As the demand for housing increases and the supply of suitable available land decreases, property owners who have large properties and unused space have an opportunity to capitalize on their investment and generate additional income. There are two options available to those who are looking to take advantage of the potential their properties, which is to sectionalise or subdivide.
Subdivision is a rather lengthy process. When land is subdivided, the erf is divided into two or more portions. The newly subdivided erf will have its own erf number and the owner who acquires this land will acquire the full rights and title to the entire newly subdivided portion. To establish if the land is suitable for subdivision, a town planner and land surveyor need to be consulted as there may be area-specific restrictions on the minimum erf size and zoning. Once this has been done, a Conveyancer must be contacted to establish if there are any title deed restrictions on subdivision. The local municipality will then, after a process of deliberation with all relevant departments, issue approval subject to certain conditions imposed by them.
The process of sectionalising, however, is simpler and quicker than that of subdivision. When land is sectionalized, the new ‘section(s)’ remain part of the mother erf. A sectional title plan is drawn up by a land surveyor and the sections are identified by section numbers thereon. This usually comprises of units, exclusive use areas, and an undivided share in communal areas to be shared by the respective owners. As only two sections are required to open a sectional title scheme, one can build two free standing homes with garages and gardens. The homes will then form the section and the garages and gardens can be allocated as exclusive use areas to the respective owners.
Subdivision is a good idea for those who have a large piece of land and would like to make an extra profit whilst reducing maintenance costs. Once the land is subdivided and sold to the new owner, that owner then has the freedom to use and enjoy their property. However, subdividing takes time and may be costly, involving many steps and procedures such as fulfilling all conditions of subdivision and having to obtain neighbours’ consent, to name a few.
When sectionalizing a property, you do not need to obtain your neighbours’ consent as it would relate to existing buildings that have approved building plans. The land surveyor will certify that the buildings have been built in accordance with the approved building plans and zoning regulations. If all regulations have been complied with, there will be no need to wait for the local municipality to approve. However, ownership of a section in a sectional title scheme is restricted as it is regulated and governed by the Sectional Titles Act 95 of 1986, Sectional Titles Scheme Management Act 8 of 2011, Community Schemes Ombud Service (CSOS), and the management and conduct rules of the scheme which will be enforced by the body corporate.
Deciding on whether to subdivide or sectionalise is a decision that should only be made following in-depth research and consultation with professionals.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).