Sectional Title - Boundaries between two Exclusive Use Areas and financial responsibility
By Jennifer Paddock
When it comes to determining who is financially responsible for repairs and maintenance in sectional title schemes, boundaries are everything. This is because boundaries determine the nature of the property, and the nature of the property determines who must pay to repair it.
In sectional title schemes the nature of the property can be divided into three categories. The property could be:
- part of a section; or
- an area of unregulated common property; or
- a part of the common property that is subject to exclusive use rights.
As I explained in my article ‘Who pays for that pipe?’, the general rules relating to financial responsibility in sectional title are that:
- owners pay expenses associated with their individual sections [section 13(1)(c) Sectional Title Schemes Management Act 8 of 2011 (the ‘STSM Act’)];
- the body corporate pays for unregulated common property expenses [section 3(1)(l) STSM Act]; and
- The body corporate bears the operational responsibility of arranging maintenance and repairs of exclusive use areas but the holder/s of the exclusive use rights must pay the associated costs [section 3(1)(l) read with the proviso to section 3(1)(c) STSM Act].
So now you have the theory of who pays for what, but in practice it’s not always easy to determine where one part of the property ends and another part begins. This is where boundaries play a key role.
Boundaries between sections, and between sections and common property, tend to be easier to determine because they are indicated on the scheme’s sectional plan and because the Sectional Titles Act 95 of 1986 (the ‘ST Act’) directs us in terms of median lines and what those lines run through.
But boundaries of exclusive use areas, particularly rule-based exclusive use areas, can be tricky to define.
The boundaries of an exclusive use area created in terms of section 27 of the ST Act are properly surveyed and shown on the scheme’s sectional plan. Regulation 5(1)(m) made under the ST Act provides further guidance by stating that the common boundary between an exclusive use area and a section or common property is, in the case of physical features “the median line of the dividing floor, wall, ceiling, fence or other similar feature”, unless the boundaries of the exclusive use area have been described in a different manner on the sectional plan.
The boundaries of an exclusive use area created in terms of the scheme’s rules (under sections 10(7) and (8) of the STSM Act) must be shown on a layout plan drawn to scale, which is attached to the rule. The layout plan must show the position of the exclusive use area and it must state the purpose for which the exclusive use area may be used.
Let’s look at an example that came up in Paddocks Club recently to illustrate the complexities that pop up with boundaries in practice:
A sectional title scheme has exclusive use garden areas adjacent to the sections. The gardens are next to each other, separated by fences. These fences need repairs. Who pays?
In order to properly answer this question we need to ascertain where the boundaries of the exclusive use garden areas are.
If these are registered exclusive use gardens we would consult the scheme’s sectional plan and unless indicated otherwise we would assume that the exclusive use areas extend to the median line of the dividing fence [Reg 5(1)(m) ST Act].
But what if these are rule-based exclusive use areas and the layout plan attached to the exclusive use rule isn’t particularly clear as to whether the exclusive use areas extend to the midpoint of the dividing fence or whether the exclusive use areas extend only up to the fences, meaning that the fences remain unregulated common property?
If you find yourself in this situation, my view is that, unless it makes sense not to, the default position relative to boundaries of registered exclusive use areas under Regulation 5(1)(m) to the ST Act should be applied. The logic being that it does not make sense for the body corporate (i.e. all owners) to be financially responsible for something in the middle of two exclusive use areas which effectively only benefits the holders of the exclusive use rights on either side. So, unless the layout plan attached to the rule makes it clear that there is a strip of unregulated common property between two exclusive use areas created in terms of rules, I suggest one should assume that there is a single boundary line between them.
Courtesy: Paddocks
To become an expert in body corporate finances join our Advanced Sectional Title Financial Management Masterclass starting 17 April 2023.
Article reference: Paddocks Press: Volume 18, Issue 2.
Jennifer Paddock is a dual-qualified lawyer with experience working as a strata title managing agent and solicitor in New South Wales. Prior to this, she served as a specialist sectional title attorney and practice manager at Paddocks for five and a half years. She brings a wealth of knowledge and expertise to the Paddocks team. Contact her at [email protected].
This article is published under the Creative Commons Attribution license.
