Following on from our article on Buying in a Sectional Title Scheme, we delve a bit more deeply into Sectional Title Schemes, more specifically Exclusive Use Areas (EUA).
To recap, a Sectional Title Scheme is a complex or development where a person purchases a section together with an undivided share in the common property. Sectional Title can be great for those who are after the “lock up and go” lifestyle or for those who don’t necessarily want the responsibility of maintenance or extra costs on a larger property.
In most cases when you’ve purchased a property in a Sectional Title Scheme there will be an area that will be listed as an Exclusive Use Area and is listed as such in the Title Deed.
An EUA, as the name states, is an area that is part/s of the common property but for the exclusive use of an owner of a particular section. They can be anything from parking bays or garages to gardens or a storeroom. The Exclusive use area is then registered in the name of the Owner and he/she will be given a Notarial Deed which will prove ownership, in addition to receiving a Title Deed pertaining to the primary unit. As the Owner will then own this Exclusive Use Area he is able to bond and rent this area to a tenant. The owner will be liable to pay levies and rates on the Exclusive Use Area. Furthermore if there is insurance payable in respect of this EUA this will be payable by the owner.
If there is an area, for instance a parking bay, that the Purchaser is given use and enjoyment of however it is not registered in the Purchasers name and he/she has no Notarial deed confirming ownership then the Purchaser has merely been given the use of this area in terms of the rules of the body corporate. This is often done when Sectional Title Schemes have very limited parking bays and therefore use is often granted on a rotational basis and often is given to the longest standing owners first. In this instance the Body Corporate will also charge the owner levies and rates on this property. The Owner will not be entitled to bond or sell this area as it is not registered in his/her name as the area remains registered in the name of the body corporate.
One needs to be mindful of the right he/she is being given, when purchasing a sectional title unit, as to whether he/she will be given a real right (Notarial registered right) or only the use and enjoyment of the area by virtue of the Body Corporate rules, which right is not a registered real right.
Understanding the basics of Sectional Title and Exclusive Use Areas may help you make a more informed decision when looking at purchasing in a complex or development.
If you need advice or assistance on purchasing property contact our offices on firstname.lastname@example.org or give us a call.