Managing property properly

EXCLUSIVE USE AREAS - A COMPARISON

The following summary is not intended to be either definitive or comprehensive. It is intended to be a comparison of the main types of Exclusive Use Areas (EUA's) in Sectional Title schemes throughout South Africa. For more information, please phone the Sectional Title Helpline on 011-393-2671 or e-mail bobgauld@iafrica.com.

Exclusive Use Areas are parts of the common property within sectional schemes the use of which has been allocated to individual owners. Under the 1971 Sectional Titles Act, most EUA's were granted by means of the Rules under that Act. In this summary, they are referred to as Old Rule (OR) exclusive use. If those rules were registered at the Deeds Office, EUA's created under those rules still apply. The 1986 Act introduced a means of registering EUA's by means of a fairly complicated and expensive process. EUA's created by this method are deemed to be REGISTERABLE real rights to immovable property, capable of being bought and sold and bonded. In this summary they are referred to as Registered (R) exclusive use. In 1997, the Sectional Titles Amendment Act reintroduced a facility to create EUA's by means of the current Rules, referred to here as Current Rule (CR) exclusive use.

All three types are found in sectional schemes, often with more than one type in a scheme. Unfortunately not only are the three types created differently, but their management, control and use differ considerably. It is for these reasons that this summary has been prepared.

NB - Exclusive Use is NOT created by walls, fences, height above the ground, access or any other apparently logical reasons! Exclusive Use is a term defined by the Sectional Titles Act. In sectional schemes, nothing else matters!

OLD RULE (OR)

  • Created in terms of the Rules of the 1971 Sectional Titles Act
  • Are not recognised as Real Rights
  • May not be bought or sold. Exchanges usually require an amendment to the Rules
  • Can not be bonded
  • Improvements require Body Corporate consent
  • Body Corporate repairs and maintains
  • Holders of rights must contribute to the levy fund to defray costs of rates, taxes, insurance and maintenance under s37(1)(b). Not subject to "Solidatus"
  • Section 60 of the 1986 Act allows holders of rights to convert to registered (s27) rights at owners' expense

REGISTERED (R)

  • Created and registered under section 27 of the 1986 Sectional Titles Act
  • Are recognised as Real Rights
  • Can be bought and sold among and between unit owners
  • Can be bonded
  • Improvements authorised by the trustees, and may not unreasonably be refused
  • Holder repairs and maintains (Solidatus)
  • Holder must contribute to the levy fund to defray costs of rates, taxes, insurance and maintenance under s37(1)(b) but is subject to "Solidatus"
  • Expensive to create and to register in the names of the owners. Land surveyor and attorney required

CURRENT RULE (CR)

  • Created under rules in terms of section 27(A) of the 1986 Sectional Titles Act
  • Are not recognised as Real Rights
  • May not be bought and sold. Exchanges require an amendment to the rules
  • Can not be bonded
  • Unless allowed in the Rule, improvements require Body Corporate consent
  • Body Corporate repairs and maintains
  • Unless specifically stated in the rule creating the use the holder is not obliged to contribute to the levy fund (NOT subject to "Solidatus")
  • Relatively inexpensive and easy to create. NO land surveyor needed and attorney expenses limited to drafting the rule.

"Solidatus" refers to the "The Body Corporate of Solidatus v De Waai and others" case heard in the Witwatersrand Local Division of the Supreme Court in 1997. The case dealt with repairs and maintenance of Exclusive Use Areas.

For further info contact us