A Victorian Lot Owner is wondering about the process for buying or leasing common property. Alex Smale, Owners Corporation Manager at The Knight explains each solution.
Question: In a Melbourne strata of three are all lot owners required to agree to sell the common front lawn area to the lot owner of the front unit? Is leasing an option?
I live in a Melbourne strata building with three lot owners. Are all three lot owners required to agree to sell the common front lawn area to the lot owner of the front unit or is this decided by a majority approval?
Answer: Selling any part of the common property to an owner requires a unanimous resolution.
Under section 32 of the Subdivision Act an unanimous resolution is required to alter a plan of subdivision. Selling any part of the common property to an owner, therefore, requires a unanimous resolution.
Another option you could consider is leasing the area to the owner. Under part 2, division 3 of the Owners Corporation Act, an Owners Corporation may lease or license any part of the common property to a lot owner or other person by Special Resolution rather than a unanimous one.
For a Special Resolution to pass as a final resolution, it requires agreement by owners or their proxies representing 75 per cent of lots or in the case of a ballot or poll, 75 per cent of lot entitlements.
Alternatively, a Special Resolution can pass as an interim Special Resolution if owners or proxies representing at least 50% of lots are in agreement and no more than 25% are against. For you to obtain a Special Resolution in your situation, therefore, you would, depending on lot entitlements, likely need two out of three owners to support the resolution and for the third owner to either abstain or vote in favour.
Have a question about buying or leasing common property or something to add to the article? Leave a comment below.
This post appears in Strata News #299.
This article is for reference purposes only and is not intended to be a comprehensive review of the developments in the law and practice or to cover all aspect of the subject matter. It does not constitute legal or other advice and should not be relied upon this way. Readers should take legal or other advice before applying the information containing in this publication.
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