Sectional Title vs Freehold Transfer Costs — What's Different?

Freehold vs Sectional Title — Key Differences

When you buy a freehold property, you own the land (known as an erf) and everything built on it outright. You have full dominion over your property — you can extend, renovate, or alter it subject only to municipal building regulations and any conditions of title. This is the traditional form of property ownership in South Africa, and it remains the most common type in Pretoria's established suburbs such as Waterkloof, Hatfield, Brooklyn, and the eastern suburbs.

Sectional title is fundamentally different. You own a section (your unit) within a sectional title scheme, together with an undivided share of the common property — corridors, lifts, gardens, parking areas, and the structural elements of the building. The Sectional Titles Act 95 of 1986 governs the creation and registration of sectional title schemes, while the Sectional Titles Schemes Management Act 8 of 2011 governs their day-to-day management through the body corporate.

Pretoria has both types extensively. Freehold houses are found throughout the suburbs, while sectional title units are common in apartment complexes, townhouse developments, and retirement villages across areas like Centurion, Faerie Glen, Garsfontein, and the CBD. Understanding the differences matters because they directly affect the transfer process, the costs involved, and the ongoing obligations you take on as an owner.

Transfer Costs That Are the Same

The core transfer costs — the ones that make up the bulk of what you pay — are calculated identically for freehold and sectional title properties. Transfer duty is determined by the purchase price according to the same SARS sliding-scale brackets, regardless of property type. Whether you buy a freehold house in Lynnwood for R3 million or a sectional title apartment in Menlyn for the same price, the transfer duty payable to SARS is the same amount.

Conveyancing attorney fees are similarly unaffected by property type. The Law Society of South Africa (LSSA) tariff guidelines, which most conveyancing attorneys follow, are based on the purchase price — not on whether the property is freehold or sectional title. The Deeds Office levies are likewise determined by the transaction value, not the ownership structure. So the three major components of transfer costs — transfer duty, attorney fees, and Deeds Office levies — are the same for both types. Use our transfer cost calculator to estimate these core costs for any purchase price.

Additional Costs for Sectional Title

Where sectional title transfers differ is in the additional administrative costs that arise from the body corporate and managing agent structure. These costs are not large relative to the purchase price, but they add up and should be factored into your budget. In total, expect to pay an additional R2,000–R5,000 on a sectional title transfer compared to a straightforward freehold transfer.

These additional costs are typically reflected in the conveyancer's statement of account and are payable before transfer can be registered. The seller is responsible for the levy clearance and any outstanding levies, while certain admin fees may fall to the buyer depending on the managing agent's fee structure. Your conveyancing attorney will confirm exactly who is liable for each cost based on the terms of the offer to purchase and the managing agent's requirements.

Levy Clearance Certificate

The levy clearance certificate is a critical document in any sectional title transfer. It is a written confirmation from the body corporate (or, in practice, the managing agent acting on behalf of the body corporate) that all levies — both ordinary monthly levies and any special levies — have been paid up to date. Without this certificate, the Deeds Office will not register the transfer of a sectional title unit.

The seller is responsible for obtaining and paying for the levy clearance certificate. This means the seller must settle any arrear levies before the certificate can be issued. The conveyancing attorney applies for the levy clearance alongside the municipal rates clearance certificate, typically early in the transfer process, to avoid delays. The managing agent usually requires 5–10 working days to process and issue the certificate.

The levy clearance covers all amounts owing to the body corporate: ordinary monthly levies, special levies, any interest on late payments, and any other charges the scheme may impose. The managing agent will calculate the exact amount owing and provide a figure to the conveyancer. The seller must ensure these are paid — either from the proceeds of the sale or from their own funds — before the certificate is released.

Special Levies — Who Pays?

A special levy is a once-off charge approved by the body corporate for a specific purpose — typically major maintenance such as painting the building, waterproofing, roof repairs, upgrading lifts, or repaving common areas. Special levies can be substantial, sometimes running to tens of thousands of rands per unit, depending on the scope of the work and the number of units in the scheme.

The general rule is that if a special levy has been raised (approved by the body corporate at a general meeting) before the date the offer to purchase is signed, the seller is liable for it. However, this is not absolute — the offer to purchase should specifically address the question of special levy responsibility. A well-drafted OTP will contain a clause dealing with special levies, making it clear whether the seller or buyer is responsible for any levies raised before or after the sale date.

Buyers should protect themselves by requesting the latest body corporate minutes and financial statements before signing the OTP. These documents will reveal whether any special levies have been approved, are under discussion, or are likely to be raised in the near future. A scheme with a healthy reserve fund is less likely to impose special levies than one that has been underfunded. Your conveyancing attorney or estate agent should advise you on what to look for.

Body Corporate Rules and Restrictions

Every sectional title scheme operates under two sets of rules: management rules (which deal with the governance and financial management of the scheme) and conduct rules (which deal with day-to-day living within the scheme). These rules are registered at the Deeds Office and are binding on all owners and occupiers. They do not directly affect the transfer costs, but they fundamentally affect your rights and obligations as an owner.

Common restrictions found in conduct rules include limitations on pet ownership (size, breed, number), restrictions on short-term letting (such as Airbnb), noise regulations, parking allocation, use of common areas, and requirements for alterations or additions to units. Some schemes also require that the trustees approve a prospective buyer before the sale is finalised, although this is less common and cannot be used to discriminate unfairly.

The managing agent can provide copies of the management rules, conduct rules, and the most recent financial statements on request. Buyers should review these documents carefully before committing to a purchase. If a scheme prohibits pets and you have a dog, or if it bans short-term letting and you intend to use the unit as an Airbnb investment, discovering this after signing the OTP can lead to costly disputes.

Freehold Properties in Estates

Pretoria has a significant number of freehold properties located within gated estates, security complexes, and lifestyle developments — areas such as Midstream Estate, Equestria, Silver Lakes, Mooikloof, and The Wilds. These properties are not sectional title — they are freehold erven, and each owner holds a separate title deed for their stand. However, they are subject to a homeowners' association (HOA) which functions similarly to a body corporate.

The HOA imposes monthly levies for estate management, security, communal maintenance, and shared amenities. When a freehold property in an estate is sold, the HOA requires a levy clearance certificate confirming that the seller's levies are up to date. This is functionally identical to the body corporate levy clearance for sectional title. The HOA may also charge a clearance fee and, in some cases, a joining fee for the new owner.

The additional costs for transferring a freehold property in an estate are therefore similar to those for sectional title: levy clearance fee, possible admin fee, and any outstanding levies. The conveyancing attorney will identify whether the property is subject to an HOA and apply for the relevant clearance as part of the transfer process. If you are buying in a Pretoria estate, budget for these additional costs in the same way you would for a sectional title purchase.