By Nicole Wilde

30 September 2015

Owners Corporations in Victoria have the statutory power under section 14 of the Owners Corporations Act 2006 to lease or licence the whole, or part of the common property to a lot owner or any other person.

In order to validly grant property leases or licences over common property, the Owners Corporation must pass a special resolution. In our view, the proposed Lease/Licence should be prepared in advance of the vote to pass the special resolution to ensure all parties are aware of what terms and conditions will apply if the special resolution is successful.

The Lease/Licence Area

The Lease/Licence Area should always be defined by reference to the Plan of Subdivision for the Property (the Plan). This is because the Plan defines the legal boundaries of common property. Other plans or drawings that are not the Plan itself, should not be used to define a Lease/Licence Area.

Issues to Consider

  • Who will be responsible for maintenance, repair and rectification of damage?
  • Owners Corporate Chattels and PPS Registration.
  • What will happen if the licensee wants to make improvements?
  • Who will maintain insurance?
  • What are the height limits of the licence/lease area?
  • What access rights to services will the Owners Corporation retain?
  • Whether existing easements have to be considered.
  • What ability the licensee will have to assign the Lease / Licence & what assignment requirements will apply?
  • What will the parties’ termination rights be?
  • What will the parties’ respective liability be?
  • Will there be a prohibition on sub-letting?
  • Cleaning.
  • Hazards.
  • Noise.
  • Disruption to others.
  • Permitted use and hours.
  • Offices.
  • Storage areas.
  • Balconies.
  • Courtyards.
  • Car parks. (washing cars, storage, oil and petrol)
  • Roof.
  • Airspace.
  • What time period will the Lease/Licence be for: e.g. 1 year, 5 years, 99 years or will there be options to renew?
  • Will the licensee be required to give an indemnity?
  • What inspection rights will the Owners Corporation retain?
  • Compliance with Building Act. i.e. essential services.

 

Tisher Liner FC Law has a strong property law practice and specialist Owners Corporation legal division. We are available to prepare customised common property Leases and Licences for your Owners Corporation clients. Please do not hesitate to contact Nicole Wilde or one of the Owners Corporation team.

Related Articles

View All
Owners Corporation / Owners Corporations & Strata

Important Alert: The new Owners Corporations Regulations 2018 (Vic) come into effect on 2 December 2018.

The new regulations include some exciting new changes including a new, practical Model Rule regulating the external...
Read More
Business Law / Construction / Employment Law

September 2018 Newsletter

September 2018 Newsletter See the full newsletter here Welcome TLFC Law are pleased to welcome Min Seetoh to the...
Read More
Owners Corporation / Owners Corporations & Strata

Short-stay accommodation law reform in Victoria: Are you aware of the changes?

The purpose of the Act is to regulate the provision of short-stay accommodation arrangements (up to a maximum of seven...
Read More
Owners Corporation / Property & Development / Owners Corporations & Strata

Considering renovating your apartment? Have you checked you legally own it?

Our population is growing and the construction of higher-density housing is booming Considering renovating If you opt...
Read More
Owners Corporation / Owners Corporations & Strata / Health & Aged Care

Owners Corporations & Retirement Villages in Victoria

People in Victoria over 55 years of age and who have retired from full time employment, may be eligible to purchase a...
Read More
Owners Corporation / Owners Corporations & Strata

Mobile Phone Towers on Melbourne Apartment Buildings

So, what does this mean for Owners Corporations Mobile phone towers are often installed on common property roofs of...
Read More
Australia-Israel Legal Advice / Charities & Not-for-Profit / Technology and Start Ups

TLFC – Award Finalist for Law Firm of the Year (Medium Category)

Tisher Liner FC are proud to be nominated as an award finalist in the 14th annual Victorian Legal Awards Medium Law...
Read More
Owners Corporation / Owners Corporations & Strata

AGM or Wine?

You become attuned to meeting your strata neighbours, strangers who live in close proximity to you – some of whom...
Read More
Owners Corporation / Owners Corporations & Strata

What is the True Cost of Not Asking the Right Questions at the Right Time?

The recent Victorian Civil & Administrative Tribunal case of Dunn v Owners Corporation 446158A (Owners...
Read More
Owners Corporation / Property & Development / Owners Corporations & Strata

Apartmentites – Guest Insight #1

Guest Insight Apartmentite – “a person who dwells in an apartment” (Urban Dictionary) Guest Apartmentite:...
Read More
Owners Corporation / Property & Development / Developments

Important VCAT Case Update: The Grundl Assessment

An important recent VCAT decision provides Victorian Owners Corporations, Committees, and Managers about how to choose...
Read More
Owners Corporation / Owners Corporations & Strata

How Quickly Would a Fire Spread in Your Apartment Building?

In 2014, a fire began on the balcony of the residential apartment high rise known as the Lacrosse building near Etihad...
Read More