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Hi gurus, my neighbour has just sold their property in our 80s building for a whopping $2,000,000! It was completely renovated without OC permission.
For some reason, despite their property being larger than mine, and worth much more, (by at least 1/2 million) they pay less in Unit Entitlements and therefore have lower strata levies than I.
How can I persuade my Strata Manager to lower my levies in the light of this? We have an AGM some time soon.
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How can I persuade my Strata Manager to lower my levies in the light of this? We have an AGM some time soon.
The simple answer is that the strata manager doesn’t have the power to alter unit entitlements (UEs). This can only be done by a unanimous (virtually impossible to achieve) agreement by all the owners, endorsed by NCAT, or by orders from NCAT in favour of a compelling case presented by owners.
My first step in your case would be to present a motion at the AGM asking the OC to investigate the current level of levies and whether they are fair and equitable.
By the way, the renovated sale value of a property bears no relation to its unit entitlements. Relative size and location in the building are the determining factors.
Also, stories abound of owners who have set out to challenge blatantly unfair UEs only to discover that the cost of doing so – including surveyor and legal fees – far outweigh any financial gain that they might make through lower levies.
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Also, a more serious concern might be that the renovating owner, by not seeking permission, has deftly passed responsibility for their changes to common property (such as waterproofing in bathrooms) on to the owners corp. I would be asking the strata manager about that before I even raised the issue of levies. If you are lucky, it may not be too late for the OC to put a caveat on the sale.
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Re the Unit Entitlements, I read somewhere that size didn’t matter (so to speak); it was the value that did. So thanks for clearing that up.
Unit entitlements are roughly related to the value of the unit when first built, and that in turn is related to the size and location. So, for instance you could potentially have a small unit with a great outlook with the same UEs as a large unit with no outlook.
However, as the building matures and improvements are made to some units but not to others, the relationship between the value at sale of the apartments and their UEs diverges even further.
Throw into the mix that fact that some developers (who set the initial UEs) might scale them down on more expansive flats to make them easier to sell, then there is no direct correlation between the value of the units and their UEs.
On the question of raising the issue at your AGM, all you have to do is convince the majority of owners that they are being ripped off to benefit a minority and they can tell the chair what to do, rather than the other way round. And unless the chair has actually costed the process, their argument will carry little weight, especially if they are benefitting from this imbalance.
If you want to be alerted when anyone replies to your posts or responds to this topic, please register and login, then you will be able to subscribe to the topic. The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers. NB: Longer threads may spill over to additional pages - look for the numbers on the bottom right, under the last post.