How HOAs are Different from Sectional Title Schemes
A sectional title scheme divides a building into sections that are owned individually, with the common property owned jointly and managed by a body corporate. A homeowners association covers separately owned properties that share infrastructure such as roads and security. The difference is ownership: what you own outright, and what you own a share of.
Many people might ask about the difference between HOA (Homeowners Associations) and Sectional Title Schemes as they move from an apartment building to the suburban areas or vice versa. In this article, JLM Property sets out a guideline to rely on when it comes to this question. Let’s look at the main characteristics of an HOA and the general differences to sectional title schemes. The main difference lies in the way that ownership is defined in the properties and what services are each responsible for.
Homeowners Associations (HOAs)
HOA schemes are generally consisting of a group of individually owned properties that share common infrastructures, such as roads, security services, parking bays and recreational facilities. In other words, it provides the benefits of exclusive ownership of the home but still provides the benefits of communal living.
An HOA is founded to manage and maintain common areas such as roads and ensure general security. It is a separate legal entity from its members, registered either as a non-profit company with the Companies and Intellectual Property Commission, or established as a common-law voluntary association with its own constitution. Membership is normally compulsory, tied to a condition in the title deed of each property. Individual members have no direct right, title or interest in the association’s funds or assets. The homeowners are only directly responsible for the property they own. They have to solely deal with property insurance, utilities, taxes and other service costs that might occur. The main function of the HOA depends on the funding document but generally consists of the below:
- Oversee and arrange the maintenance of all communal buildings and areas within,
- Managing all the agreements with third parties (either local authorities or contractors) that supply any type of service to the property and its owners,
- Ensure that all activities within the estate comply with local municipal laws.
Sectional Title Schemes
The fundamental idea behind sectional title schemes is the division of a property into parts that are exclusively owned by individual owners. Also, other parts that are jointly owned in undivided shares, referred to as “common property”. This way you can both have joint and exclusive ownership within a building or property.
As an example, you could exclusively own your flat within a building but you would be having shared ownership of common areas such as the garden or the main entrance. Also, there could be areas, like the parking lot, that you do not own but you have the exclusive right to use. In the case of a sectional title scheme, your levies might be higher than in an HOA as this not only deals with maintenance and management but also includes building insurance. In sectional title schemes, the body corporate has elected trustees from the member homeowners whose duties usually include:
- Setting up a budget and reserve funds that are then used for managing and maintaining the common property,
- Arranging the insurance of the property,
- Dealing with local authorities and utility providers.
The differences side by side
| Sectional title scheme | Homeowners association | |
|---|---|---|
| What you own | A section of a building, plus an undivided share of the common property | A whole property, outright |
| Managed by | A body corporate, run by elected trustees | The association, run by an elected committee or directors |
| Governing law | Sectional Titles Act and the Sectional Titles Schemes Management Act | Its own constitution, or the Companies Act where it is a non-profit company |
| Building insurance | Arranged by the body corporate, paid through the levy | Each owner insures their own building |
| Exterior maintenance | Body corporate, for the common property and the building exterior | Each owner, for their own property |
| Levies typically cover | Management, common property maintenance, building insurance, reserve fund | Shared infrastructure such as roads, security and recreational areas |
| Falls under CSOS | Yes | Yes |
What both have in common
For all the differences above, both types of scheme sit under the same dispute resolution framework. The Community Schemes Ombud Service covers every community scheme in South Africa, including sectional title schemes, homeowners associations, share block companies, retirement housing schemes and housing co-operatives. Both pay CSOS levies, both must lodge their rules, and owners in both can take a dispute to CSOS rather than to court.
Both also carry obligations that owners are often surprised by, from how POPIA applies to the personal information a scheme holds to when a conduct rule is actually enforceable.
Conclusion
As you can see, the responsibilities are rather similar but there is one main difference you need to consider; the body corporate in sectional title schemes is responsible for the insurance of the property and to carry out repairs of the common areas and the exterior of the building. Whereas HOA schemes the owners are individually responsible for both the interior and exterior of the property and its insurance.
Where that line falls in practice is a common source of argument, particularly on repairs that start in one place and surface in another. Who pays for that pipe? works through exactly that question.
Common questions
What is the difference between a sectional title scheme and an HOA?
In a sectional title scheme you own a section of a building plus an undivided share of the common property, and a body corporate manages it. In a homeowners association you own a whole property outright, and the association manages shared infrastructure such as roads and security. Ownership is what differs; the management role is similar.
Does the Sectional Titles Schemes Management Act apply to homeowners associations?
No. The Sectional Titles Schemes Management Act, and the prescribed management and conduct rules that come with it, apply to sectional title schemes only. A homeowners association is governed by its own constitution or memorandum of incorporation, and by the Companies Act where it is registered as a non-profit company.
Who insures the building in a sectional title scheme?
The body corporate insures the building itself, including the common property and the exterior, and that cost sits inside the levy. It is one of the main reasons sectional title levies are often higher than HOA levies. Owners still insure their own contents, and usually any improvements made inside their section.
Does CSOS cover homeowners associations?
Yes. The Community Schemes Ombud Service covers all community schemes, including sectional title schemes, homeowners associations, share block companies, retirement housing schemes and housing co-operatives. Both types of scheme pay CSOS levies, and owners in both can use its dispute resolution service instead of going to court.
Are HOA levies lower than sectional title levies?
Often, though not always. A sectional title levy usually covers building insurance and the maintenance of the common property and the building’s exterior, which an HOA levy generally does not. An HOA owner carries those costs directly instead, so the total cost of ownership is not necessarily lower.
Talk to JLM Property
JLM Property is a managing agent for commercial and industrial sectional title schemes and property owners associations across Cape Town, established in 2008 and registered with the Property Practitioners Regulatory Authority. To discuss the management of a scheme, contact JLM Property on 021 201 7330 or at [email protected], or request a management quote.
Last updated: September 2026
