Sectional title corner – Can parking bays be sold?
We need money for some maintenance at our complex and we don’t want to raise a special levy as people cannot afford it. We were thinking of creating some more parking bays and selling them to interested owners to raise the funds. We have some garages in the property and some parking bays, but there are units who have no parking and have to park in the street. How do we go about doing this? – Anton
Hi Anton, great idea, but not that easy to achieve. First of all you will need permission from the owners to create the bays – it will be an improvement to the common property – and you need to decide first if it is a luxurious improvement (when it is not necessary, but rather a luxury) or if it is a non-luxurious improvement (where it is a necessity). The difference between the two is not determined by the costs involved but rather by the necessity thereof. I would think that you will be able to argue that this is a necessity – seeing that some owners do not have any parking inside the complex.
For the non-luxurious improvement you will need to send a circular to all owners stating what you plan, what it will cost and how it will be paid. (If it is a luxurious improvement it would need to be a unanimous resolution.)
Should nobody request a meeting to discuss the matter within 30 days of the notice you can go ahead and do the improvement. Should a meeting be requested you will need a special resolution passed at the meeting.
Once the procedure has been followed the bays can be created.
It is not possible to sell common property parking bays in the conventional way as they are situated in the middle of the property and cannot be cut of or “alienated” as prescribed in the Sectional Titles Act. You will, therefore, have to create exclusive-use rights over the bays. Exclusive use can be created in two ways: In the plans or in the rules. Only exclusive-use rights in terms of the plans are registered real rights and can be sold, mortgaged etc. If you want to sell the parking bays you will therefore have to create exclusive-use rights over them in terms of the plans.
For this you will need a unanimous resolution to be passed by the body corporate. The sectional plans will need to be amended, and the exclusive-use rights created and registered at the deeds office. You will then be able to sell the bays and transfer the exclusive-use rights to the buyers.
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Who is Karien Coetzee?
Karien Coetzee is the national property management consultant at property management company, Trafalgar. She holds qualifications in sectional title schemes management and homeowners association management.