Timing is Everything When Unit Entitlement’s Change
North East Developments Pty Limited v The Owners - Strata Plan No. 53374 [2007] NSWSC 1063
GoStrata’s CaseWatch is a short, sharp and easy-to-understand review of important and interesting Court and Tribunal decisions affecting Australian strata title stakeholders.
Quick Read
This 2007 decision by the NSW Supreme Court is about a dispute about when a Tribunal order changing unit entitlements takes effect in a Cremorne Point strata building and how it affects strata levy liabilities. The Tribunal ordered changes to unit entitlements to increase them for 2 strata lots but the strata building didn’t register the changes on the common property title for 6 months. In the meantime, the strata building raised new levies at the higher rates, the strata owner refused to pay them for the 6 month period, the strata building sued, and the Local Court ordered payment. So, the primary issue in this appeal to NSW Supreme Court was whether a Tribunal order to change strata unit entitlement had to be registered before it operated to change strata levy liabilities. After considering how strata law definitions and sections 78, 209 and 210 operated, the NSW Supreme Court decided that the unit entitlements [on which strata levies are allocated] do not change until a Tribunal order is registered on the common property title even if the order is otherwise effective under section 209. In other words, a strata owner can only be levied on the unit entitlements recorded on the common property title. The decision clarifies when Tribunal orders take effect generally and for strata levies. It’s also a reminder to act quickly to serve, record and, where necessary, register Tribunal orders. Plus, that strata levy liabilities will be checked carefully by Courts when challenged.
Implications
The key implications of this strata case are as follows.
Strata levies are payable in shares proportional to the unit entitlements of the strata lots under section 78(2).
Strata lot unit entitlements are as recorded on the schedule on the common property title under section 5.
Some Tribunal orders must be lodged and registered on the common property title under section 209.
Although a Tribunal order operates when issued under section 210 that is only for orders that do not need registration on title.