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My son’s townhouse in Sydney has two visitor car spaces and two possible car spaces in the common property. The car spaces are of different sizes and in good/bad locations. Two methods are proposed to allocate the car spaces among the four owners:
Method 1 – by drawing lots.
Method 2 – by ‘auction’ process The car spaces are independent valued to determine the reserve price. Highest bidders to ‘acquire’ the designated car spaces under a change of by-laws that entitles them to have the right to the exclusive use and enjoyment of the designated parking space. The change of by laws will be registered. Resultant money will be disbursed among the four owners or returned to the Owners Corporation for future strata expenditure.
Could you please comment on the feasibility of the two methods? Do you know any persons/experts who have done these kinds of allocation before?
It is a strata plan of four owners. Each townhouse has one existing car space/garage under title. Therefore some owners might not bid for the additional car space.
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Has your son’s strata scheme checked the conditions of Council approval when it was established? It may have been a condition of approval that the scheme has a certain number of visitor carparks. If that is the case then the owners can’t change anything without breaching that condition.
I don’t really have any comments on the methods other than method 2 would meet the requirements of being in the interests of the owners as a whole, assuming there were no Council requirements preventing it.
I am assuming the parking spaces are common property. If so, granting exclusive use of the spaces to particular lot owners would, in ACT-speak, be granting a ‘special privilege’. In the ACT that requires an unopposed resolution of a general meeting. In NSW, I think it might be a special resolution but I am not certain.
In order to pass a special resolution, with fewer than 25% opposed, from a set of four, you need the resolution to be unopposed in any case.
As a matter of principle, a lot owner’s access to use and enjoyment of the common property should depend only on being a lot owner, not on capacity to pay in an auction. If I were there I would oppose allocating them by auction. Instead, I think you need to have either a negotiated agreement or agreement to draw straws. Perhaps one lot owner would be prepared to take the space that is smaller but closer while another get the one that is bigger but further away. Is there scope to make them more equal at OC expense as part of the solution. Eg. Can the smaller space be widened before being allocated?
it is worth making sure you get it right. Our OC allocated parking spaces on common property with the EC purporting the grant special privileges without the authority of the requisite general meeting resolution. That happened in the 1980s and it came back to bite us a few years ago. We had to completely redo all our parking allocations after complex negotiation. A handful of owners refused to accept the legal advice we had and so the resolution to correctly and equitably allocate failed. We then had to go to the Tribunal for orders to give effect to the failed motion. Those few owners continued to fight which drove up the legal costs as we needed to be represented to maximise the chance of getting the right outcome. In the end we did get the right orders and things are sorted, but it cost some serious money, all because of a few who would not listen to reason or good legal advice.
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@AYK said:
By the way, where did you get the legal advice? They might have offices in Sydney. It might be useful to get some legal advice before commencement.We used Teys Lawyers who don’t exist quite as they did. Michael Teys, who provided the advice is now at: https://blockstrata.com.au/strata-law/
My reaction is still to not be keen on the auction aspect of your proposal. Perhaps better to collectively agree what would be reasonable compensation for getting one of the poorer spaces before then drawing numbers out of a hat for who gets which.
Let’s say one space is least desirable, two are middling and one is more desirable. Perhaps the deal could be that the middle two can be allocated without adjustment, the poorer one is allocated with a plus $X adjustment and the better one is allocated with a minus $X adjustment.
A resolution to allocate the spaces could also specify the witnessed process of drawing lots.
Just my suggestion and speaking to a lawyer could be a good idea!
Thinking out loud here – is there a third option? To (perhaps) lease the spaces, say on an annual basis. With lease fees going to OC accounts.
As there’s less spaces than lots, and as lot residents move in/out the parking space needs also change, so you wouldn’t be permanently binding the additional parking spaces to any two (or one?) lot/s.
Set lease fee at an applicable rate for your area and adjust from time to time to reflect changes in value.
Lease could specify various conditions. (such as only available for lease by lot residents, only for their personal/private use (no on-selling), only to be used for parking of a vehicle/trailer, OC has right to remove non-complying cars/objects/junk, and to remove vehicle at end of lease if not removed by leasee.)
The spaces could be protected with lockable bollards. Leasee pays annual fee + key deposit. Deposit returned at end of leasee’s tenure if they return lock and all keys. If they don’t key deposit is retained by OC and pays for locksmith to replace with a new lock.
Could that work????
You’d need to check your Development Approval and how many visitor parking spaces were specified.
Once you lease them for private use, they have ceased to be visitor spaces and you leave yourselves wide open to complaints for anyone, for instance, who required daily care and needed parking.
You would then face problems with the person who has been illegally leased a space that is no longer available. And it would only take one call to council for them to get involved too.
Lockable bollards are incredibly effective way of controlling car parking – and they are not that expensive.
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.
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