› Flat Chat Strata Forum › Levies and Unit Entitlements › Unit Entitlements – Staged development ‘off the plan’ › Current Page
25/07/2016 at 1:48 pm
#25141
Further to this.
We have now been told by the “valuer” of our complex that an appropriate method is to base Unit Entitlement on “Sales Price.” Which is apparently what he did.
In all my research I have found nothing that states that UoE is based on the “sale price” of “off the plan” units.
I am sure everyone on this forum is aware of how selling ‘off the plan’ works.
Initially the developer may offer apartments at a lower price to attract buyers and therefore secure finance. Once finance is secured and with the advent of time, prices on the remaining apartments rise.
This is what happened with our complex, those that bought earlier got them for cheaper & those of us who came in later paid more. Not because our apartments were bigger or better or any different – only because time had passed and real estate generally increases with the advent of time.
However, even those that bought later, bought well in advance of building commencing, and at least 15 months before the Strata Plan was registered. By the time the Strata Plan was registered the market value of all apartments would have been the identical (except for those without parking and possibly those with one less common wall). They are all on the ground floor with the same outlook.
How can it possibly be deemed fair to base Unit Entitlements on the sale price? The current market values of these apartments as empty shells would be identical.
Page 7 of the NSW Land & Property Information’s booklet Strata Plan Fast Facts, states the following;
The unit entitlements should be based upon the market value of the lots at the date of registration of the strata plan. Attention is drawn to section 183 Strata Schemes Management Act 1996
Does anyone have any experience of UoEs being based on sale price rather than market value?
Many thanks