Advice and Opinion

Letting Of Common Property In Sectional Title Schemes

It often happens that creating additional parking in sectional title schemes becomes necessary and the only way to do that is to convert common property into parking bays for the owners. There have even been situations, says Michael Bauer, general manager of the managing agents IHFM, where the need for more parking is so high, it overrides the need for a swimming pool or garden and these are filled in or bricked over.

“We at IHFM have had queries from trustees as to the best route to follow, whether to leave it as common property and let it out or whether to convert it to exclusive use area,” he said.

It does depend largely on what the owners want or need, he said.

When the decision is made to convert common property into parking bays, all the due processes need to be followed and the parking needs to be fairly allocated, he says. It is advisable that the body corporate keeps this arrangement flexible if possible, by renting the bays out to owners instead of allocating the bays as exclusive use areas, he says.

The Sectional Titles Act allows for the letting of common property to the unit holders, as long as the lease is less than ten years. What many do, however, is rent the bays out year by year rather than tying it up for ten years at a time. Parking is always at a premium and the body corporate would need to be strict in the managing of these bays.

With letting bays out, the body corporate will have a steady income stream, and it can be managed well enough by creating a rental pool for the bays, so as bays become available they can be taken up by those who need them, he said.

“Having a system like this does tend to alleviate the friction in a sectional title scheme where there is a shortage of parking,” said Bauer. “The only problem is that if an owner decides to sell his unit, the lease cannot be ceded to the new owner, unless there is a specific clause stipulating the ability to do so. The owner should also have the right to sublet his parking bay if he wants to do so.”

Section 17 of the ST Act deals with the letting and selling of common property, so trustees could refer to this clause in cases such as these, said Bauer.

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