Re: Changing Unit Entitlements

Thank you everyone for your comments thus far – you are helping make this complex matter a bit clearer.

To give some background facts:

1. there are 14 lots in the block 4 on each of the first three levels and two on the upper level – called penthouses (some say sub penthouses because there are two there.

2. the original / current unit entitlements were set by the (we think) the developer.

3. the four lots on the lowest level have unit entitlements of 11; the four on the next level up have UE of 12; the four on the third level have UE of 13 and the two on the top level have UE of 14. Unit entitlements total 200

4. many of the lots in this strata plan were sold off the plan.  Some of them (5 lots) were ultimately sold to people who had “invested” in the development and or were shareholders in the development – hence the sale prices in those cases are not “arms length”.

5. the builder went into administration / liquidation just as the building was being finished.

6. We have had home owners warranty claims in the building over a number years and have exhausted that insurance.  Owners will need to contribute to significant special levies to fund the balance of the cost of defect repairs.

7. A representative of the developer told me around the time of settlement that the UE were originally intended to be 11; 12; 13 and 14; as you went higher in the building (and the values / selling prices got higher) however Council wouldn’t allow four units on the top floor (something to do with occupancy numbers) so as the two penthouses UE’s were doubled.

8. The owners of the two sub penthouses (the minority I mentioned) are complaining that the UE’s are inequitable (especially now that we face significant special levies to repair the building).

8. We have had a valuation report done however it is dated 13 August 2013 and makes no reference to values at the time the strata plan was regisitered.

9. It does conclude that the penthouse UE’s should be reduced by 33% while lower lots should increase from 7% to 24%.

10. As I commented above (at point 4) we don’t know all the values at the time the strata plan was registered (and some were not “arms length” transactions however based on what we do know about purchase prices at the time of registration of the strata plan most owners (while recognising that there is most likely some inequity) do not believe the valuation report we have received has  got it right.

I hope this assists in further helpful comments being made about this issue for our benefit and also others strata dwellers who have similar issues to tackle.

Thanks again everyone for your comments thus far.