|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
In a sectioned-building, all assets fall
into two broad ownership categories:
study for a sectioned building must produce a
report that contains three parts:
Assets: This includes any assets that are for
the exclusive use of the section only. For example: the hallway carpets
in the residential section.
assets are shared between the different sections, such as fire alarm,
sump pumps, booster pumps and emergency generator. The study will need
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
- Residential-Only Assets
- Commercial Only Assets
- Shared Assets
section will be comprised of common
areas which, in turn, will fall into two general
Whichever section is larger in size will be deemed
the primary occupancy.
. Low-rise building
sectioned into commercial and residential
Fig. Property sectioned into
high-rise and townhouses.
Fig. 3: Cross-section view
through a sectioned building.