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  • #8274
    Solotimeyellow
    Flatchatter

      Hi. We’re just purchasing in a small strata scheme (13 units) and queried the unit entitlement for the unit we are purchasing with the owrner. He didn’t know the answer. Our new unit has the largest entitlement (by 15%) but is not the largest unit by size – the next door one is larger (about 15% by size).

      I can see some reasons why this might have been arguable when the strata was created (this is a wharehouse conversion) due to slightly better light and view amenity.

      However, since the strata was created the unit next door (and the one next to it) have enclosed balcony areas (adding an additional 20 sq m or so to each).

      Do unit size changes post strata creation form the basis for a readjustment to the entitlements? It would be relatively minor – and would probably only affect 3 units – ours and the 2 next to us – with ours decreasing say by 10% and theirs increasing by 10% and 5% respectively (just a guess). That would save us about $800 a year. I suppose it would depend on the costs of doing all this – we might not recoup our money for years!

      Any thoughts?

    Viewing 7 replies - 1 through 7 (of 7 total)
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    • #17078
      scotlandx
      Strataguru

        Unit entitlement is determined at the time of registration of the scheme, by reference to value, as distinct from size. So you may have two lots the same size, one with a view, so the one with the view is worth more and therefore has a greater entitlement.
        Note this is the general rule, some developers can be a bit naughty when they allocate entitlements.
        There are lots of cases on reallocation of lot entitlements, the starting point being whether the allocation was unreasonable at the time of registration. If not, the Tribunal won’t make an order for reallocation.

        Refer section 183 of the Act:

        https://www.austlii.edu.au/au/legis/nsw/consol_act/ssma1996242/s183.html

        In your case the lots have changed after registration, which may or may not materially affect the value. Perhaps when the owners sought approval a condition of the approval should have been that the owners agree to a reallocation. That doesn’t stop you putting up a resolution to do that now, but those owners may not agree.

        #17093
        Whale
        Flatchatter

          Everything that “Scotty” has advised is correct, however IF less than 2 years has elapsed since your Strata Scheme was Registered then a revision of the Schedule of Unit Entitlements for as few as one Lot can be achieved without the need for Orders by the Tribunal, and without the concurrence of all Owners.

          If that’s the situation with your Plan then please advise and I’ll fill in the blanks.

          #17136
          Solotimeyellow
          Flatchatter
          Chat-starter

            Thanks very much for your responses – I’m much clearer now about the situation.

            #17139
            George
            Flatchatter

              I can understand the concern. In our situation, there was a reallocation of car parking spaces when a unit was sold.

              There were two approved drawings showing the car parking arrangements. The first 1 showed 25 car parking spaces to Unit 1003. This drawing was approved when the Strata went live.

              Prior to the sale of Unit 1003, there was a reallocation of car parking spaces to provide 2 car parking spaces to Unit 1003. I am not able to find the approval of all owners to the changes. It seems that I am one of the few people who have both drawings.

              The strata levees are now at $1940 for a single level 3-bedroom unit

              The strata management is now in Administration.

              What do I do in this situation?

              #17192
              Whale
              Flatchatter

                The possibilities are numerous and somewhat complicated, but I’ll try.

                One scenario may be that the first drawing was produced by the Developer, and it had for convenience allocated all parking spaces to the one Lot, and then nominally allocated each of those to individual Lots as each was sold; a first in best parking space approach. Then when the majority, if not all Lots were sold and their parking spaces allocated, the Developer may have produced a revised drawing to reflect that.

                The second scenario may be that after the majority, if not all Lots were sold and their parking spaces allocated, the Developer then registered that drawing, i.e. the second one you have, as the Strata Title Plan together with the applicable Unit Entitlement allocations, which can be done without the need for an approval by the Owners Corporation.

                The last scenario is that assuming either of the drawings produced was indeed properly registered [eg with Land & Property Information (LPI) in NSW] then the Developer could still submit and register a Plan of Strata Subdivision showing the parking space allocations and the applicable Unit Entitlement allocations. Again, that doesn’t require the consent of the Owners Corporation itself but rather the consent of all then Lot owners, but it does require Council approval either directly or by a Private Certification (most developers’ preference).

                Whatever the scenario, what matters is the drawing that’s been registered as the Strata Title Plan (STP), which will also show the Unit Entitlement for every Lot and thereby give you an indication of whether the Levy amount you’ve quoted is correct (relative to other Lots). Visit the website of your State/Territory “Land Titles Office” (LPI in NSW) and use your Strata Plan number to search for and download a copy of the registered STP.

                #18205
                Jeff
                Flatchatter

                  Things have taken a turn for the worst for my troubled friend. She wrote a letter to the treasurer with her cheque attached for the levies according to her unit entitlements and he defaced both the letter and the cheque and wrote on this letter to pay the levies that was agreed at the AGM (which was based on equal amounts for all the 12 lots instead of levies according to unit entitlements). He will not accept the “correct” levy and reminded her that failure to pay her levy by the due date will result in interest being charged for late payment. There is no other way she can pay the levies as she does not know the account number that the strata has so she cannot bank it direct to the bank account. I suggest she starts Mediation. I assume this process takes a while to settle and in the meantime she could be in arrears for some time. Any suggestions on how to tackle this dilemma? By the way he intimated that he will hold a meeting “in the near future” to address the problem of unit entitlements. Would she be better off to pay the higher amount and let the Treasure run rough shot over her. Her main problem is that English is her second language and that she is a woman inexperienced in these matters and I dare say frightened by this whole experienced.

                   

                  It is clear that the complex should be handled by an experienced strata manager.

                  #18208
                  Jimmy-T
                  Keymaster

                    OK, your friend may benefit from the Fair Trading translated documents that you will find HERE (scroll down to the bottom) and HERE (although the only strata related document i can see is Strata Living in Chinese.

                    She really needs to cal 13 32 20 and ask about getting her levies sorted out – they should be able to provide an interpreter.  If she wants to sort out the block properly, it would also help if she could find a strata manager who would be prepared to take her through the process of becoming a Statutory Manager appointed by the CTTT (although with a small block it’s sometimes hard to get one of the better SMs).

                    Meanwhile, if she has been overpaying for a while, she should be in credit rather than arrears.  It may be worth working out what she should have paid compared to what she actually paid.

                    Then she could write a letter to the treasurer along the lines of:

                    Dear Treasurer

                    I note you have refused my valid payment of my levies and returned my cheque.  I have to inform you that by asking for equal levies for all units, you are in breach of the Strata Schemes Management Act 1996 which clearly states that levies are to be calculated based on Unit Entitlements.

                    78 Manner of levying contributions

                    (1)  An owners corporation levies a contribution required to be paid to the administrative fund or sinking fund by an owner of a lot by serving on the owner a written notice of the contribution payable.

                    (2)  Contributions levied by an owners corporation must be levied in respect of each lot and are payable (subject to this section and section 77) by the owners in shares proportional to the unit entitlements of their respective lots.

                    Not withstanding the current quarter’s levies, I am currently $XXXX in credit due to your overcharging of levies for my unit.

                    Please amend your record accordingly and adjust my levies notice to the correct figure.  If this is not done with immediate effect, I will have no choice but to take action at the CTTT to have a Strata Manager appointed to take over the running of this block under Section 162 of the SSMA.

                    Your friend then has to decide whether or not she just wants to sort out the levies – phone call to Fair Trading and possible mediation, cost about $78 unless she’s on a pension.  Or go for the appointment of an SM which is an applications straight to the CTTT and there’s information about the process HERE.

                    Good luck

                    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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