In order to understand the legal nature of an exclusive use area it is important to know how it was historically developed, what exactly constitutes an exclusive use area and how it is established. In this article we will focus briefly on the historical development of exclusive use areas in South Africa, what an exclusive use area is, the two types of exclusive use areas that can be established and the legal nature of these two types of exclusive use areas.
A person obtaining sectional title ownership (“an owner”) obtains ownership of a unit in the sectional title scheme. A unit consists of a section together with an undivided share in the common property. The size of the share in the common property is calculated by a formula known as the participation quota. A unit will for all purposes be deemed to be land, and as a result of this it is possible for a unit to be mortgaged. A section and the undivided share in the common property shall always be deemed to fall together and accordingly cannot be alienated separately.
Therefore the common property of the scheme is owned by all the owners jointly in undivided shares and they must share it with each other. The use and enjoyment of the common property by the owners can be restricted by the allocation of exclusive use areas on parts of the common property. It is therefore important for owners to know how exclusive use areas are dealt with. To do this, it is necessary to understand a bit more about the historical development of exclusive use areas.
Historical development of the exclusive use area
The Sectional Titles Act 66 of 1971 did not make provision for the creation of exclusive use areas. Owners were not allowed to appropriate any part of the common property for their exclusive use. Subsequently, however, it became clear that owners had a need to reserve certain parts of the common property for their own exclusive use.
The Sectional Titles Act 95 of 1986 now expressly provides for the procedure of creating exclusive use areas. Section 27 of this Act created a number of problems regarding the regulation of exclusive use areas and accordingly section 27A was introduced.
What is an exclusive use area?
Exclusive use areas in a sectional title scheme are defined in the Sectional Titles Act as ‘a part or parts of the common property for the exclusive use by the owner or owners of one or more sections.’ Examples of what can be the subject of the exclusive use right includes gardens, parking bays, courtyards, storerooms, patios and so forth.
The common property comprises of “the land included in the sectional title scheme together with such parts of the building or buildings that are not included in a section and land referred to in section 26.” Certain parts of the common property can be reserved, either by the developer or the body corporate, for exclusive use by a specific owner. Accordingly, such exclusive use areas forms part of the common property and do not form part of a section.
The owner holding the right to exclusive use may use that area exclusively of all the other owners, but it still remains part of the common property. There is a clear difference between an owner’s undivided share in the common property and his right to the exclusive use of a part of the common property. An owner automatically has an undivided share in the common property if he is the owner of a section, but an owner does not necessarily have the same right to an exclusive use area.
Creation of exclusive use areas in terms of section 27 and 27A
The Sectional Titles Act makes provision for the creation of exclusive use areas in one of two ways. Firstly, exclusive use areas can be created in terms of section 27 (registered/genuine exclusive use areas). Secondly, exclusive use areas can be created in terms of section 27A (rule-based/non-genuine exclusive use areas).
Registered (genuine) exclusive use areas
Registered exclusive use areas in terms of section 27 can be created either by the developer at the opening of the sectional title register or by the body corporate at a later stage:
If the delineation of a part or parts of the common property is indicated on the sectional plan, the developer must, when making application for the opening of a sectional title register and the registration of the sectional plan, reserve such a part or parts of the common property for use as exclusive use areas by a specific section by way of a certificate of real right of exclusive use, and when the specific section is sold this right will be ceded to the owner of the section by registration of a unilateral notarial deed.
If no such reservation was made by the developer, then the Sectional Titles Act grants the developer a second chance to reserve exclusive use areas. The developer may, after the opening of the sectional title register, but before the establishment of the body corporate apply for a certificate of real right of exclusive use at the Registrar of Deeds. This right to exclusive use is then notarially ceded to an owner.
The body corporate may, when it is duly authorized thereto by a unanimous resolution of its members, request an architect or land surveyor to apply to the Surveyor-General for the delineation of the exclusive use areas on a sectional plan for the exclusive use by the owner or owners of one or more sections. In this instance the right to exclusive use will then be notarially ceded from the body corporate to an owner.
Rule-based (non-genuine) exclusive use areas
Since 1997 exclusive use areas can be created in terms of section 27A. This section provides for a cheaper and less cumbersome method of creating exclusive use areas in the rules of the sectional title scheme. The developer may, at the opening of the sectional title register, add a special rule that will provide for exclusive use areas. On the other hand the body corporate may also amend the management or conduct rules, by unanimous or special resolution (depending on the rule that is amended) to create exclusive use areas.
The requirements for this method of creation are that the rules must:
- Not create rights contemplated in section 27(6), (see below for discussion of rights).
- Include a layout plan to scale, indicating the location of the distinctively numbered exclusive use and enjoyment parts and the purpose for which these parts are to be used.
- Include a schedule indicating to which member each such part is allocated.
If the exclusive use area is created by the body corporate then a further requirement is that the Registrar of Deeds should be notified of the amendment. Only after this notification will the rule be of force.
Nature of the right of exclusive use in terms of section 27
An exclusive use right created in terms of section 27 is deemed to be a right to immovable property over which a mortgage bond, lease contract or personal servitude of usufruct, usus or habitatio may be registered.
Nature of the right of exclusive use in terms of section 27A
The rights of exclusive use created in terms of section 27A are not real rights in immovable property and are not registrable in the Deeds Office. These rights are personal rights created in terms of the rules of the scheme.
It is very important for a person who wants to buy a unit in a sectional title scheme to know if he or she is entitled to an exclusive use area and also to know which type of exclusive use area he or she is buying. A section 27 exclusive use area provides the holder of that right with a real right which is registered in the Deeds Office and which is enforceable against the world at large. A section 27A exclusive use area gives the holder of the right only a personal right which cannot be registered in the Deeds Office and is only enforceable against the body corporate and other sectional title owners of that specific scheme. Also, a section 27 exclusive use area can be mortgaged, whereas this is not possible in the instance of a section 27A exclusive use area. So make sure you ask the right questions regarding exclusive use areas in your proposed sectional title scheme.