Question: Some lot owners have requested a motion that the lot entitlements be updated. Can all costs incurred for the amending of the entitlements be payable by the owners requesting the amendments?
We are holding a special meeting this week and some of the lot owners have requested a motion that the lot entitlements be updated. I have informed our strata manager that I will want to move a motion amending the motion that has been put forward to the effect that all costs incurred for the amending of the entitlements be payable by the owners requesting the amendments.
I have been informed that if the motion is approved by special resolution by the correct majority, the Owners Corporation are liable to pay for the costs. Is this correct?
Answer: You cannot make the select “applicant” lot owners the only liable parties. In certain circumstances, costs can be sought from the original owner.
An application for reallocation of unit entitlements is made pursuant to Section 236 of the Strata Schemes Management Act, 2015 (NSW) and may be made (among others) by an owner, owners or owners corporation.
Such an application does not require a special resolution – only an ordinary (majority) resolution is required.
We suspect the reason why there is a group applying for a re-allocation through the Owners Corporation as the applicant, is that all the other lots owners and owners corporation may be affected by any re-allocation – therefore, the Owners Corporation and all constituent owners should be the applicants.
If the Owners Corporation is the applicant, it automatically bears the costs of the application, the valuation and other legal and other experts’ costs, in which case, you cannot make the select “applicant” lot owners the only liable parties. In certain circumstances, costs can be sought from the original owner.
So while we disagree that a special resolution is required, we do agree that the Owners Corporation will bear all the costs, such costs to be borne by each and every owner in proportion to their unit entitlements.
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