WA: Do we need licence agreements or a new strata plan for exclusive use areas?

Question: If we consolidate our by-laws detailing exclusive use areas and common areas, do we also need to formalise licence agreements for exclusive use areas by arranging a new strata plan?

At our AGM, our strata management company advised residents that it would be a good idea to formalise a licence agreement for our complex’s exclusive use areas and common areas. The managers have also advised us to survey a new strata plan. Is this mandatory?

Soon, we will consolidate our by-laws, detailing exclusive use and common areas. Do we need to carry out these additional steps?

Answer: An exclusive use by-law for an area of common property (or Special Lot) is mostly defined by an accurate drawing with dimensions done by a Surveyor for that purpose.

From the information provided, I can only assume your strata scheme has no pre-existing by-laws for exclusive use.

Exclusive Use

Exclusive use can confer exclusive use and enjoyment of, or special privileges over, the common property in the strata titles scheme.

The requirements are stated in the Strata Titles Act 1985 (STA) in – section 43 Exclusive use by-laws.

43. Exclusive use by-laws

1. Exclusive use by-laws of a strata titles scheme are scheme by-laws that confer exclusive use and enjoyment of, or special privileges over, the common property in the strata titles scheme or specified common property in the strata titles scheme (the special common property) on the occupiers, for the time being, of a specified lot or lots in the strata titles scheme (the special lots).
2. Exclusive use by-laws may include the following —
   
   1. terms and conditions on which the occupiers of special lots may use the special common property;
   2. particulars relating to access to the special common property and the provision and keeping of any key necessary;
   3. particulars of the hours during which the special common property may be used;
   4. provisions relating to the condition, maintenance, repair, renewal or replacement of the special common property;
   5. provisions relating to insurance of the special common property to be maintained by the owners of special lots;
   6. matters relating to the determination of amounts payable to the strata company by the owners of special lots and the imposition and collection of the amounts.

3. Subject to the terms of exclusive use by-laws, the obligations that would, apart from this subsection, fall on the strata company under section 91(1)(c) in relation to the special common property fall instead on the owners of the special lots.
4. An amount payable by a person to a strata company under exclusive use by-laws must be paid (together with interest on any outstanding amount) and may be recovered by the strata company, as if the amount payable were an unpaid contribution levied on the person as a member of the strata company.
5. Exclusive use by-laws can only be made, amended or repealed if the owner of each lot that is or is proposed to be a special lot has given written consent to the by-laws.

Section 43 refers to the exclusive use areas as “Special Lots”.

An exclusive use by-law for an area of common property (or Special Lot) is mostly defined by an accurate drawing with dimensions done by a Surveyor for that purpose.

A by-law for Exclusive Use is a “Governance” by-law and must be passed by a “Resolution Without Dissent”.

See section 3(1) STA alphabetical listing for governance by-laws (b)(iv).

See section 123 STA for requirements for a Resolution Without Dissent (RWD).

A by-law for exclusive use is made by RWD and can only be varied, added to or removed by RWD.

It is, therefore, possible that exclusive use by-laws can become permanent as a by-law must be registered at Landgate.

Exclusive use is only one way that the allocation of common property can be managed.

LICENSE

Your strata management company has mentioned a “Licence Agreement” for exclusive use of some areas and common property.

See STA at section 26 shows that a “Licence” can be created

26. Long term lease or licence over common property

A lease or licence, or lease and licence, to use or occupy the common property or part of the common property in a strata titles scheme for a term or terms exceeding the period specified in the regulations in aggregate (including any option to extend or renew the term of a lease or licence) is not effective unless it has been approved in writing by the local government of the district in which the parcel is situated.

A Licence is not registered at Landgate

A Licence may contain terms or conditions that have the power to terminate the agreement if the licensee fails to adhere to the conditions contained within.

The strata company would need to maintain a separate register of any Licenses that have been granted.

The STA is silent about the standard of resolution required to approve a Lease or Licence, or maybe I wasn’t able to find the reference.

The former STA required a RWD under section 19.

This post appears in Strata News #699.

Shane White
Strata Title Consult
E: shane.white@stratatitleconsult.com.au