There is provision in Section 183 of the Act for financial penalties to the developer.
The registration of strata plans and Units of Entitlement (UOE) is prone to abuse by developers who have no real interest in the ongoing financial imposts on owners except insofar as the setting of UOE (and by default levies) can help sell their properties. Understandable from a commercial aspect but unacceptable as a process – prone to abuse. I am not sure what the answer is but I do think the fact you can’t review UOE unless you have valuations as at the time of registration makes it very difficult (perhaps purposely) to review UOE’s.
I would like to think in this day and age with all the data around that UOE’s could be more fluid and adjusted say on a five or ten yearly basis depending on valuations, if an OC so desires or simply as a part of the legislative process. The current system is very inflexible and the older a plan the more difficult it is to review. I would be interested to know from a valuer and maybe strata lawyer as to why the act was framed in such a way that we have to seek a reallocation of UOE based on the original valuations.
Away for the legal aspect the real problem for an OC is that if the UOE is badly skewed at registration it makes the imposition (usually increases) of levies at later dates difficult because of the percentage multiplier effect.
So for example say one owner whose property is valued at say $850,000 and pays $2,200 a qtr in levies and is faced with a 10% increase then s/he is up for an $880 a year impost. Another owner whose property is worth a similar amount but pays $900 a quarter in levies only pays an additional $360 a year. As the years go on the differential becomes more and more. The above is based on an actual situation where the initial valuations by the developer, ten years ago, were clearly skewed. Yes the owners can seek recourse but very often they don’t and they quietly stew – the process for UOE review is daunting and very expensive (in this case the quote was $16,000).
Eventually, in the above scenario, you have a situation where the gap between similarly valued properties is enormous and if enough lots are affected passing budgets where an increase is necessary becomes a nightmare.
I think there has to a better way to review UOE as a matter of course. We have periodic review of land for rating purpose – why not for units?