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[TBud]

I’ve just purchased my first strata unit in NSW in an older strata scheme and don’t yet know how the strata laws work. A few units do not have a garage or carspace and some owners have requested that the owners corporation create 2-3 carspaces on an area of garden at the back of the property that cannot be seen from the road. It would mean building concrete slabs over part of the lawn for cars to park on and the driveway would need to be extended by concreting it up to the new carspaces.

The main point of contention is that some owners say the advice they were given is that nobody can be granted exclusive use of common property land without paying the owners corporation a price or compensation for it. 

However the owners who want a carspace built for them and want to be given exclusive use of those carspaces say they have been advised that no kind of price or compensation is payable for being given exclusive use of any part of common property regardless of whether it’s inside a building or outside on the land. They don’t want to pay anything, not even the legal fees. They say that the only requirement is that a by-law granting exclusive use be passed by the owners corporation and registered.

Can you help to solve this difference of opinion please? 

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[Jimmy-T]

Sounds like there’s some nifty footwork going on there by people who want  something that they aren’t entitled to for free.

 

Common property belongs to all the owners in the building.  Allowing one person to use it takes it away from everyone else.

 

Sections 112 and 113 of the Act (below) allow the Owners Corp to allocate exclusive use of common property to owners and charge them for it.  These sections of the law wouldn’t be there if they just had to hand over common property to whoever wanted it.

 

Subject to DA approval of your local council (and that’s not guaranteed) you could go through the rigmarole of creating parking spaces and selling them to owners but that is way too complicated, mainly because it involves recalculating unit entitlements.

 

If there is a genuine demand and need for the parking spots, and the council will allow it, the OC should build them and then lease them to owners in a fair and equitable way for extended periods, attached to the ownership of the lot, for fees that take into account the costs of planning and building them.

 

You can work this out in advance and say, OK, you can get a car space but it will cost X amount a year for 10 years and you or whoever owns your lot will have first refusal to renew. If they don’t want to pay, they don’t get a car space. That’s how it works.

 

112   Owners corporation may grant licence to use common property

 

(1)  An owners corporation may grant a licence to an owner or occupier of a lot in the strata scheme or another person to use common property in a particular manner or for particular purposes if the owners corporation has approved the granting of the licence by a special resolution.

(2)  A licence may be granted subject to terms and conditions.

Note.  Division 3 of Part 7 enables owners corporations to make common property rights by-laws granting exclusive use rights and special privileges (including licences) in relation to common property.

(3)  Without limiting this section, a licence may be granted under an agreement with the local council for a strata parking area under section 650A of the Local Government Act 1993.

113   Agreement for payment to owner of consideration on transfer or lease of common property

An owners corporation may, in accordance with a special resolution, make an agreement with an owner for the payment to the owner of:

(a)  the whole or any part of the consideration under any transaction proposed to be entered into by the owners corporation under Division 6 of Part 2 of the Strata Schemes Development Act 2015, or

(b)  any money payable to the owners corporation under a common property rights by-law.

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