New Strata Plan & Changes to Unit Entitlements

The balconies would probably be considered common property, I'm thinking, so no need for any change in UEs – unless someone has acquired a gi-normous terrace.

Peter

Now I'm really puzzled. I'm not disputing what you say but it's clear that strata law in Canberra is very, very different form NSW.

Here in NSW, I'm pretty sure if the floor space of a unit in a block doubled, the owners would be expected to take a bigger burden of the overall cost of maintaining the strata complex and everyone else's levies would be reduced accordingly (provided someone went to the trouble of challenging the UEs).

I can't see what changing the value of the whole strata scheme has to do with changing one unit's share of the responibilites for the running of the strata scheme.  Unit Entitlements are based on the owner's share of the overall plan.

It's more complicated that the mere size of the unit or of the actual value of the unit but these two factors are closely related and are the major considerations in establishing Unit Entitlements (in NSW, Victoria and WA, if not elsewhere).

In a very rough equation if 10 units each had a UE of 10 making up 100 and then one of the units doubled in size, you would have a very strong case in NSW for arguing that the owner of the expanded unit had 18.18 and everyone else's was reduced to 9.09, still adding up to 100.

Having said that, if ALL the other units were similarly extended, then it wouldn't make much difference.

But if I had doubled the size of my unit and not had to pay any more in levies because of no increase in Unit Entitlements, I'd be keeping very quiet about it.  I reckon you might have got a free kick, there, Peter.

By the way, it's different again in Queensland where the unit entitlements are split when it comes to calculating levies – one charge for running costs, the other for overall maintenance. 

The thinking is that while a two bedroom sub-penthouse could easily be twice the size of a two bed-room apartment elsewhere in the building, it's occupants aren't going to make twice as much use of the facilities.

But then  in Queensland, strata is a whole other minefield.

Hmm. I checked the letter I had from a property valuer at the time we were planning our extension. It did seem to be in line with what I wrote above from memory. The argument included that there would be little impact on other owners because I stayed within my unit entitlement and funded it entirely myself so there would be little change in the overall costs owners generally.  That valuer's opinion was something I had to submit with the Development Approval. 

We actually had a debate about this issue in general at an AGM shortly after I extended, though not particularly because of it. One owner proposed that we should apply to have a review and reallocation of unit entitlements. The Act allows that (in the ACT) with a special resolution. The motion was lost resoundingly. I can't remember if the proposer wanted us to all have the same unit entitlements since it was a long time since the place was built and all owners were a similar burden on the OC for ground maintenance and such. Alternatively, he might have wanted to increase the unit entitlements for the minority of units that had had major extensions all within their unit boundaries. I think both views were put during in the debate. Cogent arguments could be made to make the spread of unit entitlements wider or narrower.  In the end few cared to change the status quo.

While our unit entitlements reflected the size of units at the start (and their cost to build), most of our costs now are not particularly proportional to unit size; a small unit costs the OC more than half as much as a unit twice as big.   Maintenance of our large area of common land is a major cost along with management fees.  Larger units might have more people in them and more chance of wearing out the tennis court or playgrounds but there would not be much in it. Insurance is a significant minority of our costs.   I agree I may have had a 'free kick' in that I contribute no more to insurance yet my greater improvements have been covered/absorbed in the overall insurance valuation of the property. On the other hand for most corporate expenses my extension made no difference.