The Act makes it due from whoever owned the unit when the trustees passed the resolution, and makes a new owner liable for a pro rata share from the date ownership changes (section 3(3)). How that is split in a sale is not settled: the body corporate may want the whole amount cleared before transfer, and the conditions of sale decide who bears it. Ask what has been raised or planned, and ask the conveyancer how it will be apportioned.

Arrear levies and the levy clearance certificate

The Deeds Office will not register transfer of a unit until a conveyancer certifies that the body corporate has confirmed that all moneys the seller owes it for that unit are paid, or provided for to its satisfaction (section 15B(3)(a)(i)(aa), Sectional Titles Act). That is the levy clearance certificate; a municipal rates clearance is needed too (section 15B(3)(b)). For an auction buyer:

1. Arrears do not disappear. They are settled before transfer, ordinarily by the seller; at an auction the conditions of sale decide whether they come out of the proceeds or are added to what you pay.
2. At a High Court sheriff’s sale they are yours. The prescribed conditions of sale in execution, as substituted with effect from 27 December 2024, make the purchaser liable for all levies due to a body corporate, payable within 10 days of the conveyancer’s request (Form 21, condition 9(b)). In a Magistrates’ Court sale, read the conditions on file rather than assuming they match Form 21, and ask the sheriff or the execution creditor’s attorneys for the levy and rates figures before you bid. Dynamic Auctioneers is not a sheriff and does not run sales in execution (see sheriff auctions explained).
3. The figure can be bigger than the levies. In Marsh Rose v Steinmuller, a sheriff’s sale buyer whose conditions mentioned only “levies” disputed an account that also included water and sewerage charges, interest and legal fees. On 2 November 2023 the Supreme Court of Appeal held that the body corporate, not being a party to his sale, could refuse its certificate until all moneys due were paid, legal costs of recovery included ([2023] ZASCA 143). His remedy lay against the sheriff; the court left open whether security can satisfy a body corporate. If you are in that position, take legal advice.

So get the clearance figures, or a current levy statement, before the auction. Arrears you agree to pay can also raise the value on which transfer duty is calculated (Transfer Duty Act section 6(1)(c), explained in the SARS Transfer Duty Guide, Issue 6, 25 July 2023); if the sale is a taxable supply by a VAT vendor, VAT applies instead (section 9(15)). Ask the conveyancer which applies (see transfer duty), and take the arrears, the tax on them and a margin for interest off your maximum bid; the transfer duty and auction cost calculators help.

The rules: pets, parking, letting and alterations

Every scheme has management rules (meetings, trustees, money, records), which change only by unanimous resolution, and conduct rules (how people live there), which change by special resolution of 75% by value and by number (sections 1 and 10, Sectional Titles Schemes Management Act, in force since 7 October 2016). Rules must be reasonable and apply equally to all owners (section 10(3)), and a change takes effect only once the chief ombud has certified it (section 10(5)). Ask for the consolidated set, not an old copy, and read it against your plans:

• Pets. Under the prescribed conduct rules you need the trustees’ written consent to keep an animal, which may not be unreasonably withheld (conduct rule 1).
• Parking. Vehicles go in the bay allocated to your section or in visitors’ parking (conduct rule 3).
• Alterations. Changing the external appearance of a section or its exclusive use area needs the trustees’ written consent, unless the change is minor and does not detract from the appearance of the section or the common property (conduct rule 5).
• Letting. The prescribed conduct rules do not deal with letting, so restrictions, including on short-term letting, come from a scheme’s own rules. Tenants are bound by the conduct rules whatever the lease says (conduct rule 7(4)).
• Use. Where the sectional plan shows what a section is for, using it for anything else, such as a business in a residential flat, needs the written consent of all owners (section 13(1)(g)), and municipal zoning by-laws may apply as well (management rule 30(c) and (f)). A refusal that is unfairly prejudicial can go to an ombud within six weeks (section 13(2)).

Exclusive use areas, parking bays and garages

A parking bay, garden or storeroom can be held in one of four ways:

• A section of its own. A garage or parking bay can be a utility section, an accessory to the flat (regulation 1). If so, it is a separate unit: check that the conditions of sale name it, or it will not transfer with the flat.
• A registered exclusive use area. A right to use part of the common property, registered under section 27 of the Sectional Titles Act. It is a real right of its own that can be bonded or leased (section 27(6)), so check that the conditions of sale include it.
• A rules-based exclusive use area. Allocated by the rules, which must include a scaled layout plan and a schedule of which owner each area belongs to (section 10(7) and (8), Sectional Titles Schemes Management Act). Check that the schedule names your section.
• Merely allocated. A bay the trustees have allocated to your section, without it being a section or an exclusive use area, remains common property: there is no exclusive use right to buy with the unit.

