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LOT LIABILITY

The schedule of lot liability and lot entitlement is part of every plan of subdivision. For more information about what a plan of subdivision is, who creates it, and when it is registered, click here.

The lot entitlement expresses the what the lot owner is responsible for, or liable for, in the owners corporation, and is used to calculate the percentage of fees allocated to each lot. This is for both ongoing annual fees, and for special levies.


Note: in the rare case where the ‘benefit principle’ is used, lot liability does not apply.

Once a plan of subdivision is registered, the schedule of lot liability and entitlement can only be amended by a Unanimous Resolution, where 100% of lot owners are all in agreement.

A lot liability and lot entitlement schedule could look like this, for a plan with four lots:

Lot Number

Liability

Entitlement

1

20

20

2

30

35

3

40

35

4

10

10

Total

100

100

The schedule of lot entitlement is discussed here. Let's look here only at the schedule of lot liability.

The lot liability shows the percentage of the total fees that everyone will pay. To find out how the fees for one unit of liability, divide the total fee (annual fee, or special levy fee) by the total units of lot liability.

In the above example, there are 100 units of lot liability. If the AGM resolves to raise $5,000 for the year, then the fee for unit of lot liability will be $50 (5,000/100=50).

Lot Number

Liability

Fees per unit of liability

Total fees

1

20

$50

$1,000

2

30

$50

$1,500

3

40

$50

$2,000

4

10

$50

$500

Total

100


$5,000

You can see that in this case, because the total lot liability is different for each lot, each lot has a different amount of fees to pay. Lot 3’s fees are four times higher than Lot 4’s. Perhaps this is because Lot 3 is significantly larger. When a building surveyor writes a plan of subdivision, they must justify the schedule of lot liability.


Your OC Manager cannot change the schedule of liability – this can only be done via a Unanimous Resolution, as it would be changing the Plan of Subdivision.

 

If you have any questions regarding your schedule of lot liability, please contact Melb OC.

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