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Topic
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I own a flat in a small company title building. All owners pay the same amount in levies, despite the fact that one of the flats in the building is twice the size of all others and has two garages (the other flats in the building have none).
All owners are interested in converting the building to a strata scheme, where the levies will be based on meterage, but in the meantime is there a way to have the owner with the big flat contribute a more fair amount towards the levies for the company? If it went to vote can we all vote to re-structure the contributions?
Also, we’re all contributing an equal amount to the cost of having the building converted to strata, even though the owner with the much larger flat and garages stands to gain considerably more from doing this (based on strata flats being valued more highly than company title)
Any advice would be appreciated thanks.
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A general meeting of the company can, by way of a simple majority vote, resolve to reallocate the shares of its members, but you will need some basis for that reallocation, and that’s a valuation of almost the same scope as will be needed for the proposed conversion to Strata Title.
So perhaps initiate discussions between company representatives and some Registered Valuers with Strata experience, with the objective of selecting one to in the first instance undertake a valuation of all existing Lots in order to substantiate a reallocation of shares now, and secondly to form the basis of a later determination of the units-of-entitlement of those Lots if the conversion to Strata Title is later approved.
@nocreditbob said:
I own a flat in a small company title building. All owners pay the same amount in levies, despite the fact that one of the flats in the building is twice the size of all others…Do all units actually or potentially contribute the same to the costs that have to be met from the levies? IE. Would all unit cause similar wear and tear on the common property needing maintenance or have cause to call the managing agent? Perhaps the same levies are reasonable?
I know it is normal to allocate unit entitlements and levies in proportion to a valuation of each unit. That makes sense at the start when you are buying a greater or lesser portion of what the developer created. Later, I am not so sure. A larger unit might be expected to tend to have more people in it so that unit might use shared facilities rather more. The larger unit contributes more to the overall cost of insurance on the property but a lot of other costs are probably fixed per unit costs. Is there a substantial grounds maintenance cost that might be fairly made the same for all? If new entitlements were created with some combination of a fixed component and a varied-by-size-or-valuation component, perhaps the magnitude of the change from what you have now is not enough to be worth bothering with?
Do all units actually or potentially contribute the same to the costs that have to be met from the levies? IE. Would all unit cause similar wear and tear on the common property needing maintenance or have cause to call the managing agent? Perhaps the same levies are reasonable?
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