{"id":1059,"date":"2018-09-28T00:39:18","date_gmt":"2018-09-28T00:39:18","guid":{"rendered":"https:\/\/theonsitemanager.com.au\/news\/?p=1059"},"modified":"2018-09-28T00:39:18","modified_gmt":"2018-09-28T00:39:18","slug":"letting-agreement-declared-void-under-section-116","status":"publish","type":"post","link":"https:\/\/theonsitemanager.com.au\/news\/letting-agreement-declared-void-under-section-116\/","title":{"rendered":"Letting Agreement declared void under section 116"},"content":{"rendered":"<p><strong>On 26 September 2018 Adjudicator Roseman declared the letting authorisation for Allure Apartments in Townsville void.\u00a0 <\/strong><\/p>\n<p>The management rights operator, Allure Townsville Accommodation Pty Ltd (ATA), had taken a transfer of the letting authorisation in June of 2015.\u00a0 The management rights were transferred from Allure Hotel and Apartments Pty Ltd (AHA) who had acquired them from the developer, South Townsville Developments Pty Ltd, on 3 September 2014.<\/p>\n<p>From the beginning, the management rights business had been operated from a manager\u2019s unit (lot 201) and a reception area, initially located on the common property.<\/p>\n<p>While AHA was the operator, that area of common property was converted into part of a new lot, being lot 100.\u00a0 At no stage did AHA own lot 100 or lot 201.<\/p>\n<p>Section 116 of the <em>Body Corporate Community Management Act 1997<\/em> requires that where a letting agent business is conducted from a lot then at all times the letting agent must be the registered owner or lessee of that lot, or there must be a deed in place between the Body Corporate and the owner of the lot.\u00a0 Under that deed the lot holder must agree to transfer the lot if the letting agent is required to transfer the letting agent\u2019s management rights under Division 8.<\/p>\n<p>Adjudicator Roseman found that on the facts before her:<\/p>\n<ul>\n<li>AHA had never been the owner or lessee of lot 201 or lot 100 (from when it was created);<\/li>\n<li>There had been no deed in place between the Body Corporate, AHA and the owner of lot 201 or lot 100; and<\/li>\n<li>The letting agent business had been conducted from lot 100 (the reception) and lot 201 (the manager\u2019s lot).<\/li>\n<\/ul>\n<p>As a result, there was a breach of section 116 and in consequence \u201cthe letting agent\u2019s authorisation as letting agent has no effect\u201d.\u00a0 In short, Adjudicator Roseman declared that at the time the Body Corporate committee authorised the transfer of the management rights (caretaking agreement and letting agreement) from AHA to ATA, the letting agreement was void.\u00a0 Accordingly, no transfer had taken place as a void agreement cannot be transferred.<\/p>\n<p>In September of 2015 ATA had entered into a lease with the owner of lot 100 which was back dated to commence on 5 May 2015.\u00a0 Adjudicator Roseman found that this did not cure the problem and the letting agreement was still void.\u00a0 That was because the lease was between the owner of lot 100 and ATA, and not the owner of lot 100 and AHA.\u00a0 In short, the lease had to be in place before the management rights were transferred.<\/p>\n<p>Because the lease was required to be in place \u201cat all times\u201d and it was not in place before the transfer took place, the void letting agreement was not transferred.<\/p>\n<p>The decision is a critical one for management rights operators.\u00a0 It shows that Adjudicators will be prepared to declare a letting agreement void if section 116 has not be complied with.\u00a0 Accordingly, it\u2019s critical to ensure that section 116 is complied with at all times, especially before a transfer takes place.\u00a0 If not, there will be no effective transfer and the (void) letting agreement, will remain with the seller.<\/p>\n<p><strong>If you are concerned about what the decision means for you then contact<br \/>\nStratum Legal<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On 26 September 2018 Adjudicator Roseman declared the letting authorisation for Allure Apartments in Townsville void.\u00a0 The management rights operator, Allure Townsville Accommodation Pty Ltd (ATA), had taken a transfer of the letting authorisation in June of 2015.\u00a0 The management rights were transferred from Allure Hotel and Apartments Pty Ltd (AHA) who had acquired them from the developer, South Townsville Developments Pty Ltd, on 3 September 2014. From the beginning, the management rights business had been operated from a manager\u2019s unit (lot 201) and a reception area, initially located on the common property. While AHA was the operator, that area of common property was converted<a class=\"more-link\" href=\"https:\/\/theonsitemanager.com.au\/news\/letting-agreement-declared-void-under-section-116\/\">Read More &rarr;<\/a><\/p>\n","protected":false},"author":1094,"featured_media":485,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mbp_gutenberg_autopost":false},"categories":[6,2],"tags":[],"_links":{"self":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/1059"}],"collection":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/users\/1094"}],"replies":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/comments?post=1059"}],"version-history":[{"count":1,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/1059\/revisions"}],"predecessor-version":[{"id":1062,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/1059\/revisions\/1062"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media\/485"}],"wp:attachment":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media?parent=1059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/categories?post=1059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/tags?post=1059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}