Flat Chat Strata Forum Common Property Current Page

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  • #8220

    Dear Jimmy,

    We have a common property area underneath our apartment building which has the potential to be converted into proper storage space with a certain volume of space allocated to each apartment – say 10 cubic metres to each of 12 apartments

    Assuming it was cost-effective and possible to legally allocate an equal secure space to each apartment, could you please give a percentage estimate as to how much value this might add to each individual apartment or advise what is the best way to obtain an accurate and objective assessment as to what this value might be.

    The building is in SE Sydney close to the sea and was erected in the mid sixties. The apartments are all close to 85 square metres in area. Assuming a market value of
    $600 000 per apartment, what value might 10 cubic metres of dedicated storage area add to each property ?        

    Muffin

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  • #15795
    Jimmy-T
    Keymaster

      It sounds like you are leaning twards dividing common property up and adding it to the individual lots.  If this is the case, I would warn against it as it is legally complicated and there are easier ways of doing this.

      We had a similar issue in our building and we erected storage cages then rented them out to the owners on a first come, first served basis (there weren’t enough spaces for everyone).  In your case the owners collectively own the space anyway but the value is what they would be prepared to pay for the cage rather than the space).

      I would find out how much it would cost to create individual storage cages for each apartment and then rent them out to owners to cover the cost of the caging.  Allocate cages to owners  by ballot and if they don’t want to pay, then offer them to those who want extra storage.

      Once a year (at the AGM, for instance), you can ask the owners who have passed on the storage if they want to take it up.  Otherwise it gets let out to other owners on a first in best dressed basis.

      I think the OC needs to keep control of these storage spaces even if owners are guaranteed use of the cages, one way or another.  The rent from them can go back into funds to help with maintenance and management.

      As far as an absolute value goes, call around and ask what commercial storage firms charge per cubic meter in your area and then knock a bit off that. But there’s no absolute figure because storage space is only valuable to those who need it. It really comes down to what your residents are prepared to pay and how much more attractive the storage makes your apartments to potential buyers and tenants.

      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.
      #15950

      Dear Jimmy,

      Many thanks for the very informative response to my query re storage space. 

      In this case the common property space has been utilised by some resident owners for storage as well as some repair and maintainence work. This informal co-operative use goes back over 30 years and has operated well without any problems until quite recently.

      Yes, as you say, some owners are now ‘leaning towards’ this space being divided equally, and legally allocated to the individual lots as ‘storage space’.

      Those promoting this approach claim that this “may ” add $20 000 to $30 000 to the value of each individual unit. Naturally this possibility will be attractive to many owners because, assuming an average unit value of $600 000, this would represent an overall increase in value of between 4% and 5%. Other owners are skeptical of this claim and wish to get a realistic idea of [as you say] “how much more attractive the storage [would] make your apartments to potential buyers.” Is a 4% to 5% increase in value a reasonable assessment in your opinion ? 

       

      Muffin

      #15953
      Jimmy-T
      Keymaster

        I was a bit skeptical at first but look at it this way, the median price for units in my building is about $750K and the average price for a car space is about $60K. I would put the value of non-car storage space at about one-third to a quarter of that which would work out between two and three percent.

        Another way to look at it is that eight cubic metres of commercial storage space in the Eastern Suburbs will cost about $230 a month. It may differ in your area and you wouldn’t be charging commercial rates but it does give you an idea of the intrinsic value. Have a look at the Kennards website to make your comparison for your area and see how it adds up.
        One thing I do know, you don’t realise how valuable storage space is until you move into an apartment that doesn’t have any. I think the pro-storage people may be gilding the lily a little, but they do have a point.

        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.
        #20583

        Why don’t you compare it to these Storage Rates https://www.taxiboxmobileselfstorage.com.au/faq/storage-rates/

        Their base rate if $119 for a storage unit which is picked up and delivered. Could cost significantly less.

         

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