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How the Ownership of Common Property Works
Author: Col Myers
Date: February,2010

The nature of ownership of common property is set out under Section 20 of the Strata Schemes (Freehold Development ) Act 1973.

Section 20 provides:

20        Body Corporate to hold common property as agent for proprietors

The estate or interest of a body corporate in common property vested in it or acquired by it shall be held by the body corporate as agent:

(a)           where the same person or persons is or are the proprietor or proprietors of all of the lots the subject of the strata scheme concerned – for that proprietor or those proprietors, or

(b)           where different persons are proprietors of each of two or more of the lots the subject of the strata scheme concerned – for those proprietors as tenants in common in shares proportional to the unit entitlements of their respective lots.

A decision of the NSW Court of Appeal considered the rights of an owner to permit an invitee to use the common property. These proceedings were an appeal from a decision of a District Court Judge that an owner be awarded damages for false arrest and false imprisonment. 

The facts of the case were that a Mr Koumdjiev owned a unit in a strata scheme at Ashfield.  One evening, the police were attempting to return his neighbour Ms Docherty to her unit pursuant to the provisions of the Intoxicated Persons Act 1979.  Mr Koumdjiev was standing in the entrance foyer of the building.  Ms Docherty asked him not to admit the police, and he refused the police entry.  When the front door was opened electronically by another occupant of the building, Mr Koumdjiev pushed against it; however the police succeeded in opening the door.  Mr Koumdjiev was arrested, placed in a police cell, but subsequently acquitted of charges of resisting police and assault.

The proceedings concerned the legality of entry into the building by the police but the decision was important as the Court was concerned to determine when, if one tenant in common of property purports to grant permission to another person to enter the property, another tenant in common might refuse or revoke that permission.  The Court referred to a number of authorities which generally identified the tension between two incidents of possession: the right to grant or to withhold permission to others to enter the property, and the right to use the property with other co-owners (which includes the right to allow others to use the property) on a non-exclusive basis.

In respect of the common property in a strata scheme, the Court considered that if one unit owner permits a person to enter the common property to visit the owner’s unit, that licence cannot be revoked by another owner.  But a unit owner cannot give a licence, irrevocable by another owner, which is not reasonable and incidental to the right of the first owner to the possession and use and enjoyment of the common property.  This position is subject to any by-laws of the strata scheme.

The case concerned a licence to enter.  Accordingly, the decision would appear to mean that, subject to the by-laws of the strata scheme, an owner may permit his invitee to use the common property, but if the permission given to the invitee is not reasonable and incidental to the owner’s proper use of the common property, the licence may be revoked by another owner.