I fielded a call on ABC radio last week when a very distressed listener called in. She lives in a ground floor apartment and the owners in the floors above her have announced that they plan to put balconies on their apartments.

Not only will she be overshadowed, but the construction of supporting walls will mean that she will lose part of her terrace and her view of the harbour.

The self-serving members of the committee have told her that she can’t prevent this – they have a majority of more than 75 per cent – and she will have to pay her share of their apartment-enhancing extensions.

She is up for a special levy running to tens of thousands of dollars for the pleasure of having her living area and amenity (and property value) seriously reduced. 

‘We have the majority we need to pass the by-laws,’ they’ve told her. ‘There’s nothing you can do about it.’

Just to hammer home their superiority, at their AGM they reduced the number of seats on their committee and voted the dissenter off.

I didn’t have time to go into it on air, but I reckon there are numerous reasons the upstairs neighbours’ plan shouldn’t succeed.

For a start, there is a little-known concept in strata called oppressive conduct or minority oppression. That’s when a majority of votes are used to do something that seriously disadvantages a minority in a strata scheme. A trip to the Tribunal could see the plan knocked over on those grounds alone.

Also, all these changes are going to need a raft of by-laws which collectively will almost certainly fall foul of the caveat in Section 139 (1) which, under the heading “By-law cannot be unjust” says “a by-law must not be harsh, unconscionable or oppressive”.

Any by-law that means you have to pay a massive chunk of money so that you can lose floorspace, light and your view, and get no benefit, sounds oppressive to me and quite possibly would be invalidated by the Tribunal (see section 150).

Then there’s another strata concept to consider – fraud on the minority. That happens when owners with a majority of votes make use of common property solely for their own benefit.

This came up a few years ago when the top floor owners in a block, who were holders of a majority of unit entitlements, voted to allow themselves to extend into the building’s roof space, paying a nominal fee for the taking over the common property. Only they would benefit – and considerably so – from the extensions.

The NSW Court of Appeal – the state’s highest court – ruled that they had to pay the Owners Corporation reasonable compensation based on the increased value of their property minus the cost of the building work.

The case was  Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46  which drew on the High Court’s Gambotto v WCP Ltd [1995] HCA 12 principles.

There is a caveat, however.  When we discussed this with strata lawyer David Bannerman on a podcast a long time ago he said the last time it was successfully run was years ago. However, that also means that it hasn’t been overturned or modified by a more recent Appeals Court ruling.

In the case of the ABC listener to James O’Loghlin’s Afternoons – I’m on every second Wednesday at 1.30 pm these days – the common property would be the airspace that the upstairs neighbours’ balconies are about to occupy.

So the balcony builders need to go back to the drawing board and come up with a different plan that doesn’t disadvantage their downstairs neighbour too much and compensates her individually, and other owners collectively, for the use of common property airspace.

If this were a normal commercial enterprise, they’d be falling over themselves to over-compensate their neighbour, just to clear away any potential hurdles to a project that’s going to enhance the quality of their lives and the value of their homes.

As it stands, they should take a good hard look at themselves and ask what kind of people would even try to pressure a not-so-defenceless neighbour into reducing the value of her property so that they can boost the value of theirs. Just because you are in the majority, doesn’t make you right.

As I said to the caller on the ABC, I am not a strata lawyer but her next call should be to someone who is.

A version of this editorial first appeared in the Flat Chat free weekly newsletter.