This article discusses how to challenge unfair water billing in a WA strata scheme, including raising a motion at a general meeting and applying to SAT if the charges are not reasonable.
Question: Can a strata scheme split water charges equally when usage differs between lots?
Our strata scheme has six lots. Two lots are small townhouses with no gardens, and four lots are large townhouses with gardens. We have individual water meters as well as a main meter installed by the builder.
Our strata manager divides the main meter reading equally by six, which reduces the share paid by the higher water users. We’ve complained, but the strata manager says that the majority vote wins. Can schemes charge water this way? Can the disadvantaged two lot owners challenge or change the process?
Answer: If one or more lot owners believe the adopted billing method is unfair or inequitable, the first step is to raise a motion at an Annual General Meeting for consideration and a vote.
In a strata scheme, any levy or charge applied to a lot must be calculated in accordance with Section 100 of Strata Titles Act 1985 (the Act), which is based on unit entitlements, unless there is a registered by-law that provides otherwise. For this reason, a review of your unit entitlements may indicate that this is how the water bill is currently being apportioned.
Where individual, functioning water meters are installed, it is possible for water usage to be read and billed on a user-pays basis. It is important to note, however, that there are additional costs associated with meter reading and billing, and in some cases, these costs may outweigh the benefits when compared with the current billing method adopted by the scheme.
While the scheme has both a main meter and individual meters, the method for allocating and billing water usage is not determined unilaterally by the strata manager. The format and process for billing water must be formally raised, considered, and voted on at a General Meeting (AGM). Once a resolution is passed, the strata manager must implement the billing method in accordance with that resolution.
The practice of dividing the main meter usage equally among six owners, despite materially different usage patterns and the presence of individual meters, does occur in some schemes. Whether this approach is just or equitable is a separate consideration and is frequently contested in similar circumstances. This method also means that individual lots are not directly accountable for their actual water usage, which can make leak detection more difficult.
If one or more lot owners believe the adopted billing method is unfair or inequitable, the first step is to raise a motion at an Annual General Meeting for consideration and a vote. If the motion does not pass, the appropriate course of action is to lodge an application with the SAT Tribunal. SAT has the authority to review the reasonableness of the billing method, consider the presence of individual meters, and issue orders when the allocation of costs is found to be unjust.
In summary:
- Charges must follow unit entitlements unless otherwise validly resolved.
- Owners may also consider the cost and viability of transferring the water meters under the Water Corporation’s control, which can be proposed as an option with potential long-term benefits.
- Majority preference alone does not automatically make a billing method fair or lawful.
- Owners who believe the method is inequitable may seek a determination through SAT.
Jamie Horner Empire Estate Agents E: JHorner@empireestateagents.com P: (08) 9262 0400
This post appears in Strata News #780.
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