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We’d like to get exclusive use of the roof space (common property) above our unit for a bedroom but some of the owners have suggested we should buy it outright – does anyone know the pros and cons of the two options?
thanks
SM
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I’m in the ACT, not NSW, but I would be surprised if you could purchase part of the common property outright. A grant of exclusive use is certainly possible. To get part of the common property converted to being part of your lot would, I expect, require having the strata plan redrawn and lot entitlements reallocated on the basis of a new valuation in which there might be winners and losers. In the ACT at least there is a very high threshold for doing that, perhaps an unopposed resolution, from memory.
I would expect a bylaw for exclusive use for the owner of your lot would be easier and just as effective.
Strata Monkey – no matter whether your possible use of the Common Property is by way of an exclusive-use privilege or by the purchase of that, in NSW the decision one way or the other must be made by way of a vote on a Motion by those present (including proxies) at a General Meeting of the Owners Corporation (O/C).
A purchase of Common Property (an conversely a sale of it by the O/C) requires a unanimous vote, and the granting of an exclusive-use privilege over it requires a decision in favour by ≥75% of those voting as determined from the units-of-entitlement of their lots (i.e. a “special resolution” by way of a “poll vote”).
Both options would require an adjustment to your Lot’s “market value” to be professionally determined at your cost so that its units-of-entitlement and therefore your Levy Contributions could be also adjusted (⇑) in the case of a purchase, and as the basis of a possibly equivalent annual payment to the O/C to account for the “benefit” derived from an exclusive-use privilege.
A purchase would additionally necessitate at your cost the re-drawing the Strata Title Plan to enable a Strata Sub-Division to be Registered with NSW Land & Property Information (incorporating the former Land Titles Office), whereas the exclusive-use option would require at your cost the drafting, lodgement, and Registration of a Special By-Law setting out the nature of that use and the Conditions arising, including a mandatory one making you and subsequent Owners of your Lot (and not the O/C) entirely responsible for all on-going repairs and maintenance of the area, and typically one requiring the payment of an annual fee to account for that “benefit” arising.
A purchase of the Common Property makes it part of your Lot and therefore yours and that of subsequent Owner/s, and an exclusive-use privilege cannot be rescinded by the O/C without the prior written consent of you and subsequent Owner/s.
So as Peter observed it’s much in a muchness really, and issues around the certainty or perhaps the comfort of “ownership” as opposed to permitted use by way of “privilege” aside, the exclusive-use option is the easier and lesser-cost option.
Fantastic and priceless information Whale! I’m reluctant to hijack this thread but I will add an anecdote.
Ten out of thirty units where I am have Exclusive Use car parking spaces granted under under dubious circumstances in 1975 with the NSW Strata Titles Act, ‘as made’ in 1973 operating. The Exclusive Users have never paid one red cent to have them, they add thousands to the real estate value of their units BUT… now the area needs refurbishing at a cost of many thousands, and guess what! They expect the Owners Corporation to pay.
Some of the Executive Committee reckon it’s the perfect opportunity for the Exclusive Users to formalise ownership in some manner similar to how you explain things could be done, but that would mean the Exclusive Users have to put their hands in their pockets. Of course they don’t even like that idea.
At the very least, the Exclusive Users should pay for the refurbishment of the area or offer to chip in, one might think.
The NSW Strata Titles Act 1973 is hard to find but it IS on-line and says an owner who benefits from an Exclusive Use car space must keep it in good order and serviceable repair, and unless excused by the by-law, is responsible for the performance of the duty of the body corporate (Owners Corporation today) in respect of the common property, or the part of the common property, to which the by-law relates.
The By-Law doesn’t excuse them from looking after it, it doesn’t say who has to look after it, so the Exclusive Users should.
There’s a storm a-brewin.
Oh… if you add up the Exclusive Users Entitlements you get just a smidgen over 25%. How about that!
@Costa said:
The By-Law doesn’t excuse them from looking after it, it doesn’t say who has to look after it, so the Exclusive Users should.Given what the Act said, your logic seems perfect. The unit owners who got the benefit of exclusive use of an area of common property should be responsible for any costs associated with its maintenance. That is certainly how we did it, explicitly in the resolution, to grant exclusive use of common property parking spaces to those owner who did not have parking within their unit areas. The common property remains common property but the conditions of the grants of exclusive use mean the OC can charge back to the benefitting owners any reasonable costs associated with maintenance (eg. repainting the carports).
