1

Sections
The division of a building into governance categories based on occupancy types. The entire building is owned by one-legal entity which contains multiple "sections" which each have their own operating budget and reserve fund.

For example:
In a sectioned-building, all assets fall into two broad ownership categories:
  • Exclusive-Use Assets:  This includes any assets that are for the exclusive use of the section only. For example: the hallway carpets in the residential section.
  • Shared Assets:  Some assets are shared between the different sections, such as fire alarm, sump pumps, booster pumps and emergency generator. The study will need to apportion cost sharing percentages to the shared assets. For example, a sump pump replacement cost can be set up so that 53% is allocated to residential and 47% to the non-residential section. These cost sharing percentages will be based on the existing reciprocal easement agreements that were set up by the developer and should appear as a table in the original disclosure documents.  
A reserve study for a sectioned building must produce a report that contains three parts:
  • Residential-Only Assets
  • Commercial Only Assets
  • Shared Assets

Each section will be comprised of common areas which, in turn, will fall into two general categories 

Whichever section is larger in size will be deemed the primary occupancy.
Sections_Asset_Insights
Fig 1 . Low-rise building sectioned into commercial and residential


1
Fig. Property sectioned into high-rise and townhouses.


1
Fig. 3: Cross-section view through a sectioned building
.

See also: