In brief: A decision in a recent Supreme Court
case regarding 'lot liabilities' has significant
implications for Owners Corporation (OC) members,
OC managers and property developers.
What you need to know:
Lot liabilities for the purpose of OC fees can be altered if
the OC members unanimously agree that it is 'just and
equitable' to do so.
In assessing whether a lot liability is 'just and
equitable', lot owners and the OC need to carefully consider
what factors they take into account.
The requirement to maintain non-common property is not relevant
to lot entitlements and lot liability.
Non-common areas, such as a roof and deck which forms part of
one lot (as stated in the case below), should not be considered
when apportioning OC liability.
Recently in The Concept Developer Pty Ltd v Conroy &
Ors  VSC 464 it was held that a lot owner's
responsibility to maintain the roof was not relevant to the issue
of lot liability.
This Supreme Court case confirms that lot liabilities can be
altered and provides an example of what should not be taken into
consideration when apportioning lot liability.
It is not uncommon for owners to feel that they are paying a
disproportionate amount of the OC fees. In this case, which was an
appeal from VCAT, the Supreme Court had to consider what was
'just and equitable' for one lot owner and what factors
should be taken into account when altering the lot liabilities.
This matter concerned an apartment block in Richmond. In 2013,
some building consultants advised the OC that it should carry out
maintenance work to the value of $186,450 over the following years.
The issue then arose of the lot entitlements and payments of this
Some apartment owners felt that lot 12 was not paying a
proportional amount of the OC fees. Lot 12 encompassed part of the
roof, which it had to maintain as it was not common property.
Although it was the largest apartment, its proportion of the
liability to the OC was relatively small. The reason for this was
because of the necessity to maintain the roof.
The 'just and equitable' test
The Court had to assess whether VCAT correctly applied the
'just and equitable' test to the review of the lot
liabilities. VCAT found (and the Supreme Court upheld) that the
requirement to maintain non-common property, such as a roof, was
not a consideration to take into account in determining the lot
In this case lot 12 had exclusive use of the roof and had
installed a roof top deck. Therefore, it not only had the
obligation of maintaining the roof, it also enjoyed exclusive
rights to it. As such, VCAT altered the lot liabilities to reflect
'just and equitable' proportions for each apartment.
Factors in determining 'lot
Typically the following are examples of factors which are
considered when determining each lot's liability to the OC:
The size of each apartment.
The amenities it enjoys (such as a view).
The value of each lot.
In determining and reviewing lot liabilities, the requirement to
maintain non-common property should not be taken into account.
Case reference: The Concept
Developer Pty Ltd v Conroy & Ors  VSC 464
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.Madgwicks is a member
of Meritas, one of the world's largest law firm
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