What do you own in a sect. title unit?

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12 Apr 2013

It may happen that when buying a sectional title unit, there are “grey” areas as to what the exclusive use areas in the complex are and what areas have been ceded to the owners of unit.

Buyers of sectional title units should pay careful attention to what they are entitled to in the complex before signing anything.

For example, an owner believes he owns a small garden, patio or parking bay, but when checked, it is actually an exclusive use area.

According Bruce Zeff, a Knight Frank Anne Porter agent in the Sea Point and Green Point areas, the exclusive use areas are part of the body corporate’s common property which are used exclusively by owners of sections. These owners are usually responsible for the upkeep of the exclusive use areas and they pay a higher levy than they would have paid to the body corporate.

Sea Point and Green Point have older apartment blocks where, over the years, the exclusive use of an area is defined by means of a letter of right to use it, passed on from one owner to the next. Often, these owners are older people who have possibly forgotten that they do not own that area and inadvertently add it to the sale agreement as part of the unit that they are selling, Zeff says.

This happened recently, with the case ending in court in Sea Point, where McKersie bought his unit in 2005 with an exclusive use area (a parking bay) from Humphrey. Humphrey had bought this in 1998 from the developer (which had since been deregistered). When McKersie took transfer of the unit, it was found that the exclusive use area had not been transferred and on further investigation it was ascertained that Humphrey was not the owner of this area. The parking bay was never transferred to him by the developer but Humphrey had believed he was the owner at the time of selling it to McKersie.

McKersie applied to the court for an order declaring ownership of the parking bay and asking for the parking bay to be registered in his name but the Sectional Titles Act says that when a developer gives transfer of the last section held by him, he ceases to have a share and to be a member of the body corporate. In this case, the last sections owned by the developer were transferred in 2003 and at that time the parking bays were still registered in the developer’s name. Therefore, the parking bays automatically went to the body corporate when the company was deregistered.

In this case, Zeff says the body corporate owned the parking bay and the only way McKersie could have it transferred to his name is if the body corporate decided to do so or to sell it to him. 

He says it was likely that they would not do that, because parking bays are generally very scarce in Sea Point and Green Point and could possibly be an income for a long time to come for the body corporate. This is something that buyers and sellers should be aware of, says Zeff. 

“It is wise to check (and double check) for documents to prove that the exclusive use area does in fact belong to the unit being sold before signing an offer to purchase," Zeff says.

This is especially important if it is an older block where the chances are high that if you don't have a parking bay allocated to your apartment, you would have to park on the street. He says many of the older blocks were built in a time where families didn’t often own more than one car, if they owned one at all.

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