If you are buying a ground-floor apartment in Victoria, there is a good chance the listing will mention a courtyard. But before you start planning an outdoor dining setup, you need to answer one critical question: do you actually own that courtyard, or do you merely have a licence to use it?
The difference is significant. Ownership means the courtyard is part of your lot and appears within your lot boundaries on the plan of subdivision. A licence means the courtyard is common property belonging to the Owners Corporation, and you have been granted permission to use it — permission that comes with conditions and, in some cases, can be revoked.
What is a courtyard licence?
A courtyard licence is a formal agreement between the Owners Corporation (OC) and the lot owner that grants exclusive use of a defined area of common property. It is not a lease and it does not transfer ownership. Under the Owners Corporations Act 2006 (Vic), the OC has the power to licence parts of the common property to individual lot owners, subject to a special resolution at a general meeting.
In practical terms, a licensed courtyard means you can use the space as if it were your own — place furniture, maintain garden beds, enjoy privacy — but the land itself remains part of the common property. The OC retains ultimate control over what you can and cannot do with it.
How to identify a courtyard licence in the Section 32
There are two key documents in your Section 32 that reveal whether a courtyard is owned or licensed:
- Plan of subdivision: If the courtyard falls outside the boundary lines of your lot, it is common property. If it is within the lot boundaries, it is part of your lot and you own it outright.
- Owners Corporation certificate:This document will disclose any licences granted over common property. Look for wording such as “Courtyard B licensed to Lot 3 under a 99-year licence from 29/04/2023” or similar.
If you see the word “licence” or “licensed area” anywhere in the OC certificate or the registered plan, the courtyard is common property — not part of your lot.
Typical licence terms
Courtyard licences in Victoria commonly include the following terms:
- Duration:Most licences run for a long fixed term, often 99 years from the date the plan of subdivision was registered. Some are shorter — 25 or 50 years — which creates a renewal risk.
- Fee: A nominal licence fee of $1 per year is standard. However, the OC can review this at renewal.
- Maintenance: The licensee (you) is typically responsible for maintaining the courtyard at your own cost, including paving, garden beds, and fencing within the licensed area.
- Permitted use:The licence may restrict what you can place in the courtyard — for example, no permanent structures, no modifications to drainage, no enclosures without OC approval.
- Revocation: While rare, some licences allow the OC to revoke the licence if the licensee breaches the terms or if the common property is needed for building works.
Why it matters when buying
A courtyard licence affects your purchase in several ways:
- Renovation restrictions:You cannot build a deck, enclose the courtyard, or make structural changes without OC approval — and the OC may refuse. If the courtyard were part of your lot, you would only need council planning approval.
- Insurance:The OC’s building insurance covers common property, but your contents insurance may not cover improvements you have made to a licensed area. Clarify coverage before spending $5,000 to $15,000 on landscaping.
- Resale value: Some buyers are wary of licensed courtyards, particularly if the licence term is short or the terms are restrictive. An owned courtyard is generally more attractive to future buyers.
- OC rule changes:The OC can pass new rules that affect how you use the courtyard — restrictions on barbecues, outdoor furniture, or plants. Under the Owners Corporations Act 2006, these rules are binding on all lot owners.
Courtyard licence vs exclusive use
You may also see the term “exclusive use” on a plan of subdivision. This is different from a licence. Exclusive use areas are typically designated on the plan itself at the time the subdivision is registered, and the right to exclusive use runs with the lot permanently. A licence, by contrast, is a separate agreement that can have an expiry date and specific conditions.
Check the plan of subdivision carefully. If the courtyard is marked as “exclusive use” and allocated to your lot on the registered plan, your rights are generally stronger than under a licence agreement.
What to check before you buy
Before committing to an apartment with a courtyard, review the following:
- Is the courtyard within your lot boundaries on the plan of subdivision, or is it common property?
- If licensed, what is the licence duration and when does it expire?
- Are there renewal terms, and at what cost?
- What are the permitted uses and maintenance obligations?
- Can the OC revoke the licence, and under what circumstances?
- Are there any easements or covenants crossing the courtyard area?
Under the Sale of Land Act 1962 (Vic), the vendor must provide a copy of the plan of subdivision and the OC certificate in the Section 32. These documents contain the answers. If they are missing or incomplete, that is a red flag in itself.
Ready to check your contract? Upload your Section 32 or Contract of Sale at precontractreview.com for a pre-contract check — typically in just a few minutes.