This article is about contributing to common property you do not use.
Table of contents:
- QUESTION: I understand the new WA Reform Act will provide an easier path if you have separate multiple strata bodies within a mixed use building. Is it feasible and easier under the new Act to separate these interests?
- QUESTION: If Common Property is sold, are the proceeds from the sale distributed between all lot owners?
- QUESTION: One lot owner wishes to create a by-law that exempts them from levies that are used to maintain our common driveway. Not all lot owners agree.
Question: I understand the new WA Reform Act will provide an easier path if you have separate multiple strata bodies within a mixed use building. Is it feasible and easier under the new Act to separate these interests?
I understand the new WA Reform Act will provide an easy path if you have separate multiple strata bodies within a mixed use building. Where we have a number of commercial offices and a number of residential lots is it feasible and easier under the new Act to separate these two interests?
How do we deal with the common property? Currently, our common property is being funded in line with entitlement units which is entirely unfair due to the large amount of commercial traffic or usage compared to the very minimal traffic usage of the residentials. Can this be re-calculated on a fairer user pay system under the new Act?
Answer: There are many strata schemes that have commercial, residential, retail within one building and each different group of use areas will have particular bylaws drafted for them that cater for specific expenses.
I believe some of those things could have been dealt with under the old act as well. My interpretation of that, not that I’m giving legal advice, but if there are different operating groups within the one building whether it be commercial, retail, residential, this can be dealt with by split budgets, which is not an uncommon thing.
There are many strata schemes that have commercial, residential, retail within one building and each different group of use areas will have particular bylaws drafted for them that cater for specific expenses that are directly attributed to, say, removal of food waste scraps, the office cleaning, foyers removal of rubbish particularly to commercial premises, etc.
Split budgets and split or segregated areas within the management statement or a customised set of bylaws for that particular strata scheme can be dealt with by apportioning the costs attributed to different cost centres by some other means other than by the unit entitlement values.
In some instances a group within a cost centre may have a particular cost attributed to that cost centre split equally or as per the unit entitlements for each of those units that are within that cost centre, or, a contribution is made by that cost centre to contribute to the strata company in general for a particular service, etc that everybody uses or services. This is a general response, as I haven’t seen the bylaws or the condition of the building.
This post appears in Strata News #455.
Question: If Common Property is sold, are the proceeds from the sale distributed between all lot owners?
I’m a council member for a large strata in Perth. One of our council members is hell-bent on selling common land to fund necessary common property repairs over the next few years.
I have been unable to find anything on the legalities of this other than taxation ruling 2015/3. It is my understanding that the strata council is unable to sell off common land without majority approval from lot owners; that lot owners are responsible for capital gains on the sale and that, by extension, any proceeds from the sale should be distributed between all lot owners, which means the strata council ends up with a lot of time wasted, potentially angry owners and no extra money in the coffers.
Is there anywhere I can readily find this information online, so we can put this issue to rest once and for all?
Answer: The council of owners cannot act autonomously in this matter and must refer the proposition to a General Meeting for discussion and approval.
I can give a very generalised answer to this question.
The Disposal of Common Property is contained in section 35 (1)(c) of the Act – “a Type 2” subdivision.
It requires a Resolution Without Dissent and consent of each “designated interest” holder.
The council of owners cannot act autonomously in this matter and must refer the proposition to a General Meeting for discussion and approval.
Local Council may not approve the disposal of the common property.
This post appears in the October 2020 edition of The WA Strata Magazine.
Question: One lot owner wishes to create a by-law that exempts them from levies that are used to maintain our common driveway. Not all lot owners agree.
I live in a 5 Unit Strata. This consists of an original house at the front with 4 Units behind. The units have access via a common driveway that the front house does not use.
The owners of the front house wish to create a by-law that exempts them from levies that are used to maintain the driveway used by the units.
One other owner and I have opposed this by-law as we believe that we all were aware of the conditions when we bought into the strata. This by-law will impose a monetary liability on me and also changes my basic rights as an owner.
All levies at the moment are based on unit entitlement.
Two of us recently opposed this new by-law and the other owners have said that they are going to take the matter to the State Administrative Tribunal to have the matter resolved in their favour.
I would much appreciate your thoughts on this matter.
Answer: The Act does allow for the strata company to create by-laws that determine the basis for levying contributions
The Strata Titles Act 1985 (WA) does allow for the strata company (the owners of the strata scheme) to create by-laws that determine the basis for levying contributions as follows:
- By‑laws made by a strata company under section 42 may provide for a method of assessing contributions to be levied on proprietors under section 36 otherwise than in proportion to the unit entitlement of their respective lots.
- Such a by‑law may relate to contributions to all of the expenses of the strata company or to one or more particular kinds of expenses.
This provision is often used in cases where certain lots do not benefit from or do not have access to areas of the common property. For example, ground floor units that do not have access to or a need to use the lift in a building may be excluded from contributing to expenses related to that lift.
Therefore, the strata company does have the power to implement a by-law that alters the basis for levying contributions on proprietors if the by-law is approved by the strata company at a general meeting by the appropriate resolution. Based on what you’ve advised, two of the four proprietors have voted against the motion and the resolution has consequently failed, meaning the by-law has not been approved and cannot be registered.
Unfortunately, we are unable to advise you on what the outcome of an application to the State Administrative Tribunal (SAT) may be. We, therefore, suggest seeking advice from a qualified legal practitioner as to what the possible outcomes may be and the process that will be followed by the SAT from the time the application is made.
Strata Community Association WA (SCA WA) is the peak industry body representing people who own and work with strata property in Western Australia by providing education and advocacy. Our members consist of strata lot owners, council of owners’ members, professional Strata Managers and associated service providers. Strata is a complex area of the property industry and it can be difficult to navigate without having access to professional assistance. To support our members, we offer a member-only Advice Line that provides general advice, information and guidance. Join SCA WA today from only $60* per annum to gain access to the Advice Line and other member benefits. Contact us to find out more!
Please note this advice was provided prior to the proclamation of the new strata title amendments and will be updated in due course.
Disclaimer: The above information is provided solely for general information purposes and should not be taken as constituting legal advice or advice that is specific to your particular circumstances. You may consider seeking independent legal advice to see if the information provided relates to your circumstances.
This post appears in Strata News #213.
Have a question about contributing to common property you do not use in WA or something to add to the article? Leave a comment below.
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