23 Apr Can you sell your exclusive use area?
In this blog, we address the confusion around exclusive use areas (EUAs) in sectional title schemes. EUAs comprises parts of the common property where specific owners enjoy exclusive use and enjoyment of these areas. The different types of usages allocated to EUAs include parking bays, storerooms, balconies, roof terraces, gardens and garages.
Registering EUAs
Exclusive use areas are allocated to owners in a scheme in two ways:
1. Allocated in terms of the schemes’ rules
These types of EUAs are indicated in the management rules and attached to a specific section. The owner of that section has exclusive use of the specific area and when the section attached the EUA is sold, the EUA will be ceded from the seller to the new owner (purchaser).
The owner who has the right of use can never sell the use of their EUA to another person. In fact, under certain circumstances the area may even be removed or be cancelled by the body corporate.
All EUAs in a scheme must be indicated on a plan showing where they are located. This plan is attached to the rules of the schemes for identification purposes and is typically kept by the managing agent.
This plan must not be confused with the sectional title plans of the scheme where EAUs are not indicated if allocated in terms of the scheme’s rules.
2. Registered in terms of a title deed
An EUA registered in this manner is found on the owner’s title deed and is indicated on the sectional title plans together with the size of the area in square meters.
When the owner of a such a section sells their section, the EUA will be transferred to the new owner who will continue to enjoy exclusive use of the area.
EUAs registered in terms of a title deed can be sold in two ways: as part of the sale of a section, or separately to another registered owner in the scheme. It may not be sold to a person who does not own a section in the scheme.
Registered owners in a scheme who want to purchase EUAs registered in terms of a title deed can obtain bond financing for such a transaction.
Maintaining EUAs
Body corporate trustees must ensure that a suitable levy is charged for all EUAs in the scheme to cover any expenses the scheme may incur on these areas, including maintenance. Regardless of how it is registers, an EUA remains common property and must be maintained by the body corporate.
The owner who enjoys exclusive use is responsible for keeping the area neat and tidy. This includes mowing the lawn and pruning trees if the EUA is registered as a garden.
Where an owner has been allowed to erect a pergola or similar structure on their EUA, such an owner remains responsible for its maintenance.
PQ Values
When calculating the participation quota (PQ) value of a section, it is important to remember that EUAs do not form part of this calculation.
A separate levy must be calculated for each EUA and will be indicated separately on the owner’s levy statement.
When a body corporate raises a special levy, the calculation of the special levy will exclude any EUAs in the scheme. The calculation of the special levy only includes the sections in the scheme.
Conclusion
Understandably, EUAs can be confusing when it is part of the common property of the scheme but allocated to certain owners for their exclusive enjoyment. The principle remains that levies are paid to the body corporate who must maintain the EUA and that the user of the area is responsible for keeping it neat and tidy.
Depending on how it is registered, an EUA may be sold or ceded to a new owner of a section the EUA is allocated to.
Another blog you may enjoy: Understanding the different types of exclusive use areas.