Question: If new balconies mostly benefit seven of nine units but negatively impact sunlight and views for the remaining two ground floor lots, must all owners still contribute equally to the cost?
There are nine units in our block. The owners corporation wants to extend the building’s balconies, positively impacting seven units. However, the balconies will block sunlight and views for the two ground-floor lots. The owners corporation plan on proceeding, with all owners sharing the cost equally.
Some units will get 20m2 or 15m2 of usable balcony space, and the ground floor lots will only gain 13m2. The plans include removing the front walls to make way for glass sliding doors, an advantage for the top seven units, but this will reduce privacy for the two ground-level units that face the road. Are the two ground floor units required to contribute equally to the works even though the improvement doesn’t benefit them?
Answer: Assuming the by-law is not invalidated and that it is in respect of common property works, a lot owner would need to contribute to the works.
This question is specific, and it appears to require legal advice.
In general, the scenario described would likely have required a development application (which would have involved a detailed consultation process). The extension of the balconies is likely to require subdivision as the lot balconies are increasing in size and incorporating airspace, that was previously (or presently, is still) common property. This might also require adjusting the unit entitlements as a result. We are also unsure of the age of this strata scheme, and it may be under the pre-74 centreline rule or the post-74 current rules.
In respect of unequal benefit, no rule expressly prohibits by-laws that create an unequal benefit (assuming these works create an unequal benefit). A by-law may be invalidated by the Tribunal, pursuant to Section 150 of the Strata Schemes Management Act 2015 (NSW) (“SSMA“) where a by-law is unjust, or harsh, unconscionable, or oppressive: Section 139 of the SSMA. A by-law, by merely creating an unequal benefit, might not reach the criteria of unjust, harsh, unconscionable, or oppressive, and whether the threshold is met would turn on the specifics of the by-law and the unequal benefit.
Assuming the by-law is not invalidated and that it is in respect of common property works, the answer would be in the affirmative: a lot owner would need to contribute (according to unit entitlement) to the works.
These are the general observations we have from the question, but given the very specific scenario presented, and a lot can turn on the specifics, we strongly suggest the enquirer seek legal advice.
Ashley Howard and Matthew Lo Kerin Benson Lawyers E: enquiries@kerinbensonlawyers.com.au P: 02 8706 7060