If a listing mentions a bay, ask which of these it is, and ask for the body corporate’s list of exclusive use areas, which shows whether each right comes from section 27 or a rule (management rule 27(2)(c)(ii)). Unless the rules make you pay those costs directly, the body corporate must charge an extra contribution for the area’s rates, insurance and maintenance (section 3(1)(c), Sectional Titles Schemes Management Act).

Insurance: the building and the rest

The body corporate must insure the buildings to their replacement value against fire (section 3(1)(h), Sectional Titles Schemes Management Act) and the further risks the regulations list, such as storm, flood and burst pipes (regulation 3 and management rule 23). The premium comes out of your levy. The policy must state a replacement value for each unit, and you carry the excess on damage to parts you must maintain.

Your contents, and damage to your section from a risk the scheme’s policy does not cover, are yours to insure (section 14). The body corporate must produce the policy to an owner or anyone the owner authorises in writing (section 3(1)(s)). Check when risk passes under the conditions of sale, often well before transfer, and insure from that date (see what happens after you win).

The documents to read before you bid

Ask early. A member, a registered bondholder or anyone a member authorises in writing may inspect and copy the body corporate’s records, which it must make available within 10 days (five for the rules) for no more than the reasonable cost of copies (management rule 27(4) to (6), in force since 7 October 2016). In an estate or liquidation sale the executor, trustee or liquidator counts as the owner (section 1, Sectional Titles Schemes Management Act), so ask the seller for a written authority.

1. Levy statement or clearance figures: levy, arrears, interest, legal costs, special levies and any utility charges the body corporate bills. In an estate, ask whether the homeowners’ association’s clearance is needed too: a scheme’s registered conditions can restrict transfer of a unit without the association’s consent (regulation 6(4)).
2. Audited financial statements and the budget, due at a general meeting within four months of year-end (management rule 26(4)). Look at the reserve fund and how much owners owe in arrears.
3. Minutes of recent general and trustee meetings: special levies, big repairs, disputes, legal action.
4. The maintenance, repair and replacement plan of major items expected to need work in the next 10 years, with estimated costs (management rule 22). A big roof or lift item against a small reserve is a special levy in waiting.
5. The sectional plan and title deed. Check your section, its exclusive use areas, and whether a right to extend the scheme is registered (the body corporate keeps details, management rule 27(2)(d)). Such a right must be disclosed to every purchaser in the deed of alienation, and if it is not, the sale is voidable at the purchaser’s option (sections 25(14) and (15), Sectional Titles Act). If one was not disclosed, ask an attorney before you act.

At our auctions, viewing times are published with each auction where a viewing is possible; some estate units cannot be viewed, so the documents matter even more. Bidders register and meet FICA checks before bidding opens, and property is sold voetstoots, as it stands, unless the conditions of sale say otherwise (buying on auction, voetstoots explained). Borrowing? Read buying on auction with a bond.

Disputes and the Community Schemes Ombud Service

Since 7 October 2016, disputes in a community scheme, which includes sectional title schemes and homeowners’ associations, can go to the Community Schemes Ombud Service (CSOS) instead of court. Anyone party to or materially affected by a dispute may apply for orders such as adjusting a levy that is incorrectly determined or unreasonable, an audit, or declaring a rule unreasonable or invalid (sections 1, 38 and 39, Community Schemes Ombud Service Act). Before you bid, check the minutes and ask the managing agent whether any CSOS application or order affects the scheme or the unit.

The CSOS lists a fee of R50 for conciliation and R100 for adjudication (CSOS questions and answers, checked 9 October 2026), set by its levies and fees regulations, in force since January 2017, which allow a waiver for low-income applicants. An adjudicator’s order can be appealed to the High Court only on a question of law, lodged within 30 days of the order being delivered (section 57), so speak to an attorney promptly.

Freehold houses in estates: the homeowners’ association

A house in a security or lifestyle estate is usually freehold: you own the erf, and a homeowners’ association (HOA) runs the shared roads, gates and amenities. The Sectional Titles Schemes Management Act does not apply; the levies and rules come from the HOA’s constitution. It is still a community scheme, so the CSOS covers it (section 1, Community Schemes Ombud Service Act). In estates with sectional title complexes, a unit owner can pay both a body corporate levy and an HOA levy.

Section 15B(3) applies only to sectional title units. For a freehold house, ask the conveyancer whether the title deed carries a condition requiring the HOA’s consent to transfer; if it does, expect to need the HOA’s clearance before registration. At a High Court sheriff’s sale the purchaser is liable for amounts due to an HOA too (Form 21, condition 9(b)). Many checks carry over (levy statement, rules, minutes, financial statements), but the sectional title rules on insurance, reserve funds and access to records do not: ask the HOA for its constitution, and insure the house yourself from the date risk passes. Our upcoming auctions list what is catalogued now.