A unit title body corporate is considering a resolution to grant a lease of common property to a telecommunications company for installing equipment. Under the Unit Titles Act 2010, what specific requirements must be met?
Correct Answer
B) A special resolution of the body corporate before the lease is granted
Section 56(1) of the Unit Titles Act 2010 lets a body corporate grant a lease or licence over common property only after a special resolution, which needs 75% of the eligible voters who vote (s 98). Owners who object can use the objection process in sections 212 to 216, and unless the body corporate resolves otherwise the proceeds are distributed to owners in proportion to their ownership interest.
Why This Is the Correct Answer
Section 56(1) of the Unit Titles Act 2010 lets the body corporate grant a lease or licence over common property only after a special resolution to do so. Section 56(4) applies the Act's objection process to that resolution, and any proceeds generally go to owners by ownership interest.
Why the Other Options Are Wrong
Option A: An ordinary resolution of owners and the Registrar-General's written approval
Section 56 requires a special resolution, not an ordinary one, and there is no requirement for the Registrar-General's approval.
Option C: A unanimous resolution of every owner, since common property is shared
Unanimity is not needed. The Act sets a special resolution (75% of the eligible voters who vote).
Option D: A decision of the body corporate committee after notifying the owners
A matter the Act reserves for a special resolution cannot be decided by the committee under delegation.
Deep Analysis of This Property Law Question
Leasing common property takes a shared asset out of owners' use for a period, so the Act requires the higher special-resolution threshold and gives dissenting owners an objection process.
Background Knowledge for Property Law
The Unit Titles Act 2010 has two resolution types: ordinary (a majority of eligible voters who vote, s 97) and special (75% of them, s 98). Ordinary resolution is the default (s 101); special resolutions are needed only where the Act says so. Dealings with common property are such cases: selling, leasing or licensing it (s 56) and granting easements or covenants over it (s 58). The 1972 Act's unanimous resolutions were replaced by special resolutions.
Memory Technique
Remember 'lease the common, go special': leasing, licensing or selling common property needs a special resolution under section 56.
When the body corporate wants to sell, lease or licence common property, or grant easements over it, think special resolution (ss 56-58).
Exam Tip for Property Law
Special resolutions are needed only where the Act says so, and dealings with common property under sections 56 to 58 are the classic examples. The committee cannot decide these under delegation.
Real World Application in Property Law
A telecommunications company offers annual rent to place equipment on an apartment building's roof, which is common property. The body corporate passes a special resolution at a general meeting, and the lease is then granted. Unless the owners resolve otherwise, the rent is distributed to owners by ownership interest.
Common Mistakes to Avoid on Property Law Questions
- •Thinking an ordinary resolution is enough to lease common property
- •Believing the committee can approve the lease without an owners' vote
- •Assuming a unanimous vote is required
Related Topics & Key Terms
Key Terms:
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