The Court of Appeal recently heard a case regarding a sign over the door of a business, where the sign extended 57cm over common property. The decision is of particular relevance for signs, storage areas and parking spaces.
The case concerned the type of resolution needed to permit a person to have exclusive use of common property.
The legislation is clear that:
- owners cannot be deprived of the use of any common property without their consent;
- to grant an exclusive licence over the common property for under 10 years a special resolution must be passed; and
- to grant an exclusive licence for over 10 years a resolution without dissent is required.
The importance of the case
It establishes that where exclusive use of the common property is granted, and the licence is not stated to be for a set time, then:
- it will be deemed to be a perpetual licence; and
- unless it is authorised by a resolution without dissent the infringing item is liable to be removed.
A resolution should specify:
- The statutory basis for the motion. It is a licence/lease or a grant of exclusive possession?
- The precise area in question?
- Are any licence fees or rent payable?
- If there are any conditions?
- The duration of the right granted.
- Maintenance obligations for the area. The default position if the grant is silent is that the person receiving the right has the obligation to maintain the area. There is no harm in making this clear in the grant.
Existing grants of exclusive use should be reviewed to make sure that they have been properly authorised.