This Q&A about whether a body corporate can lease out their visitor parking spaces in QLD has been answered by Hayley Gath, Mathews Hunt Legal.
Question: Our body corporate would like to lease out around half of our visitor parking spaces. Are we able to do this and what legal hurdles do we need to overcome?
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We have approximately 100 units in a 5 year old building in Brisbane. Our visitor parking spaces are being used by just about anybody in the area for free parking!
We have 23 visitor parking spaces and are thinking of leasing 10 of them out to neighbouring businesses.
This would give us an extra $26,000 a year which we could use to benefit our building and our unit holders.
Are we able to do this and what legal hurdles do we need to overcome?
Answer: The Body Corporate will first need to contact its local council.
The Body Corporate will first need to contact its local council to obtain details of the required number of visitor car parks for the scheme, which usually forms part of the scheme’s planning/development approval. It will be important that the scheme retains a sufficient number of visitor car parks as per the council’s requirements for use by visitors to the scheme.
The Body Corporate would then need to enter into leases with the relevant businesses. This would require a special resolution for a term of 3 years or less for Standard Module and 10 years or less for Accommodation Module, or alternatively a resolution without dissent.
Additionally, the Body Corporate should update its by-laws (special resolution) as regards the use of the visitor parking and ensure that only the lease holder (and those it authorises) obtains access to the carpark.
A Body Corporate must not carry on a business (s.96 of the Act). However, there are cases in which adjudicators have determined that the Body Corporate is able to require a fee or rent be paid in consideration for a leased area of common property.
If you have a question about leasing out visitor parking spaces in QLD or something to add to the article, please leave a comment below.
This post appears in Strata News #290.
Read More:
- QLD: Q&A The First rule of Visitor Parking in Apartments – umm, it’s for visitors!
- QLD: Q&A I Don’t Live Here. I’m Only Visiting…Every Night
- NSW: Q&A Adequate ByLaw to Combat Abuse of Visitor Parking Spaces
Hayley Gath
E: hayley.gath@mathewshuntlegal.com.au
W: Mathews Hunt Legal
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I would have thought that visitor parking spaces are part of the common property and any exclusive use of the common property must be subject to owners approval by vote at general meeting by a motion without decent.
Hi Wayne
Thanks for your question about leasing out visitor parking spaces. This response from Peter Hunt, Mathews Hunt Legal:
Leases and licences are permitted with lower thresholds.
Good advice Hayley. Thankyou. An additional consideration for the owners is the potential tax consequence of such a move. The ATO’s Taxation Ruling 2015/3 explains that income derived from the leasing of common property is required to be declared in the tax returns of the individual lot owners in line with their unit entitlement percentages.
ie: it is not declared in a strata / body corporate / OC tax return. The ruling goes on to explain that this remains the case even when the money is not distributed to the individual owners.