@Costa said:
The By-Law doesn’t excuse them from looking after it, it doesn’t say who has to look after it, so the Exclusive Users should.The NSW strata Act addresses this by assuming that the owners corp WILL be responsible for common property under an exclusive use by-law UNLESS specified otherwise.
Since the law also won’t allow the by-law to be rescinded without the beneficiary’s approval, this is something that should have been drafted properly to begin with.
The Act’s intention isn’t to give responsibility to the OC, but to make sure someone is responsible if the by-law is badly written or negligent in this regard. I think you might be up the creek without the proverbial on this one.
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.
@JimmyT said:
The Act’s intention isn’t to give responsibility to the OC, but to make sure someone is responsible if the by-law is badly written or negligent in this regard. I think you might be up the creek without the proverbial on this one.
Must admit I agree with JT on this one but you do have a couple of not exactly ideal options IMHO.
1) As they only make up 25% of entitlements vote down any improvements to these parking spaces.
2) Advise them that unless they agree to a new bylaw transferring responsibility for maintenance to the lot owners the Strata will be applying for a review of unit entitlements which if approved will increase their Strata fees to compensate their increase lot value.
3) Advise them that you will be applying to have the bylaw declared invalid as Strata property was transferred to selected lot owners with no monetary compensation to the Strata (this is the weakest threat because bylaws have to be objected to within 2 years of registration but they might not know that).
JimmyT, Kiwipaul. I believe that could be the interpretation of the modern, current by-law. As I said, I don’t want to hijack this thread, but the by-law where I am was made under the NSW Strata Titles Act 1973 which IS on the net but very hard to find.
Hi all in this topic thread. Just found this.
Senior Lecturer in Law, University of NSW, Cathy Sherry said in article about the current Strata Titles Act (NSW) entitled ‘How Indefeasible is Your Strata Title? Unresolved Problems in Strata and Community Title’:
Section 52, SSMA provides that an owner’s corporation may make, repeal or amend an exclusive‐use or special privileges by-law with a special resolution and ‘the written consent of the owner or owners of the lot or lots concerned’. Section 54 SSMA stipulates that such a by‐law must provide for the maintenance of the area by specifying if the owner’s corporation will continue to be liable for its maintenance and repair or imposing that obligation on the lot owners concerned. An exclusive‐use by‐law that fails to do so is invalid.
This article appeared in 2010 is on the web and easy to find: Bond Law Review, Volume 21, Issue 2, Special Property Law Edition, 8 December 2010.
@Merrick N Sniper said:
Hi all in this topic thread. Just found this.Senior Lecturer in Law, University of NSW, Cathy Sherry said in article about the current Strata Titles Act (NSW) entitled ‘How Indefeasible is Your Strata Title? Unresolved Problems in Strata and Community Title’:
Section 52, SSMA provides that an owner’s corporation may make, repeal or amend an exclusive‐use or special privileges by-law with a special resolution and ‘the written consent of the owner or owners of the lot or lots concerned’. Section 54 SSMA stipulates that such a by‐law must provide for the maintenance of the area by specifying if the owner’s corporation will continue to be liable for its maintenance and repair or imposing that obligation on the lot owners concerned. An exclusive‐use by‐law that fails to do so is invalid.
It’s pretty much what I said (in Post 6) so thanks for the confirmation. For those encountering the word “indefeasible” for the first time (like me), the “indefeasibility of title”, according to Sackville and Neave’s Property Law Cases and Materials, means that “the [State Lands] register is the definitive record of all land interests, and thus, the registered proprietor is immune to claims contrary to the register.”
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.
But doesn’t she say the By-Law would be invalid? I don’t get it.
“An exclusive‐use by‐law that fails to do so is invalid.”
Yes that’s right. If you make an exclusive use by-law then it has to specify whether the owner or the Owners Corporation is responsible for maintenance and repair. If it doesn’t say anything about that then the by-law is invalid.
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