Don’t get caught out when trying to reassess utility or ownership interests in a unit titled property

A Body Corporate of a large unit titled complex found that at every meeting of the Body Corporate, some owners would complain that the owners of the units on the upper floor should be charged more in levies as there was a common area large deck area that mainly the owners of those units used.

The owners wondered if they could change the way they were levied.

Generally ownership interests are the same as utility interests unless they are reassessed.

There are three options for reassessing interests in a unit titled complex:

1. Reassessing ownership interests.  This changes how voting rights are carried out. Ownership interests are usually based on the size of the unit and the original percentage of the underlying land value of the unit (calculated by a valuer at the time the plan was first registered).  Ownership interests also determine how levies for the capital improvement fund, if any, are worked out; or
2. Reassessing utility interests.  This changes how levies are worked out (other than for the capital improvement fund); or
3. Reassessing both.

Generally a reassessment of utility interests relates to the use of the building.  For example, it may be felt that certain owners may use certain things more, like lifts.  

Reassessing ownership interests will involve a valuer.

In some cases, if there is an issue with measurements of the units on the original plan this might be a separate issue to a reassessment, and would need a surveyor instead.

With both types of reassessment the Body Corporate needs to follow the designated resolution procedure which involves a special resolution and allowing owners and other interested parties, like banks with mortgages on the title, to object within 28 days of the date of the resolution. 

Be careful to take legal advice if you are considering reassessing ownership and/or utility interests to make sure you fully understand the process.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.