Converting private garden in Strata to Exclusive Use or On Title?

Discussion in 'Legal Issues' started by lynchy, 29th Jan, 2019.

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  1. lynchy

    lynchy Well-Known Member

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    Hi all,

    I'm about to purchase a ground floor unit that has access to a private garden. The garden is completely fenced and the only access if from my unit. There is no access to any other unit or in to the building and no other unit would require or want access to the garden.

    The strata has suggested a payment of $30,000 to $50,000 for the conversion to exclusive use.

    I'm wondering what the process is for the conversion in a legal sense and the likely costs to do so? I'm also wondering if I should push for the garden to be on title rather than exclusive use which I imagine is going to cost significantly more?

    Thanks for any assistance!
     

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  2. Propertunity

    Propertunity Well-Known Member

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    On title is really difficult and expensive as there needs to be agreement by owners (unit holders) to sell the common property to you, changes to strata plan, more strata fees for you every qtr, CGT considerations, etc.
    Exclusive use still requires agreement but may only require creation of a bylaw.
    Status quo still gives you exclusive use (in a practical sense) and costs nothing.

    Your solicitor handling the purchase and conveyancing would be in the best position to advise.
     
    bmc likes this.
  3. Marg4000

    Marg4000 Well-Known Member

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    Doubt you will be able to get it on title. If so, even $50K is probably a good deal.

    Easier would be an exclusive use lease. Hubby’s parents negotiated this on outdoor space beside their unit. Draw up a proper legal lease for a fixed payment per year, 99 years and have it worded so the next buyers gets the leased area too.

    While you apparently have exclusive use of the area already, if it is common property you cannot legally prevent other unit owners having a picnic on the lawn, so an exclusive lease would be worth the cost!
    Marg
     
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  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    How old is the building ? If its an existing access why change what was an implied right of access and occupancy. Sure its not exclusive rights. Do nothing perhaps ? Its not like they can fence off your access without affecting your rights. And if they remove the existing fencing its affects your rights too. Its like someone wants you to pay for something that is already yours in function.

    I would seek legal advice before discussion as you may already have rights to use of that land. The issue could open a can of worms for all owners of course.
     
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  5. lynchy

    lynchy Well-Known Member

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    Its a 1970s building. The strata is well aware of the issue.

    The owners have had difficulty selling the property because of this very issue. As a law (i think) in NSW, pets on common property are required to be supervised at all times. Given the nature of the property having a large garden, 90% of the interested parties were those with pets.

    At the last EGM, the strata advised they would allow exclusive use for a $30k payment to the capital works fund.
     
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    What are they going to do ? Its common property that has no capacity to be used in a common manner. The sliding door to the living / dining and the path says it all. I wonder if your strata % already incorporates this space in the lot allocations so they want to double charge it after almost 50 years ? They cant remove your existing rights either.

    What would a valuation show if you had no external use ? I bet its lower... $30K ? More ? You may find the present value includes implied use of the area in any event and wont raise value one cent. The issue of who has maintained this area will also affect the issue. Former owner of the lot or strata ?

    The strata chairperson is probably miffed you have something nobody else has and wants to be a dick about it after all these years. Its like the wide carpark in most stratas. There is always one person who cant let it go.

    I would be exploring what the registered plan is and know your legal options either way
     
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  7. bmc

    bmc Well-Known Member

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    @lynchy
     
  8. wylie

    wylie Moderator Staff Member

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    Are you paying more than an equivalent unit in the same complex because of this added bonus?
     
  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Yeah I wonder if the strata allotments were decided 50 years ago based on this in which case it being paid in levies.Unsure what old laws were. Current law appears a strata % can only include internal property. ie a structural surface. All external areas are considered common and excluded ...(NSW) Back then however who knows.
     
  10. bmc

    bmc Well-Known Member

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    looks very similar to an ex Housing Department unit development in Birchgrove (Syd), that was sold off a many years ago. The site was full of inaccessible common property areas, that only benefited (and accessible by) the unit directly adjoining. Didn't matter when it was occupied by the Houso's. Exclusive Use By-Laws became common to clarify future use and maintenance.