Buy out gardener's toilet from Body Corp to include into our lot

Discussion in 'Renovation & Home Improvement' started by Unicorn2020, 17th May, 2020.

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  1. Unicorn2020

    Unicorn2020 Member

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    Hello everyone,
    I am one of those long time no see Somersofters who were reading PC from time to time as life has changed and priorities moved.

    Now it is time to sort out our property portfolio and one of the units we own has an inconvenient feature.
    It is one of 4 units on the block built back in 60s and there is a free-standing gardener's toilet right next to the main bedroom window. It is a simple brick wall on the concrete slab 2m tall building approx. 2 sq m that is sitting behind our carport and if we can buy it out from the body corp and add to the title it will increase our backyard significantly. There are pathways around it as well, so overall we would need to buy approx. 10 sq m. Mostly this toilet is just an eyesore and is used just by our tenants to store stuff, nobody else is using it. At the time of buying this unit the price was very good and it has went up over the last 10 years significantly as it is located in one of leafy Melbourne suburbs.
    Question: how to buy out a piece of parcel from the body corp? Our BC rep is not super helpful, she is nearly retired and doesn't want to deal with it IMO.
     
  2. turk

    turk Well-Known Member

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    Buying the WC can be complicated and become expensive, look to obtain a lease in perpetuity over the land.

    This can be done by voting on a resolution at the AGM.

    Owners Corporation update: Leases and licences – Which, when and why? | KCL Law — Lawyers and Advisers
     
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  3. bunkai

    bunkai Well-Known Member

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    In principle, if I was another owner you should pay the owns corporation the increased valuation on your property. I think this is legislated in some states but you may negotiate something better.
     
  4. Unicorn2020

    Unicorn2020 Member

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    Thank you for the answers.
    To be clear I want to include this parcel of land into our lot to be able to demolish this ugly WC and do some decent landscaping. The whole point is to get rid of it.

    My thinking so far was:
    - get land surveyed to define the area to be bought out ( figure 1)
    - get the price of the land square meter from the council rates notice (figure 2)
    - multiply fig. 1 by fig. 2 and offer to pay this to BC
    - get the title adjusted
    - plug the hole and demolish the thing
    - do the landscaping and let tenants enjoy it

    Is there anything missed and to be considered? Has anyone ever done anything similar like including the carpark on the title for example?
     
  5. bmc

    bmc Well-Known Member

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    exclusive use of common property means you can use the space but you can't alter or destroy it. (typically)

    Subdividing common property and reconfiguring the lots would be a new Strata Subdivision in NSW.
    - Valuation and Unit Entitlement schedule from a Licensed Valuer.
    - Approval by Owners Corp
    - DA application
    - Stamp Duty
    - Signatures required from any Mortgagees - owners corp
    - Dept Lands lodgement fees

    have you spoken to a Vic Land Surveyor ?
     
  6. Tom Rivera

    Tom Rivera Property Manager Business Member

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    Can you convince the committee to agree to demolish the toilet and let you landscape the area? You wouldn't have exclusive use, but it seems to fulfil your objectives without all the extra drama?
     
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  7. Pumpkin

    Pumpkin Well-Known Member

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    I am intrigued.... Can you share a Layout Plan of the whole Complex showing your Rooms and the Toilet?
     
  8. Beano

    Beano Well-Known Member

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    Where will the gardeners go to spend a penny if you demolish his toilet ?
     
  9. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    It can be quite expensive to buy a portion of the common area. This occurs with car parking etc all the time and people can be stunned by the cost.

    First the strata will need to understand the value of the area involved. They will need to engage consultants to determine the existing common area % vs each lot entitlement. Then they need to add GST in most cases. And their legal costs. And then the strata will need to submit plans for the changed entitlements - Its never simple. This can be very costly and many SPs wont have all the lot drawings and area calcs so must do it from scratch and then lodge this with the state Govt. Then all the process Tom indicates follows.

    Now you will need to pay for all of that. Plus your own legals, plus duty and so on. And then....You will need council approvals to demo a loo and that will involve capping services like electricity, sewer and fresh water. Fencing the area of course. etc. It may be refused if you cant access the area from your entitlement. Not always.

    I have heard so many people think they are saving the SP and in reality it will be a pain in their arse for little to no benefit unless all the other owners think they are doing better from this than you are. Ahhhh. But they get nothing ? Think that one through. The other owners will veto it because they get nothing from it. So to sweeten it you will need to overpay and give them a benefit of some sort. Or the Strata will need to share the proceeds with them and thats not a simple legal matter. Often its easier of the SP uses the $$$ on other capital works that help those owners eg repaint, retile etc. And you pay your share on top....More cost.

    These plans often work better if you are buying the loo, carpark etc from another owner not a part of common area. The entitlement isssue still occurs but is a little easier and doesnt involve all other owners saying no. I was just involved with one for a few carparking spots from one owner to another. Took 9 months and $21,000 of costs on top of the agreed $75K for the carparking (3 spots). And no loans were involved. But each bank (vendor + buyer) had to become involved since the title changed. The vendors bank scratched their heads and for a while wanted the $75K repaid to them. But after some time agreed to just keep $23K as a loan reduction.
     
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  10. Unicorn2020

    Unicorn2020 Member

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    Thank you for the opinions and advises. I have spoken to the surveyors and yes, it is not just our lot to be modified but all of them as common property entitlement changes, which will be pain in the bottom.
    Probably the easiest way is to try to talk them into the demolishing without buying out. Could cost something as well as two owners out of 4 are non-residents living overseas somewhere. I guess we would need to offer some sweetener here.
    For all those interested please find a quick hand sketch attached.
     

    Attached Files:

  11. Marg4000

    Marg4000 Well-Known Member

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    Clearly, you will be expected to pay the demolishing costs.
    It is of no benefit to other owners so you can’t expect them (or the BC) to pay.
     
  12. The Y-man

    The Y-man Moderator Staff Member

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    You could bring up something along the lines of demolition will result in lower maintenance/repair costs down the track (if it leaks etc), avoid insurance issues (if someone drown in the loo) etc (does the common property insurance even cover the loo at present??)

    The Y-man
     
  13. Unicorn2020

    Unicorn2020 Member

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    To be clear - we pay for demolition by default, it wouldn't even come across my mind to ask the BC to pay for it. What I meant here that we would need to offer some reimbursement to the BC as we will be using up common property to make our own lot to look nicer.
     
  14. Marg4000

    Marg4000 Well-Known Member

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    If you want exclusive use of part of the common area, if allowed you will clearly have to pay something for it.

    You will need agreement from ALL other owners.