When purchasing or selling a sectional title property there are often Exclusive Use rights attached or claimed to be part of the sale.
Owners sometimes believe they have an Exclusive Right to use a piece of garden or a parking bay only to find that the “right” does not exist or is inadequately recorded. This can have a fundamental impact on the value of a section. It is therefore important to ensure that one understands exactly how Exclusive Use rights are secured.
Exclusive Use of a particular area in a sectional title scheme can be recorded or defined in a number of ways, they are listed below.
Please consult a legal adviser with sectional title experience if necessary.
1. Notarial Deed – Exclusive Use rights recorded / transferred by notarial deed can’t be unilaterally removed. They can be sold, generally together with the sale of a sectional title unit or in certain instances they can be sold separately to the owner of another section.
2. Rule 27A – Exclusive use rights recorded in terms of 27A can be less secure than those on a notarial deed. Depending on the wording of the rule, changes may require unanimous consent of all the unit holders before a right can be altered. However if the wording does not require it then the voting rules of the Body Corporate (BC) would apply. An exclusive use right could under these circumstances be removed by a simple majority vote of members in a properly constituted meeting.
3. Right allocated by the Body Corporate – These are rights to use a part of the common property allocated by the BC or the trustees. These can be changed at anytime (provided the due process as defined in the BC rules is followed) normally by a decision of the trustees. Rights allocated in this manner obviously have less value than those allocated by Notarial Deed or a well written Rule 27A.
When purchasing a sectional title unit make sure you understand how the Exclusive Use rights are recorded. Avoid the unhappiness and stress related to finding out that your rights are not as secure as you had thought and the value of your investment is eroded.
Your sale agreement should make specific mention of the Exclusive Use rights transferred by notarial deed. Other Exclusive Use rights need not be specifically mentioned as long as the agreement includes ANY other Exclusive Use rights attached to the section.
