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Hi,
I am looking into developing my house into an attached dual occupancy with a view to setting up a 2-lot strata scheme and selling off one Lot. I understand the differences in requirements for a 2 Lot scheme. What I don’t understand is how disputes are dealt with.
If the other Lot owner breaks any of the by laws or doesn’t pay into the sink fund, etc., the Owners Corporation can take action, but – as they are 50% of the Owners Corporation, how can the corporation make a decision to take action? Surely in this instance, all discussions end in stalemate?
Does anyone have experience (good or bad) of a situation like this?
Thanks!
Mike
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Mike said… What I don’t understand is how disputes (in a 2 Lot Strata) are dealt with.
There are dispute settlement procedures enshrined in the NSW Strata Schemes Management Act but in the absence of consistent goodwill between Owners, they’re otherwise resolved with difficulty unless the person undertaking the development can use valid reasons to have the units of entitlement of one Lot differ from the other.
Some developers have in the past used somewhat dubious reasons to validate the units of entitlement (UOE) allocated to Lots; often to those that they wished to retain themselves.
It’s now well accepted, and defensible where Owners at some stage apply to reallocate UOE within their Plan, for those to be based on the range of factors that make up the “market value” of the individual Lots.
It would be a good move on your part to speak with a Registered Valuer about the differentiating factors that may be applied to your proposed development, for you to design the Lots accordingly, and to have that Valuer use those factors to Certify the UOE prior to Registration of the Plan.
Again, a minor difference in the UOE in a two-lot Plan assists to resolve day-to-day issues where Owners might not entirely agree but where a majority “poll vote” will settle them, thus leaving the established procedures in the Act as the means to settle “heavier” issues if goodwill fails.
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