This article discusses NSW strata special levy unit entitlements and why owners pay based on unit entitlement, not individual benefit.
Question: We are replacing all windows and doors in our building. If our lot has less windows and doors, surely we should pay a lower contribution towards the special levy?
There are 9 units in our complex. The building requires the replacement of all windows and door. Our unit is situated in the middle of the building and has less windows and doors than units on the edge of the building.
I contacted our Strata Manager to question whether our contribution towards the work would be less than other lots, but he simply referred me to the Strata Management Act of 2015: Section 79 (1), Section 83 (2) and Section 106.
I have read these and I refer to Section 83 (2) of the Strata Schemes Management Act 2015 where it states:
83: Levying of contributions
- Contributions levied by an owners corporation must be levied in respect of each lot and are payable (subject to this section and Section 82) by the owners in shares proportional to the unit entitlements of their respective lots.
I may be reading this wrong, but I believe that as we only have 3 windows and 1 sliding door compared to the outside units having approximately 8 windows and 1 sliding door, shouldn’t our levy be less?
Answer: One in, all in. Levies can only be struck in accordance with unit entitlement, which determines your share of ownership in common property and how much you’ll pay to maintain it.
Levies can only be struck in accordance with unit entitlement, being the relative value of your lot versus all other lots within the scheme as at the date of registration. From the definitions under the Strata Schemes Management Act:
“unit entitlement” of a lot in a strata scheme means the unit entitlement of the lot shown on the schedule of unit entitlement for the strata scheme.
Unit entitlements are shown on the certificate of title and the strata plan and are set at registration. Unless unit entitlement is varied for whatever reason (which is a long and difficult process which needs to be mutual consent or a tribunal/court order), owners contribute a fixed percentage for repairs in a scheme, no matter where the repairs are and whether their lot is benefitted in a particular way.
One in, all in.
The following information can be found on The NSW Government Website: Buying a strata property
Know your unit entitlement to be sure.
‘Unit entitlement’ determines your share of ownership in common property and how much you’ll pay to maintain it. It also affects your voting power in decisions the owners corporation makes.
The strata plan will show the unit entitlement for each lot.
This post appears in the June 2022 edition of The NSW Strata Magazine.
Andrew Terrell Bright & Duggan E: Andrew.Terrell@bright-duggan.com.au P: 02 9902 7100