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 one of the Owners Corporation team.

Related Articles

View All
Owners Corporations / Owners Corporations & Strata

Owners Corporations Act update – Form changes from Consumer Affairs Victoria

For Fee Notices and Final Notices, there is a new section about payment plans and financial hardship: “Payment Plans...
Read More
Owners Corporations / Owners Corporations & Strata

Loans to Owners Corporations – Tips and Tricks

The only option is a loan Section 25 of the Owners Corporations Act 2006 provides that by ordinary resolution, if the...
Read More
Owners Corporations / Owners Corporations & Strata

Owners Corporation case law update- Common property car park free for all! But not after VCAT intervenes

What is the case about The Tribunal sets out the facts as follows: The applicant, Mr Lim, is the owner of one of two...
Read More
Owners Corporations / Owners Corporations & Strata

Owners Corporation case law update- Developers and Managers beware!!

What was the case about The Owners Corporation (which only had 4 lots) sought recovery of $2,400 it says was illegally...
Read More
Owners Corporations / Owners Corporations & Strata

Owners Corporations Case law update- The Saint-John Decision- Lot owners have a right to emails and phone numbers!

Recently we wrote a blog about a lot owners right to access all of the lot owners emails and phone numbers That blog...
Read More
Owners Corporations / Owners Corporations & Strata

Pay up lot owners or lose your lot!

Some have a large amount of common property to look after which may include skyscraper buildings, roads and amenities...
Read More
Owners Corporations & Strata / Owners Corporations

Stop Suing Managers!! The Owners Corporation Manager

“The applicants seem to misunderstand the role of the manager The manager acts for and represents the Owners...
Read More
Owners Corporations / Owners Corporations & Strata

Owners Corporation case law update – Ford v Owners Corporation SP24717 (Owners Corporations) [2024] VCAT 547

The applicants sought the appointment of an administrator to an Owners Corporation which affects a residential...
Read More
Owners Corporations / Owners Corporations & Strata

Is this the death of short stay accommodation in apartment buildings in Victoria?

So, what is short stay accommodation Accommodation for a continuous period of less than 28 days The current definition...
Read More
Owners Corporations / Owners Corporations & Strata

Owners Corporation Case Law Update – Smith v Owners Corporation Plan No. RP002839 (Owners Corporations) [2024] VCAT 447

This case concerns a small 8 lot residential complex in East St Kilda There are two buildings, each with a stairwell...
Read More
Owners Corporations / Owners Corporations & Strata

Owners Corporation Case Law Update-Richardson Case – [2024] VCAT 582 -Amendments to plans of subdivision

The lot owners were not in agreement to amend the lot liability or lot entitlement Therefore, the only alternative, as...
Read More
Owners Corporations / Owners Corporations & Strata

Disclosure obligations for Strata Managers in Victoria: Access to owner’s contact information

There are two schools of thought Each owners corporation has four types of records: A lot owner has a right to access...
Read More