Question: Can strata funds be used to pay for a revaluation of unit entitlements if not all owners agree?
A group of owners holding the majority vote wants to engage a valuer using strata funds to revise unit entitlements for all owners in an attempt to reduce their strata fees. The vote to change unit entitlements has not been taken, but we know it will not pass without about 15% dissent. Can strata funds be used to pay for a revaluation when not all owners agree?
Answer: A licensed valuer sets unit entitlements, and the strata company may approve the valuation cost by ordinary resolution or through the council of owners.
The unit entitlement (UE) of the lots in a strata or survey strata scheme is set in accordance with section 37 of the Strata Titles Act 1985 (STA1985). The UE of schemes created since 1985 is set by a licensed valuer. The valuer sets the values by determining the capital value of the lot in proportion to the total value of the lots in the scheme (aggregate of unit entitlement). Capital value is used for a strata scheme, and site value is used for a survey strata scheme.
Your question relates to the resetting of the UE, and particularly the cost of the valuer. The approval of the valuer’s cost ultimately depends on expenditure approval. If the expenditure is presented as part of the strata company’s budget or budget amendment, it would be an ordinary resolution (passed by more than 50% of the lots or by more than 50% of the unit entitlement) to approve this expenditure. The council could probably approve this expenditure of owners under section 102(6)(a), given the cost is likely low enough for this to occur.
I understand that the point raised is “why spend the money if the change to the UE is not likely to pass”. The strata company may intend to seek to have the resolution passed via the State Administrative Tribunal, should the motion fail to pass via Resolution Without Dissent at a general meeting of the strata company.
The value of the UE is set by a licensed valuer. It is important to remember that the UE will not change simply because a lot owner or group of lot owners wants the UE to change. A variance in proportionate value would need to exist for the UE to be changed. If this does exist, I believe the UE should be reset accordingly.
This post appears in the September 2025 edition of The WA Strata Magazine.
Luke Downie Realmark E: ldownie@realmark.com.au P: 08 9328 0999