› Flat Chat Strata Forum › Levies and Unit Entitlements › An owner wants to change unit entitlements › Current Page
…Do you have a reference for “the valuation could not be more that some number of months old and still be used for the reallocation”? Haven’t seen that in the Act? What I have seen is that the special resolution must be not more than three months before the application.
From hazy memory (there was a lot of back and forth), I might be remembering the special resolution time frame. We came to the conclusion that we would need people to agree in principle with really knowing the effect because we would need agreement and cooperation to do the valuation, which would include a budget allocation for the valuation.
Only when we had the valuation, could we have put a motion at a second meeting to reallocate unit entitlements according to a new schedule based on that valuation. Otherwise, how could we expect to get a special resolution passed for a change of unknown effect?
Also, how much of this could the Executive (Strata) Committee do on their own? Could the EC commission the comprehensive valuation without reference to the full OC?
Not much, I think. The valuation would be a non-trivial expense so it would need to have been included in an OC-approved budget. Also, you would probably need the cooperation of all members to have access to all units, or at least more of them than you would need for an insurance valuation.
p.s. In relation to “Note that the valuation for this purpose is not the same as the usual valuation for insurance purposes”, what sort of valuation are we talking about? The Act refers to “the improved value of each unit relative to each other unit”.
A valuation for insurance purposes is simpler and cheaper. It is really about just the cost to rebuild, which is a completely different question from the relative sale values of the units. Eg. Two identical units might cost exactly the same to rebuild if they burned down but one might be worth more than the other due to a more desirable location eg. on elevated ground away from the street next to a park vs on a noisy street corner.
In researching this, I found one strata managing company’s website with the following statement: “The allocation is typically based on various factors such as the size, location, and features of each lot. Larger or more strategically positioned lots may have a higher Unit Entitlement.” Does this sound right to you? It doesn’t sound formulaic to me, and is more in keeping with my interpretation of “improved value”.
That sounds right. Where I am, we have units with the same floor plan but different UEs due to location and we have units in similar location and with same floor area but different plans, and the plans of one style were valued more highly than the other style.