This article discusses NSW mixed use strata commercial levies and when commercial lots may be separately responsible for costs.
Question: I begrudge the extra expenses created by a large commercial lot in our mixed use development. They pay more levies due to their unit entitlement, but shouldn’t they have their own facilities?
I cannot understand how a profit making commercial lot, though paying a little more in levies, can make claims on the strata.
We have the added cost of outside lights left on from dusk till dawn, constant use of our common area toilet, removal of their excess rubbish along with our own. Sure a 60 seat restaurant should pay for their own facilities.
Windows got broken in commercial lots and they made a claim on our insurance. Surely commercial premises should have their own insurance?
Answer: Lots pay their levy contributions in accordance with unit entitlements. From the contributions of all lot owners the owners corporation has funds to pay for repairs and maintenance of the common property.
Lots pay their levy contributions in accordance with unit entitlements. From the contributions of all lot owners the owners corporation has funds to pay for repairs and maintenance of the common property. This will include electricity for lighting the common property areas, rubbish collection from the common property areas or cleaning of common property toilets.
The only way to make a lot responsible for repairing or maintaining common property is through a by-law either under s108 of the Strata Schemes Management Act (if they were to add to the common property) or more commonly through a common property rights by-law granting the lot exclusive use of specific areas.
It would be worth checking your scheme’s by-laws to see if they grant exclusive use rights to the commercial lots and if so, on what basis. Generally, when an exclusive use right is granted it is on the condition that the lot owner benefiting from it pays for repairs and maintenance of this area.
This post appears in Strata News #467.
Allison Benson Kerin Benson Lawyers E: allison@kerinbensonlawyers.com.au P: 02 4032 7990