Sign up with GoogleShareblocks are companies, and the apparent owners do not own a Title Deed, but are shareholders in the company that owns the whole complex or block. Sectional Titles mean actual ownership with a Title Deed, at least over a part of the whole, and some guaranteed use of some parts of the common areas.
When enough of the directors of the shareblock company decide to do so, they can "open the Sectional Title register". Existing owners can continue to own their shares, just the same as they ever did, or can elect to go through the process to have their unit registered as an own-able unit. That unit then ceases to be part of the company, and now belongs to the individual owner, who, correspondingly, no longer owns the shares in the shareblock company. Sometimes, this conversion is done when the unit is sold.
It seems that comparable flats or houses tend to fetch higher purchase prices if this conversion has already taken place, than if the flat is still owned under shareblock.
My questions are:
When enough of the directors of the shareblock company decide to do so, they can "open the Sectional Title register". Existing owners can continue to own their shares, just the same as they ever did, or can elect to go through the process to have their unit registered as an own-able unit. That unit then ceases to be part of the company, and now belongs to the individual owner, who, correspondingly, no longer owns the shares in the shareblock company. Sometimes, this conversion is done when the unit is sold.
It seems that comparable flats or houses tend to fetch higher purchase prices if this conversion has already taken place, than if the flat is still owned under shareblock.
My questions are:
- What kinds of costs are incurred to do this conversion, per unit? What kinds of fees are payable, say to the land registry? Extra conveyancing? Extra municipal taxes or fees? Presumably this will be payed by the current owner or, in a sale, perhaps by the incoming owner, i.e. the purchaser, who makes the Offer with such fees in mind.
- Is it the case that a converted property is worth more? (perhaps because banks are loath to give mortgages for Shareblocks)
- Why do some owners prefer to remain shareholders of the diminishing shareblock company, rather than convert? Are their any other reasons besides the costs, to resist having one's unit receive a Sectional Title. (perhaps if it ain't broke, don't fix it)
- Are such fees in themselves a sufficient deterrent? Is that all?
- What is the consequence, for a new buyer, that the converstion be done together with the sale? Extra costs? Special levies? More paperwork? Longer delays? How long?
- What happens to the Shareblock company once all the units are converted to Sectional Title?