While the body corporate is not involved in the legal relationship between an owner, as a member of the body corporate and landlord of a unit, and a tenant, the body corporate is able to enter into its own lease agreement relating to the use and occupation of portions of the common property comprised in the scheme.
In terms of section 4(h) of the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”), the members of the scheme may, by special resolution, authorise the trustees to enter into a written lease agreement with an owner or an existing occupier of a section, relating to the use of a portion of the common property. Provided that the lease period, or any subsequent renewal period thereof, does not exceed ten years, as this would contemplate a long term lease agreement.
With regard to long term lease agreements, section 17 of the Sectional Titles Act 95 of 1986 (“the STA”) and section 5(1)(a) of the STSMA, provides that the owners and holders of a right of extension (in terms of section 25 of the STA) may, by way of a unanimous resolution, direct the trustees to let common property to an owner, occupier of a section, or a third party, for period of ten years and more. The unanimous resolution, once passed by the members, must be supported by a trustee resolution, and a notarial lease of land must be registered.
When entering into either a short term or long term lease agreement, the parties to the lease agreement may agree to a reasonable monetary amount as rental in exchange for the use of the portion of common property under the lease agreement, as well as any conditions of use and enjoyment such as compliance with the scheme’s registered management and conduct rules.
Portions of common property which are often included in short term lease agreements are parking bays, store rooms, and any part of the common property suited to the use of owners and occupiers. Whereas, long term lease agreements are often entered into between the body corporate and third parties for the use and operation of laundry facilities, positions most suited for the installation of cellphone masts or the infrastructure for fibre optic services, and the provision of public parking in mixed use sectional title schemes.
Before entering into a lease agreement, the body corporate must ensure that the correct process is followed, and that the parties to the lease agreement are duly authorised to do so. Failure to do so, may result in an unenforceable lease agreement.
Should you have any queries relating to this topic, or require our services to draft a lease agreement over common property, contact us via email at consulting@paddocks.co.za or telephonically on 021 686 3950.
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