Question: Our developer-owner plans to sell their apartment, but arrange a 99-year lease on one of their exclusive use storage areas. Does the body corporate have a say?
The developer is a lot owner in our building. They have retained one apartment, which has two exclusive use storage areas (11 sqm and 2 sqm) in the basement. If they sell the apartment, they want to lease back the larger storage area from the new owner on a 99-year lease.
Currently, the larger storage area contains items like excess building tiles and other utility items such as a mower. Some owners are claiming it is a common use area, while others are fine with the arrangement. I believe it is a private agreement between the seller and buyer. Who is correct?
Answer: Whether the developer-owner can lease back the exclusive use storage area depends on any restrictions in the by-law, but if none apply, the new owner can deal with the area as they choose.
The answer depends on whether there are any restrictions on leasing an exclusive use storage area in the by-law or council requirements which would prohibit the area from being subject to a lease. However, absent these restrictions, if the area is actually granted by way of exclusive use, the new owner is entitled to choose how to deal with their property.
This post appears in Strata News #798.
Todd Garsden
Mahoneys
E: tgarsden@mahoneys.com.au
P: 07 3007 3753
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