The terms “swapping”, “trans-positioning” or “re-allocating” are commonly used to describe changes to exclusive use car park area rights in a strata scheme. There are formal steps that are required to be completed to properly record the change. Completing these steps will ensure that you don’t get any surprises about your rights to use your exclusive car park area when selling your lot, which we have seen occur many years later after everyone has forgotten about the “handshake deal”.
The practice of transferring exclusive use car park allocations is permitted between owners of lots within the scheme and happens when a car park is no longer wanted and another owner agrees to the terms of transfer offered. Transferring allocations can also occur when swapping your current allocation with another owner, for convenience sake and again with agreement of any terms between the respective lot owners who hold the allocations.
Whilst the Body Corporate is not involved in the contractual negotiations and settlement between the respective owners that come to an agreement about their car park allocation, it is however crucial that the owners communicate the change they have agreed to the Body Corporate.
The notice to the Body Corporate of an agreement reached for changes to allocations ensure that the change is formally recorded in the Community Management Statement (CMS) and lodged with the Land Titles Office. Failure to provide notice will result in the change not being formally recorded in the Body Corporate records or with the Land Titles Office and will usually result in disputes in respect of rights of use of the car park in question when the respective Lots are sold.
Both the owners involved in the transaction and the Body Corporate have responsibilities to ensure the transposition of exclusive use car park areas are accurately and formally recorded.
The owners that are a party to the transaction of buying, selling or swapping exclusive car parks with other owners must provide the Body Corporates with a Reallocation Agreement. The Reallocation Agreement is an agreement in writing under which two or more owners of lots for which allocations are currently in place under an exclusive use by-law, agree to the reallocation of the exclusive use car park area between the lots. This agreement identifies the car park area that is being transferred and confirms consent from the respective owners.
Upon notice of the Reallocation Agreement, the Body Corporate Committee has an obligation to lodge a New CMS within 3 months. It is strongly recommended that a specialist Body Corporate solicitor is engaged to prepare and lodge the New CMS on behalf of the Body Corporate as the documentation will affect future property rights.
It is important to note that the Body Corporate consent to the recording of a new CMS specific to allocations under an exclusive use by-law is not required as noted in the Victoria Square  Adjudicator’s Order. In other words, owners do not require approval from the Body Corporate or the Committee to buy, sell or swap exclusive use areas with each other, but do need to properly inform the Body Corporate to formally record the change to the records.
Observing these obligations of both the owners and the Body Corporate Committee will avoid unnecessary delays and disputes and ensure that the Body Corporate records are consistent with any agreements reached between owners.
This article was contributed by Grant Mifsud – Partner, Archers the Strata Professionals