We recently had an owner who raised this issue, as they felt that the allocation was unfair. I went away and did some calculations and was surprised to find that although at first glance they did look a bit out of whack, the entitlements were surprisingly fair, based on the value of the lots. It is often the case that owners will claim that the allocations are unfair, but when you work it out by percentage of the total pool it isn’t.
I’m curious as to why the minority of owners believe the allocation is unfair, what were the reasons they gave?
Like Jimmy I thought that you could reallocate unit entitlements if the owners unanimously agreed, but it seems that isn’t the case in NSW (other States provide for this). So if you have to apply for an order, there are some key things:
– the principal consideration is value of lots, as distinct from size, or views or whatever else (as those other elements will go to the value anyway)
– you have to satisfy the CTTT that the entitlements were unreasonable at the time of allocation, and this has to be supported by a valuation of the lots at the time of registration
Note that valuation now is not relevant, unless you fall into 2(a1) or 2(b), which is unusual.
– the valuation and application process is expensive.
Unless the OC is pretty certain that the entitlements were unreasonable at the time of allocation, then they should ask themselves why they are making the application.
(unless of course there was a subsequent subdivision or changed use of land etc.)