Question: How can we best take advantage of solar produced electricity to contribute to the reserve fund without suffering from additional tax payable by the strata company?
Answer: Solar generation reduces (or supplements) the cost of electricity.
With the disclaimer that this is not accounting advice, solar generation reduces (or supplements) the cost of electricity, as a site does not need to purchase the volume of electricity generated onsite (by solar) from the grid.
Two scenarios apply:
- When solar electricity (i.e., all or a proportion thereof) is allocated to common areas usage, the common electricity charges are reduced for the scheme’s benefit as a saving if no charge is applied to the value of each kWh of solar electricity.
- Where a strata scheme is on selling electricity to occupants in accordance with regulatory tariffs (i.e., solar or grid electricity), it should derive an on-sell margin or profit that would flow into the revenue stream of the strata scheme as the lot owner is charged for the electricity at a tariff rate.
- From an accounting perspective, how the income is treated would be subject to site specifics and a question for the appointed accountant in accordance with tax law.
- Generally, where a profit is derived, it would be assumed the strata company will need to pay the relative tax.
We have plenty of information regarding this on our website:
This post appears in Strata News #683.
Damien Moran
EnergyTec
E: damien.moran@energy-tec.com.au
P: 08 9382 7700
I would like to know if the corporate body of the strata can refuse the installation of solar panels on my house? The house is free standing but part of a strata and the only issue I can see is that it will alter the outside appearance of the house and no other villas have solar panels.
I will of course seek first the approval from the other owners but I consider to proceed with the installation regardless of if they agree or not because it is not on common property.
Hi Angelika
Tristan Cockman, Justice Legal has responded to your question in the above article.
Hi!
Whilst we are on the topic of roofs I have a question re the roof space .Our strata development of 51 2 storey units,, separate units ground and first floor and built pre 1984 does not appear to have a boundary sefinition forr the roof on the strata plan. Is the roof space common property or part of the lot?
Hi Stephanie
Can you quote what it does say?
Often there will be “the stratum of the lots…… ” and mentions the internal surfaces or the centreline, walls only, or ceiling also or “including where covered.
1984 registered suggests the roof is all strata, so the ceiling may be the boundary.
It can be quite confusing, Landgate will sometimes assist, but I’ve found the Surveyor which signs off will often be willing to review and let you know what the intention was when it was built… call and speak to reception for a suitable contact email to write to,.. send a copy of the strata plan with your message and let them know you’re trying to work out what the intention was when it was built. Then wait patiently.
Good luck.
I sold out of strata because it was just too hard with dodgy strata managers and their so-called professional body who are mainly interested in making life easy for the strata managers who pay most of their income. I was lucky enough to find a strata consultant who gave me good advice but he didn’t want his name mentioned, probably because they depend on strata managers for referrals. I hope the amendments require strata managers to proactively give advice re the Act and hold them to account if they don’t.
thanks for your comments eM. no I won’t be doing all of that! However I am required under the STA to seek my neighbours permission. I am required to send my proposal in writing giving full details. As you might have guessed there are other issues with my neighbour going back over a number of years. We have a fencing issue, which remains unresolved…but I’m not going there!
Hi Roger
How incredibly frustrating! Has the neighbour indicated a reason for not wanting solar panels?
A tricky neighbour, I imagine, would object on principle to installation of air-conditioning (the evaporative type) which penetrates the roof, or re-roofing in a different style of tile or a different type of dividing fence and be making your quiet enjoyment difficult.
From a non-legal and purely practical view, my suggestion would be to compile – the installer’s brochures and specs for what you want, have a tech-savvy person make and print a visual perspective on how it will look, include the cost-effectiveness summary projected over a year (top document) with installation costs if both properties participate (the installer might give a small discount) further down the pile – then give the neighbour a copy with what you have chosen to do with a note asking them to tick the appropriate box if they are/are not interested in taking up the discount. Tricky can apply to more than one party. . .
1. 2006
2. No common property. Old 2 lot single tiered “built” strata …battle axe configuration. Roof line of front villa( my lot) is in alignment with boundary line between 2 lots.
3. yes I agree
4. I’ve heard of Mark Atkinson…too expensive for me I fear. But thanks anyway.
Thanks for your reply Nikki. (on behalf of Justice Legal) Well I have had legal advice on this particular issue and another from 2 very experienced Strata Lawyers and the WA Strata Titles Act (1985) is quite clear in the case of solar panels being sited on the roof of 1 dwelling in a 2 lot single tiered strata with no common ground. (the need for requiring approval) Specifically in 7(2) part (b) of the STA ” extension of, a structure” is the critical phrase….solar panels on the roof of a dwelling do represent a small extension of a structure(albeit small and vertical) …..a dwelling is clearly a structure and absent solar panels after being installed, must constitute an extension to it!!!!! QED. There is no need to examine whether or not solar panels are structures or whether or not they represent an alteration of a structural kind.
What disappoints me is that 2 lawyers practising in separate companies can look at a piece of legislation under the STA and come up with 2 diametrically opposite views. Now that suggests to me that there can be only 2 reasons for that . The first reason is that one of the lawyers is incompetent and the other, hopefully more likely reason, is that the piece of legislation is poorly written and/or imprecise. How can this be? Perhaps somebody might provide an answer to that one!
Thanks again Nikki.
it seems that my thoughts shared on 5 May 2019 are just 2 difficult to answer so I will answer it myself! The answer is that under the current STA of 1985 in Western Australia you do have to obtain permission from the other proprietor under 7(2) of this Act. That is because the siting of solar panels on a roof is inarguably an extension of a structure albeit a very small extension. The structure here is the building. Is there a good strata lawyer out there who can confirm this please!
Hi Roger
We have received the following reply from Tristan Cockman, Justice Legal:
Thank you for your comments. The other proprietor can refuse the proposal if, among other things, it “will result in a structure that is visible from outside the lot and that is not in keeping with the rest of the development”. Case-law then determines what is “not keeping with the rest of the development”. So, yes it would be a good idea to obtain the proprietor’s approval in writing beforehand to avoid a potential court case.
While we are conscious of the procedural difficulties that strata owners face when implementing improvements to their lots, I am sure you can appreciate that with the limited amount of information supplied to us, LookUpStrata and its contributors are not able to provide legal advice and we stress the importance of obtaining professional advice for your specific situation.
We continue to advocate for reforms to make it easier for strata owners to live in strata and are pleased that this will result in reforms to the Strata Titles Act 1985 (WA) in the near future.
Hi Roger
We’ve also heard from Shane White, Strata Title Consult:
There are some underlying questions that need to be known before an answer could be given:
1. How old is the strata scheme?
2. Is the roof Common Property as determined by the boundary definition on the strata plan?
3. As it’s a two-lot strata scheme, the consent of the other neighbour will be required.
4. Consult with Atkinson Legal on any further questions, I’m sure they will charge accordingly.
what happens on a 2 lot strata development with battle-axe configuration and no common property. (NOT A SURVEY STRATA) Owner of single storey front villa wants to put 12 solar panels on roof in his front villa. Other proprietor in the rear 2 storey house says “no Solar panels”….but probably has no grounds under 7(5) of the Act. Under section 7(2) 7(3) and 7B of the Strata Titles Act (1985) in West. Australia is the proprietor of the front villa required to put in a full formal written proposal to the other proprietor anticipating that it will be rejected……..because the neighbour is a “tricky” neighbour.And if it is rejected (unreasonably) can the front villa proprietor then either “put them up anyway” and wait for the other to take him to Court under section 103(G) of the Act (in breach of 7(2) ) OR institute Court action himself under 103(F) and hopefully have the Court dispense with the refusal to approve. Such Court action would be through the State Administrative Tribunal. My bet is that most people in a duplex situation like mine would just “put the panels up” and wait for the other party to take out Court proceedings….this could be a little risky! Anyone know what he correct straight bat to play here…Court Action is tiring, time consuming and one to be avoided if possible.