The Benefit Principle Explained
The benefit principle is simple in premise; when levying for ‘extraordinary items of expenditure’ that do not benefit all owners equally, the owner that benefits more, should pay more. In application, things aren’t quite so simple. What is the ‘benefit principle’? The benefit principle first appears in Section 24, subsection 2(A) of the Owners Corporations Act, which states: “Fees and charges for extraordinary items of expenditure relating to repairs, maintenance or other works that are carried out wholly or substantially for the benefit of some or one, but not all, of the lots affected by the owners corporation must be levied on the basis that the lot owner of the lot that benefits more pays more.” Similar wording also appears in Section 49: Cost of repairs, maintenance or other works and Section 53: Upgrading of common property so it is a well-established principle within owners corporation regulations. Where things get tricky is that the Act does not set out criteria ...