Tuesday, April 21, 2009

All Levies are equal but some are more equal than others......

I can't help but think of the words of George Orwell when the subject of equalisation of levies is raised. This refers to the view that all unit owners should pay the same or a similar amount in levies irrespective of the type of apartment that they live in.

Traditionally, and with no relation to logic, owners have paid levies that can be variously dependent on the size of their unit, the number of bedrooms or the floor of their apartment.

It is possible that the owner of a penthouse could easily be paying double the levies of an owner on a lower floor, despite the fact that the levies for both owners are supposedly set in place simply to contribute to maintenance and upkeep of the common property.

Generally speaking, the higher the floor and the greater the size of the unit, the higher the levies.
Some owners felt this "system" was unfair and a series of disputes have been lodged in recent years. The theory was that levies were based on the maintenance of the common property and had no relation to the size of the units or the number of bedrooms. If you owned the penthouse, you paid substantially higher levies than someone on the floor below but both owners were supposedly contributing to the common property so why should one owner pay more than antoher. Of course, the owners in the ground floor units argue that they have no use for the elevators so why should they have to pay for their maintenance.

There are some exceptions but rulings of Specialist Adjudicators have often favoured an equalistation of the levies, providing a good case is made.

Gary Bugden, a Specialist Adjudicator in one case, told me that he was reluctant to change the structure of levies unless presented with the report of an expert. These are easy enough to obtain. The report needs to jusify that all of the apartments should contribute equally to the Body Corporate irrespective of size.

This is not always an easy task. There are often variables that can mean one unit owner should, in fact, contribute more than another. An expert report can indicate that the contribution schedule needs to be changed but it is not necessarily a given that all reports will favour equal contributions.

The rulings of Adjudicators are supposedly based on an interpretation of Law and The Act.

A recent report indicated that State Tourism Minister Peter Lawlor has pledged to get rid of what he describes as 'unfair' body corporate laws. Good luck to him!

"It's completely unfair," he said, when referring to the equalisation of levies.

That's interesting. Is he saying that the judgements of the Specialist Adjudicators are wrong?

It is true that in some buildings the levy contributions have been challenged. Owners who purchased units on lower floors have found that they have had to pay significant increases while owners of penthouses have had their contributions slashed.

The reason for this is that the levy contributions in these complexes were often inequitable in the first place. Often, they were set by a Developer more through guesswork than any form of logic.

Frankly, I dont see that Mr Lawlor will have much success in changing the laws. The system needs to be based on logic not on the fact that some people would like to pay less than others simply because the market value of their apartments is lower.

Minister to act on unit laws

Regards to all



I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.

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