Unit Entitlement (UE) is a crucial concept in the realm of strata schemes, playing a significant role in determining the financial contributions and voting rights of individual owners within a strata development. This concept revolves around the notion that not all units or lots in a strata scheme are created equal. Here's a comprehensive breakdown of what Unit Entitlement entails:
1. Defining Unit Entitlement:
Unit Entitlement represents the proportional value assigned to each individual lot or unit within a strata scheme.
It serves as the basis for calculating levies, including strata levies, capital works levies, and special levies, as well as determining voting rights.
2. Allocation of Unit Entitlement:
The developer or original owner of a strata scheme, usually with the help of a quantity surveyor, initially assigns Unit Entitlement during the registration of the strata plan.
The allocation is typically based on various factors such as the size, location, and features of each lot. Larger or more strategically positioned lots may have a higher Unit Entitlement.
3. Financial Implications:
Owners with a higher Unit Entitlement generally contribute more to the overall levies of the strata scheme.
This ensures that those with more substantial interests in the scheme bear a proportionate share of the financial responsibilities.
4. Voting Rights:
Unit Entitlement also influences the voting power of owners in key strata decisions.
Owners with a higher Unit Entitlement often have more significant voting rights, aligning with their greater financial stake in the strata scheme.
5. Changes in Unit Entitlement:
Changes to Unit Entitlement are possible but typically require the passing of a special resolution at a general meeting. Depending on the size and complexity of the scheme, it can be a complex and expensive process that typically involves legal and surveying professionals.
Alterations might be prompted by modifications to lot sizes, amalgamation of lots, or other changes in the strata scheme.
6. Ensuring Fairness and Equity:
The Unit Entitlement system aims to establish a fair and equitable distribution of financial obligations and decision-making influence among strata owners.
It reflects the relative value and significance of each lot in the overall scheme.
Understanding Unit Entitlement is pivotal for strata owners as it forms the basis for their financial commitments and participation in the governance of the strata scheme. If you have questions or need assistance navigating the complexities of Unit Entitlement, Compass Strata stands ready to provide expert guidance and support. Reach out to us today for effective strata management.
