A caretaker or letting agent is commonly granted the right to use part of common property to conduct their duties or provide letting services by ordinary resolution of the Body corporate. This is called an “occupation authority”.

Common problems we hear about occupation authority areas include:

1. the Body corporate’s CCTV equipment is stored in an area of common property and access is being refused;
2. the area of common property is being licensed to a coffee cart or restaurant business for profit;
3. the electrical switchboard is stored in that area of common property and our maintenance contractors cannot access it;
4. the caretaking and letting agreements have been terminated and the areas of common property are not being vacated.

Granting an occupation authority may be declared invalid if done for purposes not contemplated by the regulation modules. There are also limitations on how that area of common property can be used, rights that are not extinguished by the granting of the occupation authority, and key matters to be addressed at the end of the relevant agreements.

What are those purposes?

It depends on whether the authority is granted to a caretaker or letting agent.

Caretaker

If the occupation authority is granted to a caretaker, the purposes must be necessary to enable the caretaker to perform the obligations under their engagement. Importantly, reference can be made to the terms of the engagement agreed to between the body corporate and the caretaker when determining whether it was necessary.

Whether the particular part of common property granted to the caretaker is necessary to enable the caretaker to perform those obligations, will turn on the obligations contained in each agreement and the layout of the scheme.

As an example, it is likely that if a caretaker had duties to maintain common property lawns and gardens, that a shed on common property for the storage of tools and garden implements would be a valid grant of an occupation authority.

Letting Agent

If granted to a letting agent, the purposes must be necessary to enable the letting agent to conduct a letting agent business for the scheme. Importantly, the Courts have determined that the terms of the letting agreement are not relevant to determining this issue.

A letting agent business is defined in the Body Corporate and Community Management Act (Qld) 1997 as “conducting a business that provides services for securing, negotiating or enforcing leases or other occupancies”.

As an example, if a letting agent wants to use a particular part of common property to provide a laundry service, that may not be a service necessary for the letting agent to do as part of securing, negotiating or enforcing leases, and therefore not a valid grant of an occupation authority. That service would likely attract tenants to the facility, but could be provided by others, or provided by the letting agent as part of some other business.  

Unreasonable Interference & By-laws

Even if the purposes align with the regulatory modules, an authority to occupy parts of common property cannot be granted if doing so would unreasonably interfere with the use and enjoyment of a lot or common property.

As an example, if an occupation authority was granted to a caretaker or letting agent for common property that blocked a main entrance to the scheme, this would be an unreasonable interference.  

The terms of the by-laws of a scheme do not have an impact on whether a body corporate is able to authorise a caretaker or letting agent to occupy parts of common property.

For example, if the by-laws allow a manager to run a catering business, that provision alone does not give the body corporate the ability to permit the manager to use parts of the common property for that purpose.

Exclusivity & Profits

The body corporate may grant a caretaker or letting agent an occupation authority that is either exclusive or non-exclusive. Even if the authority specifies exclusivity for a certain area of common property, that area will still be subject to the body corporate’s rights to authorise access to others in specific circumstances.

There are also mixed views about whether the part of common property under an occupation authority can be sublicensed by the caretaker or letting agent. It is quite possible that any profit made by a caretaker or letting agent under any sublicense arrangement, may be required to be divulged to a body corporate.

It is useful to obtain tailored advice about the validity of proposed, or existing, grants of authority for a service contractor or letting agent to use parts of common property.

Termination of agreements

While a caretaker or letting agent may enjoy the use of an occupation authority area during the term of the agreement, the regulation modules state that this right automatically ends when the relevant agreement ends. Any continued occupation of that area of common property after the end of the relevant agreement would be trespass unless there is some other agreement entered into with the Body corporate.

Summary

Occupation authorities granted to caretakers or letting agents by bodies corporate involve important considerations regarding validity, access, exclusivity, and termination. Common issues include unauthorised use of common property, refusal of access to necessary areas, and the potential for authorities to be declared invalid. While occupation authorities may be exclusive, they remain subject to the body corporate’s rights to access. Seeking tailored legal advice is essential for navigating these complexities and ensuring compliance with relevant regulations.

Grace Lawyers regularly acts for bodies corporate in advising, negotiating, amending and granting occupation authority areas, as well as disputes about access, termination, validity and maintenance of occupation authority areas. If you require assistance, please call us.

Article written by Brendan Pitman, Partner, Grace Lawyers

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