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The Strata Schemes Management Act 2015 at 236. Order for reallocation of unit entitlements says:
(1) Tribunal may make order allocating unit entitlements The Tribunal may, on application, make an order allocating unit entitlements among the lots that are subject to a strata scheme in the manner specified in the order if the Tribunal considers that the allocation of unit entitlements among the lots:
(a) was unreasonable when the strata plan was registered or when a strata plan of subdivision was registered, or
(b) was unreasonable when a revised schedule of unit entitlement was lodged at the conclusion of a development scheme, or
(c) became unreasonable because of a change in the permitted land use, being a change (for example, because of a rezoning) in the ways in which the whole or any part of the parcel could lawfully be used, whether with or without planning approval.
I’m in a large scheme in NSW that is more than 30 years old. Our building has not been properly maintained. Now that plans are being made to do some serious capital works, a number of residents are concerned that their unit entitlements are more than they should be and so they will have to pay more than their ‘fair share’ of the capital works.
Does anyone have a view on whether the Tribunal accepts applications to reallocate unit entitlements that were set decades ago?
There’s no time limit in the section of the Act, nor should there be. Levies in many older buildings were either skewed artificially low, to attract buyers to the larger, more expensive apartments or just lazily divided equally because there was no appreciation that a top floor north-facing apartment with a view would eventually be worth more than a ground-floor unit facing a brick wall to the south.
If there is an obvious disparity there should be no problem in getting this through especially if you can get unanimity among owners on the new splits. However, this is unlikely as some owners will lose out. The way to get everyone on board may be to make it clear that you aren’t looking to backdate the new unit entitlements – you just want a fair split going forward.
Also, if you can’t get unanimity, those seeking the redistribution will have to pay for a surveyor to provide an independent assessment of the new UEs, and then you have to work out if it’s worth the money to make the change.
Waratah – To add to JT’s comment ….. it may be helpful to you to read through some previous NCAT decisions to find out what the Adjudicators will be looking for and to make sure that your Application is fully supported by the correct documentation etc.
See the link below for a 2014 case. It was unsuccessful but the reasons why it was unsuccessful may help you improve your Application.
Jimmy, you suggest that those who want redistribution who need to pay for a valuation, not all owners.
The latest strata committee minutes show that the committee has agreed to employ a valuer to assess the unit entitlements.
At one point a price in the tens of thousands was suggested as the price to get a formal valuation.
Does this need to go to a general meeting first?
If your scheme is properly run, your AGM will include a motion that allows the strata committee to make decisions on behalf of the Owners Corporation. Restrictions on that decision-making exist in the Act meaning they can make day-to-day decisions (like allowing pets or otherwise) but can’t pass by-laws or engage in legal actions above a certain cash limit, for instance.
In the case of employing a surveyor to assess the unit entitlements, I’d say that was perfectly legitimate.
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