Walk through a typical 1970s or 1980s Melbourne walk-up unit block and you’ll see the same scene: each ground-floor unit has a fenced backyard with a clothesline, a garden bed, maybe a shed and a paved outdoor sitting area. The fence is solid, the gate locks, and the space feels unambiguously private.
It often isn’t. In a substantial proportion of older Victorian unit and townhouse developments, the fenced “backyard” attached to a ground-floor lot is in fact common property — belonging collectively to every owner in the block. The fence creates the impression of private ownership, but the plan of subdivision tells a different story.
This guide covers how to detect the fenced-in common property trap, what you actually own and owe, and how it affects what you can build, what you must disclose at resale, and what the Owners Corporation can require you to remove.
Why this happens — the historical pattern
Victorian unit blocks built before about 1990 were typically subdivided under the older Strata Titles Act 1967 (since replaced by the Subdivision Act 1988 and the Owners Corporations Act 2006). Developers in that era often left ground-floor outdoor spaces as common property for several practical reasons:
- Cost savings. Drawing tighter lot boundaries on the plan reduced surveying, drafting and lodgement costs.
- Insurance simplicity. Common property fits under one building insurance policy held by the OC. Outdoor spaces inside individual lots required separate cover.
- Fence and drainage cost-sharing. Developers expected fences and drainage to need ongoing repair, and putting them on common property meant the OC sinking fund (not individual owners) carried the cost.
- Re-allocation flexibility. Common property can be reallocated between lots more easily than registered lot boundaries can be redrawn.
The fence then went up — often years after subdivision — to give residents privacy and to mark off the area each ground-floor unit used. The fence created a powerful visual cue, but it did not change the plan of subdivision, and it did not transfer any ownership.
Detection table — visible features vs legal status
Use the plan of subdivision (in the Section 32) to compare what the property looks like with what it actually is:
| What you see on inspection | What plan of subdivision says | Real status |
|---|---|---|
| Fenced courtyard, locked gate | Inside lot boundary line | On-title — yours |
| Fenced courtyard, locked gate | Marked “EU Lot X” | Common property, exclusive use |
| Fenced courtyard, locked gate | Outside lot, no marking | Common property — check OC certificate for licence/lease |
| Fenced courtyard, locked gate | Outside lot, no licence, no lease | Pure common property — fence is unauthorised |
| Shared lawn area, low planter | Outside lot, no marking | Common property — shared by all owners |
| No fence, but vendor says “your courtyard” | Outside lot, no marking | Common property — vendor is wrong |
The bottom-row case — agent or vendor presenting a courtyard that does not appear on the plan as the lot’s — is more common than buyers expect. Always read the plan yourself; do not rely on the listing description.
What you actually own when the fenced area is common property
If the area inside your fence is common property and there is no registered lease, no licence, and no exclusive use designation, then in strict legal terms:
- You do not own the land
- You have no exclusive right to use it
- Other lot owners have an equal right to access it
- The fence itself, if it sits on common property, is also common property
- Any structures you have built (shed, deck, raised bed) are common property fixtures
In practice, decades of unchallenged exclusive use have created an informal understanding in many older buildings — everyone behaves as if each unit owns its fenced area. But that informal understanding provides no legal protection. It is not adverse possession (which does not run against common property under the Owners Corporations Act 2006), and it does not transfer ownership when you buy.
Fence repair under the Fences Act 1968
The Fences Act 1968(Vic) applies to fences between neighbouring properties. Where the fence sits on common property, the OC is generally the “owner” for fence repair purposes, not you — even if you and your neighbour-unit collectively use the fenced areas. Two buyer implications:
- Repair cost:If the fence falls down, the OC pays (from levies) — not you individually. But the OC can also decide whether to repair at all, and to what standard.
- Approval needed: If you want to replace, raise, or rebuild the fence, you typically need an OC special resolution under section 5 of the OC Act. The next-door unit can object even though the fence faces only their fenced area.
The improvements problem — what you can lose
This is the trap that catches buyers most often. If a previous owner installed permanent improvements on the fenced common property — a deck, a pergola, a garden shed, a paved area — those improvements are technically owned by the OC, not by the lot. When you buy, you are not acquiring the deck. The OC could, in theory, require you to remove it. In practice the OC almost never does, but the possibility creates several concrete risks:
- Future OC committee changes. A new committee might take a different view from the historical one. The deck you paid an extra $30,000 for at purchase could be ordered removed at your expense.
- Insurance gap.If the deck collapses or the shed burns down, your contents insurance probably won’t cover it (it’s not your contents) and the OC’s building insurance may not cover it either (it wasn’t authorised). Both insurers can deny the claim.
- Resale disclosure. When you sell, you must complete the Section 32 honestly. If the improvement is on common property without authorisation, your vendor disclosure obligations require disclosure. A buyer may walk, or demand a price reduction.
The encroachment risk — when other owners can complain
Other lot owners in the building have legal standing to complain about encroachments on common property. Under the OC Act 2006, the OC may seek orders from VCAT requiring removal of unauthorised structures. The Tribunal can order:
- Removal of the structure at the lot owner’s cost
- Restoration of the common property to its prior condition
- Compensation for damage caused by the structure
VCAT applications to remove unauthorised structures are uncommon because they require an active complaint and an OC willing to fund the proceedings. But they happen, and they happen disproportionately when the OC has changed hands or a new owner has fallen out with the committee.
How to convert a fenced common-property area to a more secure right
If you are buying a unit with a fenced common-property courtyard and intend to keep using it as private space, three escalating options exist (cheapest to most secure):
- Get a licence. Ask the OC to pass a special resolution licensing the area to your lot. Typical cost: $1,500–$4,000 in legal fees and OC meeting costs. Provides modest additional protection but is still not on title.
- Get a registered lease (OC Act 2006 s52). Pass a special resolution authorising a 99-year lease, prepare the lease document, and register the lease on the lot title. Typical cost: $4,000–$8,000. Gives the strongest non-conversion protection.
- Convert to lot via plan amendment. Apply under the Subdivision Act 1988 to amend the plan of subdivision so the fenced area becomes part of the lot. Requires unanimous OC resolution and Land Use Victoria registration. Typical cost: $8,000–$25,000. Maximum protection.
The first two options can often be negotiated as a special condition of sale — the vendor obtains the licence or lease before settlement, at their cost. We cover this in the courtyard pricing & negotiation playbook.
What to check in the Section 32
Before you bid on a unit with a fenced backyard, work through this checklist:
- Plan of subdivision boundaries: Trace the lot boundary. Is the fenced area inside or outside?
- Plan markings:Look for “EU” (exclusive use), “C/P” (common property), or labelled letters referenced in a key on the plan.
- Title search: Search for any registered leases that might apply to the lot.
- OC certificate: Required disclosure of all licences and leases over common property.
- OC rules: May contain historical authorisations or restrictions on use.
- OC meeting minutes: Often included in the Section 32. Look for past resolutions about courtyards, fences, decks or modifications.
The buyer’s mental model
Treat every fenced outdoor area attached to a unit as common property until the plan of subdivision proves otherwise. That assumption protects you from the trap and forces the right questions. If the fenced area turns out to be inside your lot boundary, you have lost nothing by checking. If it turns out to be common property, you have avoided the most common apartment-buying trap in older Victorian buildings.
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.