A member of the EC is proposing to rent out half of our visitor car spaces and use the money to offset Strata fees.
Our building is a mix of residential and commercial and has approx 40 units. There are approx 10 visitor car spaces.
My main concern are:-
Is this legal? Surely there is some council regulation that there must be a minimum number of visitor spaces available to take cars off the street.
How would the income be distributed? Each unit would recieve some revenue (per unit entitlement) which I assume would have to be declared as taxable income? Or can the strata just offset this against outgoings?
You are right on your first point. Renting out designated visitor spaces would require council approval as it would (probably) be in breach of your Development Approval in terms of the number of required visitor spaces and a change of use as well.
In the unlikely event that council approved this, the money would go into the Admin fund. Any excess amounts could theoretically be disbursed to owners on the basis of unit entitlements but that would require a unanimous vote of owners. Otherwise it would be used to offset the running costs of the building.
And just as a general observation, unless you have a huge number of unused visitor parking spaces, this is a bad idea.
I agree with JT. Bad idea and would require council approval. If you did go ahead, it would be the Owners Corporation that did the renting out and received the income. With additional income, the OC would not need to levy owners as much to cover its various expenses. Consequently, the owners would all benefit financially through lower levies in proportion to their unit entitlements without any personal tax implication.
If the OC is large enough to be registered for GST, then it would have to add GST to the space rental and include that in its tax statements.