Exchange parking bay for credit on levies

This is a variation on a previous Question of the week. One of the owners have a parking bay and is in arrears with his levies. The Trustees want to know if they can “buy” the bay from the owner by crediting his levy account with an amount relevant to the value of the parking bay.

First of all we will have to check the status of the parking bay. 

If it is a section then the Body Corporate can definitely buy it from the owner.  They just need to get a special resolution passed by the owners first.  And will have to convince the owners that it is “essential for the proper fulfilment of the duties” of the Body Corporate.

Section 4. The body corporate may exercise the powers conferred upon it by or under this Act or the rules, and such powers include the power—

  • when essential for the proper fulfilment of its duties and upon special resolution, to purchase or otherwise acquire, take transfer of, mortgage, sell, give transfer of or hire or let units;

If the parking bay is straight forward common property then this owner cannot say that he owns a parking bay – he could possibly be renting it from the Body Corporate and then there is no monetary value that can be credited to his levy account.

If the parking bay is an exclusive use area (EUA) we need to check the plans and the rules to see what type of EUA it is.

If it is an EUA ito the rules then the rights cannot be sold and there is therefore no monetary value that can be credited on his levy account.

It is only if the parking bay is an EUA ito the plans that it can be sold (as per our previous Question of the week).  In such an instance the Body Corporate will have to pass two resolutions:

  • A special resolution for the EUA ito plans to be cancelled as the BC cannot hold the rights to an EUA and it will now become part of the common property again
  • An ordinary resolution for the Budget to be amended to include the expense of buying the parking bay from the owner – even if it is just a book entry by way of crediting his levy account