THE VALUATION OF SHARE VALUES IN STRATA TITLE PROPERTY

Abstract

Strata Title is hailed as a breakthrough in the field of ownership of air space. However, the main obstacle to the widespread use of strata title for all classes of development is the difficulty of equitable allotment of share values to each strata value of the strata-subdivided property. There is no universally accepted manner of determining the number of shares to each strata unit and the Land Titles (Strata) Act is silent on the proper method of allotment of share units. Fundamentally, the basis of allotment is an issue of equity striking a compromise between the conflicting objectives of maximum co-ownership and minimum contribution of each subsidiary proprietor in the Management Corporation. This study will attempt to ferret out the principles of equitable allotment of share values by examining and analysing various possible methods of valuation. Recommendations are forwarded with regard to the legal framework, design, finance, maintenance and management as well as the "Pay-as-you-use" Scheme for the future improvement of strata subdivision, especially in respect of the allotment of share value.