Exclusive use areas (EUAs) often give rise to disputes in Sectional Title complexes and owners and prospective buyers need to make sure they understand them properly before they try to use them incorrectly or commit to the purchase of a Sectional Title unit.
That’s the advice of Andrew Schaefer, MD of the leading national property management company Trafalgar, who says that while there are certain rights associated with EUAs, there are also certain cost implications that owners need to be aware of.
“The first thing to understand about EUAs, though, is that they are essentially not ‘sections’ but actually portions of the common property that only one owner is entitled to use – even when they are garages, storerooms and balconies that are attached to specific sections.“
Secondly, he says, the right of exclusive use can either be entrenched by the developer when the Sectional Title complex is being built, or agreed upon by the body corporate (made up of all the section owners) at a later stage.
“And third, the right of exclusive use can be defined either as a ‘real’ right that is noted on the original Sectional Title plan registered at the Deeds Office, or as a ‘personal’ right that is granted when the body corporate creates a new rule for its specific Sectional Title scheme.”
Generally, Schaefer says, EUAs are intended to be used for a specific purpose (such as a parking bay or as a garden) and those who hold the rights to use them must stick to this. “If they do wish to make improvements, like installing a swimming pool in a garden that is an EUA, or putting up a roof over a balcony or veranda, they will need the written permission of the trustees.
“However, owners who decide that they would like to incorporate an EUA into their section have to go through a very different process. For example, an owner who wanted to turn the parking bay alongside his unit into an enclosed garage and make it part of his section would first need to get the permission of the body corporate by special resolution, and then have to get a surveyor or architect to submit a new version of the Sectional Title plan to the Surveyor General for approval.
“In addition, if the proposed change was approved, it would change the size of the owner’s section and thus his participation quota (PQ) in the scheme, which would mean an increase in his monthly levy.”
Meanwhile, he says, Sectional Title trustees also need to understand that while the body corporate is still responsible for the maintenance of EUAs – it is obliged to charge the owners for this service as well as any repairs. “Balconies that are EUAs, for example, need to be painted at the same time as the rest of the scheme, and lawns in gardens that are EUAs need to be mowed at the same time as the rest of the lawns in the scheme – at an agreed cost to the owners who hold the exclusive use rights to these areas.”
And finally, says Schaefer, those buying into Sectional Title schemes need to be sure exactly what is included in the section they are being offered, as this could make a major difference to the purchase price, and also to their future levy payments.
“You may be told that the section ‘includes’ a garage or a storeroom, for example, when in fact this area is only an EUA that is still part of the common property. What is more, you need to double check how the right of exclusive use will be transferred to you.
“If it is a personal right, it will pass on automatically and won’t change until the body corporate perhaps makes new rules for the scheme. If it is a real right registered at the Deeds Office, it can be bonded and will need to be specified in the Offer to Purchase and formally ceded to you as part of the process of transfer handled by the conveyancer.”
Issued by the Trafalgar Property Group