One owner in a unit-titled development wanted to use the space outside their unit as an exclusive carpark.  Her particular unit did not come with a carpark.

Most of the other owners, who all had carparks (accessory units) with their units, didn’t mind the idea, but the chairperson of the Body Corporate suggested the Body Corporate take legal advice about this.

It is a good thing they obtained advice, as the area the owner wanted to use as her exclusive carpark was common property.  The Unit Titles Act has very strict criteria when it comes to use of common property. Not following the Act would have meant that any disgruntled owners could have taken legal action against the Body Corporate in the Tenancy Tribunal.

Generally, in order for someone to have exclusive use of an area in a unit titled complex, that area needs to be within their unit, or an accessory unit to their unit.  To legally add a carpark (or a structure like a garage) to a particular owner’s title involves re-surveying the whole unit plan, and re-allocating the ownership/utility units.  This is time-consuming and costly. 

However, the Unit Titles Act provides an option for granting and recording rights for one owner to use a carpark located on common property, without the need for resurveying the Unit Title plan.  The Body Corporate can put in place a ‘licence’ in favour of a unit owner to use that particular area exclusively.  This can be with or without an additional covenant registered over the base land for the Unit Title (on the Supplementary Record Sheet).

The Body Corporate may choose to complete both a licence and a covenant in order to record a particular unit owner’s rights in relation to common property. 

The benefit of registering a covenant to record the licence is that it will appear on the Supplementary Record Sheet (title), so it is flagged to any person searching the title (particularly useful when someone is buying into the complex).

A licence, on the other hand is a private arrangement between the owner and the Body Corporate, which will not pass to future owners.  The licence itself cannot be registered, which is why a covenant needs to be entered into as well.

If you are a Body Corporate considering putting in place an exclusive right for an owner to use part of the common property, or considering granting any rights at all over the common property, it pays to take legal advice to make sure you don’t make costly mistakes.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their option are.  At Rainey Collins we have an experienced property and business team who can answer your questions and put you on the right track.

Claire Tyler