Breakdown of outgoings (MP3)

[K4000]

Hi guys,

I am self managing a strata property which is mixed use.
It has come to the stage for me to issue the breakdown of outgoings.

The property is a mix of 3 commercial and a residential-mixed purpose.
I would prefer the outgoings to be broken up via value of the property rather than floor space due to it being an MP3 buidling.

When valuing the property for this purpose may I use a commercial and a residential real estate agent to find a figure, or should I use an independent valuer. I'm also slightly aware that the building is the be valued every couple of years in QLD but can't find this written on any body corp legislation.
I will have another read through the website later though.

 

[Scott No Mates]

Hi K4000,

your preference for the breakup of outgoings has no basis that can be argued (other than not being able to charge the residential tenant for much of the outgoings).

Commercial tenants pay their outgoings based on the NLA or GLA of the space that they have leased. The lease will dictate which outgoings are recoverable and should also note the %

(What is an MP3 building - does it have a doof doof?)

 

[SB25]

To the OP - are you referring to the underlying land being of MP3 zoning (assume it's in Brisbane?)

 

[Scott No Mates]

To add to my previous comments:

Tenants do not care about the value of the building that they lease, why would they want to know that you are getting a 15% return on their space?

As for valuations of strata space - as far as I know, it is not mandated that you have to value the premises every few years (unless you are a listed property trust or government body). The valuation is for your own purposes ie insurable/replacement value so that you are adequately insured, market value/mortgage purposes to extend your borrowing capacity.

Some commercial leases do not allow the cost of valuations to be included in the outgoings, retail leases also preclude several types of outgoings eg capital works.

 

[Peterw]

Why and to whom?

To say that:-

"I would prefer the outgoings to be broken up via value of the property rather than floor space due to it being an MP3 building."

Again, with what outcome in mind? If it is for your own .... say thinking I get this return from this property. Then fine. However if you are doing it with the view of charging someone, well that’s a different matter. Only the leases will tell you who you can and/or cannot charge outgoings too. I am referring to the commercial leases. You cannot claim outgoings (I say that with limitation in regards to water) from residential tenants.

In regards to valuation, I am reading that the property may be held in a super fund. Yes I believe they require regular updates on value, and again I believe a suitably qualified agents opinion would suffice.

I do believe that you would be assisted by getting some advice. Not knowing the full circumstances however it there are beneficiaries etc a mistake could cause you grief, That’s why I say get advice.

 

[K4000]

@Scott
Okay that clears things up for me. I was actually suggested by an accountant that the outgoings should not be based on the NLA but rather the value of each individual strata because of the amount of doofdoofs in the property. But I'll have to review the lease. Cheers,

@SB25
Yep!!

@Peter
Okay thanks for your words, I'll refer to the lease and check out the QLD GOV body corporate and mangagement website.