Strata

Strata Scheme Insurance Valuations

Coffs Coast Valuations specialise in Building Insurance Valuations for Strata Property. We provide Insurance Valuations for residential, commercial and industrial Strata Schemes.

The NSW Strata Schemes Management Act 2015 (Part 9) and the NSW Strata Schemes Management Regulation 2016 (Part 6) set out the insurance requirements for Strata Schemes in NSW. Coffs Coast Valuations can provide the Owners Corporation with an accurate and professional Insurance Valuation report, assessing current replacement costs and other variables that are relevant to each situation.

It is recommended that an Insurance Valuation be carried out at least every three years as a preferred risk management strategy. Cost reviews can be made in terms of inflation, the cost effect of new legislation and any other relevant issues that may affect the insurance value. Recent price movements in the building industry have varied dramatically from the inflation rate and under-insurance is a real risk.

Changing Unit Entitlements

Unit Entitlements are critical in that they establish the owners proportion of levy contributions, voting rights and beneficial interest in the common property. The financial consequences for owners can be significant if the unit entitlements are not correct. Until recently, many unit entitlements were determined by the developer using inaccurate methods and a major proportion of these are unreasonable and offer sufficient grounds for review.

An individual owner and/or an Owners Corporation can lodge an application for a review to change unit entitlements at any time. Where unit entitlements of a Strata Scheme are considered unreasonable section 236 of the NSW Strata Schemes Management Act 2015 provides a mechanism for a re-allocation. The main steps in the process to seeking a change in unit entitlements are as follows:

• Obtain a Valuation report which sets out the correct unit entitlements for each lot as at the date of registration of the Strata Plan.
• Provide a copy of the report to the Owners Corporation for consideration. An application for a review of Unit Entitlements can be lodged by individuals however the Owners Corporation should be involved in the process.
• Prepare and lodge the application forms with the Civil and Administrative Tribunal for review.
• Submit the successful Order and related forms to the Registrar Generals Office for registration of the new unit entitlements.

An experienced Strata Manager can assist in the above process and they should ensure that the cost of the Valuation is shared between all owners.

The primary factor for consideration by the Tribunal in determining if a change is warranted is the Market Value of the individual lots at the time of registration of the Strata Plan. Coffs Coast Valuations have qualified and experienced Valuers to provide this type of Valuation. If you believe that your unit entitlements are unreasonable, contact us for free advice on whether the matter should be reviewed.