I got this question via another route. Initially I replied:
The first thing that occurs to me is to ask what exactly was passed at
the AGM:
Was it just an ordinary motion, from the floor, with no notice given to
members?
Was it notified to all owners as a motion on the agenda (IE that you had
a chance to see and respond to at the meeting)?
Was it decided as a ‘rule’ (aka by-law or article)?
If it was a new rule, was the motion passed as a ‘special resolution’ (a
higher standard is required to adopt a new rule-it has to have a majority
in favour and fewer than one third opposed of those present and entitled
to vote, in person and by proxy.
If it was a new rule, was the rule registered with the land titles
office?
Was the meeting a ‘reduced quorum’ meeting (fewer than 50%
represented)?
If it was a reduced quorum, were the decisions notified with the
required form within 7 days?In any case, this might be something to sort out via an ACAT dispute but
get the facts first.
The ACAT can give orders to overturn a decision or to modify a decision
or to substitutes its own.
It might, for example, decide that it was reasonable for the owners
corporation to decide to not allow further tenancy arrangements such as
yours but to add a ‘grandfathering’ clause that allows your unit to
continue to operate as it has until such time as you are no longer an
owner.The only other thing that occurs to me, about which I am unsure, is
whether the short-term leasing would have be illegal all along. I assume
that the unit is zoned as residential and that probably has a definition
that includes the length of time people spend in a unit. An issue that
might have concerned the OC is whether it would be required to comply with
the sorts of things that hotels have to have but don’t apply in standard
residential areas.
Then the original poster sent a copy of the minutes of the 2007 general meeting at which a rule (aka Bylaw/Article) banned this sort of short term letting in the complex. The original poster had been an owner since 2004. The special resolution to adopt the rule was notified to owners and then passed at the meeting. It all looked above board. Allowance was made to phase out the then-existing short term letting. Consequently I don’t think the poster has any recourse since they started the short-term letting well after the new rule came into effect. I then wrote:
Hi,
That all looks pretty water-tight to me. The motion was notified. The notice and minutes acknowledge
the difficulty for pre-existing short-leased apartments and a transition period is implied by the
comment under the resolution. As an owner from 2004 you would have received the notice of the 2007
meeting and the minutes of the meeting. Whether the correct form for a reduced quorum was used or
not, I doubt being pedantic about that would help. All the information required on the form is
contained on the first page of the minutes.
One could check whether the amendments to the Articles/Rules were registered. They should be to
have effect. As it happens, I know (one of the EC members) slightly and I doubt he would have failed to
ensure the Articles were registered. Even if they were not registered, they could be registered now and
they would become valid. If you had bought the unit more recently than 2007 and inspected the
registered articles at the time you might have some argument for fairness but even so you would not
be entitled to greater consideration than was given to those who were short-leasing in 2007 and that
was only a chance to phase out the practice with the help of the EC. As it is, you owned the unit in
2007 and would have had notice of the amendments to the Articles then.
Finally, as the newspaper article suggests, short-leasing is probably contrary to the lease conditions of
the overall property and you would also have a catch-all rule requiring that members of the owners
corporation comply with any legislation in force in the ACT. That would require the owners corporation
to comply with the lease conditions of the property (IE residential purposes, not short leases). Even
without the specific short-leasing rule, you would probably be caught out by the general rule on
compliance with legislation and the OC would be obliged to enforce it via the EC.I think it is all pretty clear now,
Sorry!
Peter.