An interactive component to this edition of Paddocks Press, the exclusive use tutorial will test your knowledge of two different types of exclusive use areas. Answers are provided at the end of this tutorial.
All the owners of sections in a scheme own all the common property in undivided shares. The participation quota allocated to a section in terms of the sectional plan determines the size of the share in the common property allocated to that section.
In principle all owners can use and enjoy all parts of the common property at all times. They all have a corresponding duty not to do anything that would prevent their co-owners from exercising the same rights.
Sections 27 and 27A of the Sectional Titles Act, 1986 (“the Act”) provide for two different types of exclusive use areas.
SECTION 27 – REGISTERED EXCLUSIVE USE RIGHTS
In terms of section 27 of the Act, a developer can arrange for areas of common property to be surveyed and shown as “exclusive use areas” on the sectional plan. The developer can then cede the “exclusive use rights” to owners of sections when the plan is registered.
By way of a unanimous resolution the owners in a scheme may create new registered exclusive use rights that can be transferred to owners. The new exclusive use areas to which the rights will apply must be surveyed, shown on a sectional plan of extension and must not encroach upon any existing registered exclusive use area. Then the body corporate can cede the rights to those new exclusive use areas to the relevant owners.
Exclusive use rights in terms of section 27 of the Act can be bonded. The purchaser or holder of this type of exclusive use right can offer those rights as security for a loan with his unit. Both the unit and the exclusive use rights are then described in and made subject to the terms of the mortgage bond.
Rights of exclusive use under section 27 of the Act are “real rights” to immovable property. A person entitled to those rights can enforce and protect them against any other person by instituting legal proceedings.
SECTION 27A – RULE-BASED EXCLUSIVE USE RIGHTS
Section 27A provides for a second type of exclusive use rights. A developer or the body corporate of a scheme can make rules that confer rights of exclusive use on its members.
The areas to which these exclusive use rights apply are shown on a scale layout plan which is included in the rule. The layout plan must clearly indicate the location of the exclusive use areas and allocate a distinctive number to each. The rule must specify the purpose for which each exclusive use area may be used and include a schedule showing the allocation of the use rights to section owners.
Exclusive use rights conferred by rules are “personal rights” only effective against the body corporate of the scheme, all other owners and occupiers of units, i.e. only those people who are bound by the rules in terms of the Act.
Exclusive use rights conferred by rules, being personal rights, cannot be bonded.
“TRANSFER” OF EXCLUSIVE USE RIGHTS
Exclusive use rights under section 27 of the Act are ceded (transferred) by registration of a notarial deed of cession. Normally the rights to an exclusive use area are sold and ceded at the same time the linked unit is transferred.
Where rules confer exclusive use rights on the owner “from time to time” of a specified section, a transfer of the unit automatically has the effect of transferring the exclusive use rights.
Some rules allocate the exclusive use rights to specific named persons and some include provisions for unregistered cessions of those exclusive use rights from one owner to another. Where rules name the person entitled to exclusive use rights but do not cater for transfer of these rights, the only way to reflect a transfer of the rights, either from a seller to a purchaser or from one existing owner to another, is to amend the rules. Notification of the amendment must then be lodged with the Registrar of Deeds before the amendment takes effect.
COSTS ASSOCIATED WITH EXCLUSIVE USE AREAS
Section 37 of the Act provides that every owner who is entitled to exclusive use of an area of common property must be required to pay an additional contribution to the body corporate’s administrative fund.
This applies whether the exclusive use rights have been registered in terms of section 27 or conferred under section 27A by way of scheme rules.
The body corporate must collect from each person entitled to exclusive use rights its estimate of the costs of rates and taxes, insurance and maintenance of their exclusive use area, including the provision of electricity and water.
IMPROVEMENTS TO EXCLUSIVE USE AREAS
Prescribed Management Rule 68(1)(vi) says that an owner “shall not construct or place any structure or building improvement on his or her exclusive use area, without the prior written consent of the trustees, which shall not be unreasonably withheld and that the provisions of section 24 and section 25 or other relevant provisions of the Act or the rules, will not be contravened”.
This means that the trustees must approve a reasonable request by an owner to make an improvement to an exclusive use area but may not give permission for any works that are, in reality, an extension of the owner’s section or the creation of a new section.
1. What is the effect of holding rights to an “exclusive use area” (EUA) in a scheme?
a) A specific part of the common property is set aside for use by just one owner (and those who use his/her section).
b) The EUA ceases to be part of the common property.
c) No owner other than the one who holds rights to that EUA can use it.
d) The owner who holds rights to the area must maintain and repair it.
2. To what uses can an exclusive use area be put?
a) Parking bays only.
b) Parking bays, carports, garages, gardens and yards.
c) Swimming pools.
d) Any purpose at all, as long as it is legal!
3. Who owns the common property in a sectional titles scheme?
a) The body corporate.
b) The trustees.
c) The owners.
d) The State.
4. The common property is said to be owned in “undivided shares”. What does that mean?
a) Each owner of a section also owns a particular piece of the common property.
b) All owners have an interest in all parts of the common property, which interest may be subject to exclusive use rights in favour of another owner.
c) Any owner can use any part of the common property.
5. What determines the size of an owner’s share in the common property?
a) The price he/she paid for his/her unit.
b) The size of the unit.
c) The participation quota allocated to that owner’s section.
6. Subject to exclusive use rights, owners can use any part of the common property. But they also have a corresponding duty not to do anything that would prevent their co-owners from exercising the same rights.
7. Which of the following statements are correct?
a) An EUA created in terms of S27 and shown on the sectional plan gives “real rights”.
b) An EUA created in terms of S27 and shown on the sectional plan gives “personal rights”.
c) An EUA created in terms of rules gives “personal rights”.
d) An EUA created in terms of S27A gives “real rights”.
8. Which of the following can you bond / mortgage?
a) A unit.
b) Rights to a s27 exclusive use area.
c) Exclusive use rights in terms of the scheme’s rules.
9. If you are entitled to exclusive use rights, you are obliged to pay all expenses attributable to the area concerned.
Scroll down the page for the answers…
1: A and C
7: A and C
8: A and B
Article reference: Volume 4, Issue 09, Page 2.
This article is published under the Creative Commons Attribution license.