Not all Sectional Title Owners live in the complex or estate where they have purchased a unit. In fact, it is quite common for an investor to buy a flat/townhouse with the intent to rent them out to tenants or as holiday accommodation.
Ordinarily, a lease will form a relationship between the landlord and tenant/s as well as between the tenant/s and the property. However, when leasing a sectional title property – a relationship between the tenant/s and Body Corporate also exists.
This means that when you are letting a unit, it may not always be straightforward, as the Body Corporate may have specific rules that could prevent certain types of letting (e.g. Short-Term or Holiday Letting.
Luckily this is not the norm, and owners usually have complete authority over their lease agreement with their tenant.
But what happens when a tenant violates the rules?
LOCUS STANDI AND PRIVITY OF CONTRACT
Basically, locus standi and privity of contract translates to: Can a Body Corporate sue/evict a tenant for causing problems within the Scheme and not abiding by the rules?
No. A lease agreement is between the owner and the tenant. The Body Corporate is not part of the contract and therefore, cannot legally evict a tenant. The owner is, however, liable for the actions/behaviour of their tenant/s.
So, while a tenant is not a member of the body corporate, they still need to adhere to the management rules of the Scheme to avoid any occupational issues and the imposition of fines for a breach of such rules by the tenants. Therefore the landlord or managing agent must provide tenants with an up-to-date copy of the Scheme Rules.
The Sectional Titles Schemes Management Act also requires that owners must provide the Body Corporate with the tenant’s details (name, contact number, email, copy of ID).
This is why it is crucial to work with an experienced rental agent that will look out for your interests and ensure that your tenant thoroughly understands the conduct rules.
Are you thinking about renting out your property? List your property with us today for our comprehensive property management services.