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Commercial strata levy 5 x the residential strata levies in mixed use building

Discussion in 'Commercial Property' started by lynchy, 17th Nov, 2015.

  1. lynchy

    lynchy Well-Known Member

    Joined:
    15th Sep, 2015
    Posts:
    78
    Location:
    Perth, Melbourne, Sydney
    Hi,

    I have a hypothetical commercial property. It's ground floor, 100sqm, nothing special. The strata levies are $14,000pa, compared to the strata levies of the residential apartments which are $3,000pa. The owner of this commercial property has no additional voting right and has suggested at the last strata meeting that a consultant be engaged to investigate the high costs as nothing can be found in the original contract or any previous strata minutes. This however was voted against as the consultant costs were in excess of $15,000.

    Is it normal for the levies of a commercial property to be so much higher than the resi above? The developer had to gift this property to the original owner for the right to develop on the land and I feel that the high rates are to offset the cost borne by the developer having to gift the property.

    Any ideas?

    Do you think its worth the current owner investigating the possibility of having the strata levies reduced?
     
  2. Handyandy

    Handyandy Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    119
    Location:
    Sutherland
    Change of unit entitlements - Registrar General's Directions

    An order may be made by the NSW Civil and Administrative Tribunal (NCAT) to reallocate the unit entitlements of a scheme if at the time the plan was registered they were unreasonable or over time they became unreasonable. See section 183 Strata Schemes Management Act 1996.

    And........

    When preparing the valuation to determine the re-allocation it must be based on market values as at the registration date of the Strata Scheme or a subsequent registration date or when some significant change in the use of the building or one of its Lots occurred e.g. rezoning. However in most instances the date of the registration of the scheme is the most relevant.

    These valuations involve research of historic sales evidence to help determine values retrospectively, for consideration by the NSW Civil and Administrative Tribunal (NCAT). The valuation must initially establish that the existing Unit Entitlements are unreasonable as at the date of registration and do not reflect relative market values, a reasonable alternative table of values is then provided.

    As per ......

    Changing Unit Entitlements | Strata Insurance Valuations | Section 183

    I am in same situation where I pay substantially more along with my neighbour as we face the road but more pointedly the developer retained a unit which has minimal units of entitlement. Out of a total of 6 units neighbour and I have 48 units of entitlement. Each of these units are 500sqm with 2 other units around the side 1000sqm each.

    Let me know how you go as I will tackle this issue at some point.

    Cheers
     
    lynchy likes this.
  3. lynchy

    lynchy Well-Known Member

    Joined:
    15th Sep, 2015
    Posts:
    78
    Location:
    Perth, Melbourne, Sydney
    Thanks for that Handy Andy, I'll have a look tonight
     
  4. alicudi

    alicudi Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    47
    Location:
    Melbourne, Australia
    Hi

    Could the commercial premises be paying for extra things such as rubbish removal, public liability insurance over and above what a residential complex requires, common area lighting and other items required specifically for the commercial premises to operate?

    Regards,

    alicudi
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    Location:
    Sydney or NSW or Australia
    Are the commercial units in the same stratum or are there separate strata plans for the commercial and residential units. Council rates, water rates, insurances etc will be different.

    Why would you believe there would be additional voting rights if the basis for the levies is unrelated to the residential units?