How does letting of the common property work? Be it an owner / occupier that wants to rent a parking bay or a cellphone company that wants to rent roof space for their cellphone tower

The first step to answering the question is to ask a couple of questions –

  • Who wants to rent the portion of the common property?
  • For what period do they want to rent it?

Scenario A – the person wanting to rent a portion of the common property is an owner or occupier

Then you have to ask the second question – for what period do they want to rent the common property?

  1. If it is for a period less than 10 years a special resolution is needed – Section 4 of the STSM Act and there must be a signed lease agreement between the owner / occupier and the Body Corporate

  2. If it is for a period of 10 years or more a unanimous resolution is needed – Section 5 of the STSM Act and there must be a signed lease agreement between the owner / occupier and the Body Corporate

Scenario B – the person / entity wanting to rent a portion of the common property is a third party – ie not an owner or occupier – like a cellphone company for instance

This is always a unanimous resolution that is needed and there must be a signed lease agreement between the person/entity and the Body Corporate 

Quotes from the Act on this:
In terms of letting portions of the common property we need to look at various sections in the Acts.

First the definition of a lease:

Quote from the STSM Act:
Section 1(1)
“lease”, for the purposes of section 5(1)(a), means a lease which—

  1. was entered into for a period of not less than 10 years;
  2. was entered into for the natural life of the lessee or of any other person mentioned in the lease; or
  3. is renewable at the will of the lessee indefinitely or for periods which, together with the first period, amount in all to not less than 10 years;

Section 5 of the STSM deals with long leases of portions of the common property and leases to third parties – a unanimous resolution is needed for that.

Quote from the STSM Act:
Section 5. (1) In addition to the body corporate’s main functions and powers under sections 3 and 4, the body corporate—
(a)may, upon unanimous resolution, on direction by the owners and with the written consent of any holder of a right of extension contemplated in section  25 of the Sectional Titles Act, alienate common property or any part thereof, or let the common property or any part thereof under a lease, and thereupon the body corporate may, subject to section 17(1) of the Sectional Titles Act, deal with such common property or such part thereof in accordance with the direction and may execute any deed required for this purpose, including any  deed required under the Sectional Titles Act;

Section 4 deals with short term leases to owners or occupiers – a special resolution is needed for that.

Quote from the STSM Act:
Section 4. The body corporate may exercise the powers conferred upon it by or under this Act or the rules, and such powers include the power—
(h)to enter into an agreement with any owner or occupier of a section for the provision of amenities or services by the body corporate to such section or to the owner or occupier thereof, including, upon special resolution, the right to let a portion of the common property to any such owner or occupier by means of a lease other than a lease contemplated in section 5(1)(a);