The timeline below summarises relevant legislative and industry changes affecting strata stakeholders in the Tasmania. It includes helpful links and further reading to help you understand TAS legislative changes.
Changing unit entitlements is a fundamental decision requiring a unanimous meeting resolution to alter or reallocate the shared ownership of the property.
Unit entitlements are an important aspect that determines an owner’s legal rights and responsibilities. It represents the proportion of ownership within a body corporate property, such as common spaces like barbecue areas, swimming pools or shared facilities.
Unit or lot entitlements are calculated based on the lot’s estimated market value. Generally, owners with larger lots may hold higher levies, voting rights and common area ownership.
A range of factors, such as the age, condition, common property facilities, design, onsite contractor services, insurance costs, financial status, the size of your lot, or any major changes to the property, can influence the allocation of shared body corporate ownership.
Historically, unit entitlements were calculated by developers during the initial construction of the property. However, these estimates may become inaccurate from when it was registered due to significant changes with the property or market landscape over time. An independent property valuer can help obtain up-to-date assessments to improve the accuracy and credibility of unit entitlement valuation reports.
A valuer estimates these entitlements based on the ‘improved capital value’ of the development. Larger units or those with superior amenities typically have a larger unit entitlement. These entitlements are significant for voting on special resolutions and can affect the contributions of levies and fees. Furthermore, an undervalued unit can decrease voting rights, and an overvalued unit can lead to overpaying levies and fees. Therefore, obtaining an accurate unit valuation can help maintain a fair and balanced distribution of rights and responsibilities within a body corporate.
Meeting resolutions play an essential role in making crucial decisions within a body corporate. One such critical decision is altering or reallocating unit entitlements, which may impact an owner’s rights and responsibilities.
Changing unit entitlements can be passed by:
• A unanimous body corporate meeting resolution with no votes cast against the motion.
• An order of the Recorder of Titles under Part 9 of the Act.
• Requested by the impacted lot owners, given the total unit entitlements of the lots subject to the change are unaltered, and the consent of any registered mortgagees and lessees of the lot has been received.
Click the link below to learn more about the legislation around changing unit entitlements within your body corporate, click the link below.
