This article discusses the NSW strata unit entitlement change process, including applying to NCAT and registering approved changes.
Question: In NSW, what is the process for changing the unit entitlements for lots in a strata scheme? Does the decision require a majority vote for any change to be approved?
Answer: The NCAT has power to make an order to change unit entitlements.
In NSW, the NCAT has power to make an order to do so. Our article: What Are The Principles Applied By The Tribunal In The Re-Allocation Of Unit Entitlements? sets out the principles applied by NCAT.
If a lot owner or the owners corporation wants to make an application to NCAT for an order for unit entitlements, before doing so the steps (briefly) are:
- Obtain a valuation from a registered valuer of all the lots based on market value (note different valuation dates may apply) and a prepare a revised schedule of unit entitlements based on their findings;
- Consider if there are grounds to request an order that the original owner pay damages for differences in unit entitlements if orders are made to change them;
- If the owners corporation is making the application then it obviously needs to pass the resolutions to engage the valuer and to support the NCAT application;
- If a lot owner is making the application we recommend that they provide the valuation to the owners corporation with resolutions that the owners corporation make the NCAT application for orders;
- Make the application. Note mediation is not required for these orders;
- If NCAT makes the orders the owners corporation needs to register the orders with the NSW Land Registry Service.
Section 236 of the Strata Schemes Management Act 2015 applies.
If however you have a scheme that was the subject of a strata development contract then a revised schedule of unit entitlements based on market values of the lots can be lodged by the owners corporation with the NSW Land Registry Service up to two years after the completion of the development. Section 90 of the Strata Schemes Development Act 2015 covers this scenario.
This post appears in the August 2022 edition of The NSW Strata Magazine.
Allison Benson
Kerin Benson Lawyers
E: allison@kerinbensonlawyers.com.au
P: 02 4032 7990
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