What are the requirements of an owner wanting to lease their lot out?
What is the notification that must be provided to the Owners Corporation / Community Association?
Sub-Letting some considerations to consider and more
These are some of the questions we answer in providing a better understanding the obligations in renting out your unit. As an owner of a lot or unit in a Strata Scheme or Community Association, like a house you may enter into a tenancy agreement with a prospective tenant to rent your lot/unit. However what are the requirements under the Act for the owner to notify the Strata Scheme (owners corporation) or Community Association.
As an owner you must:
give your tenant a copy of the by-laws for the scheme / community;
provide a written tenancy notice within 14 days of commencement of lease which includes:
(a) the name of the tenant and an address for service (postal or email), and
(b) the date of commencement or assignment of the lease or sublease, and
(c) the name of any agent acting for the owner in respect of the lease or sublease.
If a tenant is to ‘sub-let’ the lot that they are renting from you; as the owner, you may not wish to have sub-letting. As such, you should have included within the tenant agreement that sub-letting is not permitted.
Issues can arise from a tenant subletting the lot; in which you as the owner may not be aware of. Making a sound financial decision is one aspect, however ensuring that not only your apartment is well maintained and looked after, but also the common property. Damage caused to the common property by your tenant or their sub-tenant may result in significant costs to you as the owner.
Not to mention the fact that increased noise and commotion, extra waste, extra demand for car parking, and misuse of common spaces can all add stress and uncertainty to residents.
But it’s not just your fellow residents you risk upsetting by choosing to illegally sublet with the very real chance your landlord could land in hot water as a result of you violating local by-laws, with some councils having rules banning short term accommodation arrangements.
Considerations:
1. Insurance: Do you have adequate insurances in place to protect your lot from damage(s);
2. Clauses: Having a clause in the tenancy agreement which stops the tenant from sub-letting;
3. Be Informed: If you are to permit subletting, you should consider inserting a clause that you as the owner must be informed in writing. As the owner, you may also insert that such sub-tenant must be approved by you;
4. Type of Sub-lets: If you are allowing sub-letting, be careful of who you will allow the tenant to sub-let to; from time to time, community housing tenants may not be the most suitable for the building;
5. Notification to Owners Corporation/Community: In accordance with section 258 (Strata Schemes Management Act) and 219 (Community Land Management Act), the owner must provide notice within 14 days of the details of the tenancy and the lease details. Penalties may be applied for failure to do so.
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