Sectional Titles

Paddocks Press – February 08

In Do schemes need emergency generators? Professor Paddock considers a number of issues which the installation of generators in sectional title schemes has raised. These include:

  • Legislative prohibitions or restrictions on the installation and operation of generators in sections.
  • The application of management or conduct rules in this regard.
  • The raising of a special levy.
  • The size of a generator - if small it could be seen as movable, if big enough it could be seen as being "an improvement to the common property" and therefore its purchase will probably have to be approved by a special resolution.
  • Placing - noise, disturbance.
  • Problems with occupants who want private generators.
  • Installation issues.

Clint Riddin then looks at Understanding the accounting treatment of the purchase of a generator by a sectional title body corporate. Issues to be considered here include the funding of the purchase and running of a generator. He recommends treating the purchase of the generator as a purchase on the income statement on acquisition rather than by capitalising it.

Brian Addison takes An insurance perspective on generators in the sectional title environment. For instance, the owner of the generator must ensure it (private or body corporate). Other issues include installation, building and safety regulations and the use of disclaimer boards.

Finally Prof Paddock asks Is a scheme generator a 'luxurious' or a 'non-luxurious' improvement? Here the principles of either Prescribed Management Rule 33 or Section 38(c) of the Sectional Titles Act will have to be considered to see which will apply under the circumstances.

Paddocks Press Vol 3, Issue 1

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