The Trustees of one of our complexes wanted to know if they can sell parking bays to owners to make some extra money for the Body Corporate.
The STSM Act states the following:
Section 12. (1) (a) Whenever the whole or any part of, or any right in, the common property is expropriated in terms of any law, service of a notice of expropriation on the body corporate is considered to be service thereof on the registered owner of every section in the building or buildings concerned.
(b) Each and every such owner is considered to have appointed the trustees of the body corporate concerned as his or her duly authorised agents and representatives—
- to negotiate and settle the compensation payable to him or her, and to that end to employ attorneys, advocates and other experts; and
- on his or her behalf, to receive and give valid acquittance for any compensation moneys paid.
But selling a parking bay is not expropriation of the common property as the parking bay will remain part of the complex.
Section 17 of the Sectional Titles Act states the following:
17 Alienation and letting of common property
- The owners and holders of a right of extension contemplated in section 25 may if authorized in terms of section 5(1)(a) of the Sectional Title Schemes Management Act direct the body corporate on their behalf to alienate common property or any part thereof, or to let common property or any part thereof under a lease, and thereupon the body corporate shall, notwithstanding any provisions of section 20 of the Deeds Registries Act, but subject to compliance with any law relating to the subdivision of land or to the letting of a part of land, as the case may be, have power to deal with such common property or such part thereof in accordance with the direction, and to execute any deed required for the purpose: Provided that if the whole of the right referred to in section 25 or section 60 (1)
But again this does not apply as the parking bays will remain part of the complex.
So it is clear that it is not possible to sell a portion of the common property if it is going to remain part of the complex
Then what about making it an exclusive use area and then selling it?
The STSM Act states the following:
Section 5 (1) In addition to the body corporate’s main functions and powers under sections 3 and 4, the body corporate—
(e)may, upon unanimous resolution by the owners, request the delineation and cession of exclusive use rights to particular owners in terms of section 27(2) of the Sectional Titles Act;
Section 10 (7) A developer or a body corporate may make management or conduct rules which confer rights of exclusive use and enjoyment of parts of the common property upon members of the body corporate.
So then ito the different types of exclusive use areas the Sectional Titles Act states the following:
For exclusive use areas created ito the plans:
(3) A right to the exclusive use of a part or parts of the common property delineated on the sectional plan in terms of subsection (2) shall be transferred to the owner or owners on whom such right has been conferred by the body corporate, by the registration of a notarial deed entered into by the parties and in which the body corporate shall represent the owners of all the sections as transferor.
(Sub-s (3) amended by Section 19 of the Sectional Title Schemes Management Act, Act 8 of 2011)
(4) (a) An owner of a section in whose favour the right to the exclusive use of a part of the common property delineated on the sectional plan is registered, may transfer his or her interest in such right to the owner of another section in the scheme by the registration by the registrar of a notarial deed of cession entered into by the parties,
There is no such provision for exclusive use areas ito the Rules
EUA’s created in terms of the plans can be sold, bought, donated, left to someone in a will, mortgaged, let, because it is a registered real right. The purpose of use is specified on the sectional plans. EUA’s created in the rules cannot be sold, let or mortgaged as it is not a registered real right.
So if the Trustees want to make some money they have to create exclusive use rights over the parking bays ito the plans and then they can sell it to owners.