Leasing a unit title, whether the lease is of a commercial or a
residential nature, can be more complex than a typical lease of a
After all, the landlord and the tenant won't just be subject
to the terms and conditions of the lease documents. Both parties
will also need to take into account the provisions of the Unit
Titles Act 2010 (Act) as well as the specific body
corporate operational rules that relate to the development.
Unit Titles Act and the body corporate's rules
A standard lease will require the landlord to comply with its
obligations as a member of the body corporate. A landlord will also
be obligated to use its "best endeavors" to ensure that
the body corporate complies with its own rules and the provisions
of the Act.
This may impose an obligation on a landlord to incur some
expense to achieve the desired outcome. A landlord could, for
example, be required to issue court proceedings to force the body
corporate to maintain the common property if this was impacting the
Correspondingly a lease will usually set out that the tenant is
required to comply with both the body corporate's rules and any
provisions of the Act that relate to the tenant's use of the
In this way the tenant is accountable to the landlord, and the
landlord remains accountable to both the body corporate and their
neighbouring unit owners. If a tenant has an issue with the body
corporate or a neighbouring occupier then they must first discuss
this with their landlord.
A body corporate is able to pass a rule restricting the
allowable use of units to certain activities e.g. a unit may not be
able to be used for commercial purposes.
Similarly a 2013 case (Croslands Investments Ltd v Body
Corporate 183787) decided that a body corporate was able to
pass a rule that the body corporate's consent would be required
for any change in the use of a unit. In that instance the
development was a shopping centre which already contained 2
beautician tenancies. A 3rd tenant wished to amend their
business use so that they could offer a nail spa service. The body
corporate was able to deny that change of use on the basis that a
3rd beautician-styled operator would be detrimental to
the overall tenancy mix of the development.
Maintenance of a leased unit title premises
A typical lease will require a tenant to maintain the leased
premises to the same cleanliness and condition as they were in when
the lease commenced, albeit subject to fair wear and tear.
The Unit Titles Act in turn requires the landlord (as the
unit's owner) to maintain their unit in good order, or to carry
out any work that is ordered by a territorial authority or public
body. The Act's emphasis is on reducing the potential for a
poorly maintained unit to damage neighbouring units.
The Act also states that the body corporate is permitted to
enter the unit to view its condition and to ascertain whether the
Act and the rules are being complied with. The body corporate is
also required to carry out work to a unit's building elements
and infrastructure that serves more than one unit.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The article discusses the legislative requirements and then provides some comments on common mistakes made by caveators.
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