Saturday, 15th June 2019

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Winlam
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Last seen: 4 years 2 weeks ago
Joined: 26/07/2012

Hi,

 

Correct me if I am wrong, but:

 

1) I believe I am at liberty to lease my garage in our strata - Yes or No?

 

2) To whomever I choose?

 

3) What if they are not an owner or even a resident?

 

4) And what if that necessitates them having a key to get them into our gated community?

 

5) Is the Owners Corp at liberty to prohibit leasing of garages to non residents?

 

6) Would this necessitate a special By Law to have effect?

 

many thanks for any advice onb this issue.

 

and regards,

 

WinLam.

 

Jason
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Last seen: 3 years 5 weeks ago
Joined: 09/02/2011

Hi WinLam. 

I have just been through this exact issue.  I own a unit in North Sydney and I don't have a car so I bought my unit with a carspace so I believed I was entitled to lease it to whomever I wished.  I leased it to a bloke who worked in North Sydney and I organised for him to have a key to the security gate and the garage.

Until I leased my spot, the Chairman of our building had the spot next door and as soon as they found out I didn't have a car, his wife started parking there without my permission.  When I leased my spot, I told him she would have to stop parking there.  He told me it was "illegal for me to lease my spot and against the by-laws."  I told him there was nothing in the by-laws that dictated I couldn't lease my spot.  He said it was a "general known by-law that renting of carspaces was absolutely not permitted." 

I rang a lawyer who said that "a lot of people rent out their carspaces particularly when they have no car and live near a central business district.  It is the owners responsibility to make sure the person using the garage is responsible and that keys are returned when the user no longer requires it." 

He said that it is no different to renting a room in you unit. You still have to give the person renting it the security keys.  When you bought the unit, you bought it with a carspace.  You should be able to give whomever you wish access to use it.

Take at look at sites like www.parkingmadeeasy.com.au  They are all carspaces that owners in buildings are renting out and some of those are in gated security buildings.  I was told that the OC could not stop me from leasing out my own carspace.  I was disgusted that when I did rent it out that someone in our building let the tyres down on the car of the person renting it.  I can guess who that was.  The guy renting it perservered and fortunately we haven't had any problems since. 

Winlam
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Last seen: 4 years 2 weeks ago
Joined: 26/07/2012

Hi Jason,

Thank you so much for your very prompt and detailed reply - it came just in time for our OC meeting this morning.

Everything you have said confirmed my thoughts on this subject. 

My only remaining question for this forum is whether an OC can actually pass a by law specifically restricting leasing garages/carspaces to other people within the building - or not - and if so, what meeting would be required to pass it and what numbers needed for it to get up?

I would probably be photocopying my post and your reply and sending it to the Chairman of your OC. :-)

regards,

WinLam.

mini
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Last seen: 1 year 30 weeks ago
Joined: 13/05/2013

Winlam wrote:
My only remaining question for this forum is whether an OC can actually pass a by law specifically restricting leasing garages/carspaces to other people within the building

An owners corporation could make such a by-law. However whether it'd be able to enforce the by-law is a somewhat different question.

Section 49(1) of the Strata Schemes Management Act 1996 relevantly provides:

"(1) By-law cannot prevent dealing relating to lot No by-law is capable of operating to prohibit or restrict a ... lease ... or other dealing relating to a lot."

As was said in White v Betalli [2006] NSWSC 537 at [53]:

"...subs 49(1) only limits the operation of a by-law. It does not strike at the validity of a by-law. That is to say, by-law 20 may not be capable of preventing the owner of lot 2 from granting an easement over the watercraft storage area in favour of a third party. That does not mean that the by-law is invalid. Rather, it is not capable of having that operation. ..."

If I have correctly interpreted that passage, it means, relevantly for the present case, that s 49(1) restricts the operation of a by-law fundamentally so that a by-law cannot restrict a lease. Therefore, any attempts of the owners corporation to enforce a by-law purporting to restrict a lease should be unsuccessful.

However, the owners corporation can make a by-law prohibiting the use of a lot for any purpose that is prohibited by law. If the development consent of your building prohibits leasing car spaces to people not residing within the building, then such action will likely be caught by such a by-law and be enforceable.

So it is important to examine the terms of the development consent.

Hope this helps.

 

kiwipaul
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Last seen: 28 weeks 3 days ago
Joined: 06/07/2011

Winlam wrote:

My only remaining question for this forum is whether an OC can actually pass a by law specifically restricting leasing garages/carspaces to other people within the building - or not - and if so, what meeting would be required to pass it and what numbers needed for it to get up?

I very much doubt they could restrict you leaseing to a fellow resident (I'm more doubtfull about a non resident but Mini seems to have covered that).

But a bylaw requires 75% of the vote at a GM in favour to pass and then be registered to be effective. But even if a bylaw is passed their is no gurantee that they could enforce it because any rubbish can be registered as a bylaw and it is only tested for validity when it's taken to Adjudication.

ShemikaJSpencer
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Last seen: 1 year 45 weeks ago
Joined: 30/07/2017

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