NSW: Developer request for scaffolding on common property: What approval is required?

This article discusses developer scaffolding access strata approval requirements and when a special resolution is needed.

Question: Our owners corporation has received a request from the development next door to place scaffolding on common property and across two private car parks. They have offered to pay compensation. How do we deal with something like this?

Our owners corporation has received a request from the development next door to place scaffolding on common property and across two private car parks. I am the owner of one of those car parks. The owners corporation has contacted owners to ask how much ‘compensation’ we would accept for being unable to use our carpark for 15 weeks. The committee are also discussing the compensation they will accept in exchange for the scaffolding on common property.

The owners corporation has stated that, as there will not be a “change” to the common property, no special resolution is required. When I queried them about entering a lease without a special resolution, I was told the committee had “not presented to enter into a formal lease or deed of access” and therefore the matter is being handled by the strata committee.

Can the strata committee really rent out common property with no contract for an undisclosed sum without the owner’s knowledge or agreement?

Answer: Usually, the best option is to negotiate an access deed with the developer.

This question about access requested by the developer next door for scaffolding access raises 3 issues – access to private car spaces, compensation and special resolutions.

1. The private car spaces and their airspace are not common property but lot property, so the owners corporation does not have the power to grant anyone access to them. In order to access land for scaffolding or anything else, the developer needs to come to an arrangement with the owner of the land where access is sought. In this case, as part of it is common property and part is lot property, the developer needs to come to an arrangement with those 2 owners and the owners corporation.
2. If no arrangements can be reached, the developer can apply to the local court for access orders (under the Access to Neighbouring Lands Act 2000). When doing so, the developer would usually have to pay the legal costs of the other party (in this case the 2 owners and the owners corporation), as well as their own legal costs, but will not have to pay any compensation unless there is actual financial loss. Compensation is not payable for inconvenience. If those 2 units are owner occupied, the court would be unlikely to order compensation. However, if one is rented and the rent had to be reduced due to the car space being out of action for a period, there is actual financial loss for which compensation would be payable.
3. Under section 112 (1) of the Strata Schemes Management Act 2015, a special resolution at a general meeting is needed to grant access to the common property, including by licence. The strata committee does not have the power to deal with this.

We have assisted with many of these types of matters, and usually, the best option is to negotiate an access deed with the developer. The developer would usually pay the owners’/owners corporation’s legal costs (it is cheaper than going to court) and you might be able to convince them to pay some compensation, as a settlement deed is quicker, cheaper and more certain than legal proceedings.

When we run these matters, the first thing we usually do is ask the developer for some money into our trust account, so owners/owners corporations are not out of pocket if it doesn’t proceed.

This post appears in the February 2023 edition of The NSW Strata Magazine.

James Moir
Madison Marcus
E: Strata@madisonmarcus.com.au
P: 02 8022 1222