A few weeks ago, I asked the questions in our annual Lawyer In The Hot Seat Zoom webinar with strata lawyer (and Flat Chat sponsor) David Bannerman.

All through the session, viewers were posting their own questions and David promised to collate and answer them.  Here’s the result – more Qs and As for you.

Can we quit an embedded network?

Can the OC exit out of an embedded network system? – Azeem

DB: Yes, depending on the terms of the embedded network agreement. I suggest that any owners corporation seeks legal advice before seeking to terminate and exit an agreement.

Who pays special levies on a recently purchased flat?

Is the Owner’s Corporation or the new lot owner responsible for special levies relating to a maintenance issue that the OC knew about for many years, but failed to property investigate and address [and was not identified in the strata records], before the property was purchased? – Cecilia

DB: The new owner will be responsible for the special levies if they were struck at the time that owner was the owner and it is not provided for the contract for sale.

What can you do about serial pest emailers?

What about vexatious emailigants? – Christine

DB: The owners corporation should consider a communications by-law, appointing a point of contact to receive emails. Everyone else receiving emails from this person, should block that email address. An owners corporation should remember that not all correspondence needs to be responded to and I would suggest that the point of contact vet the emails to ascertain whether a response is required or referral to the next strata committee or general meeting.

Owners refuses to get permission for door extension

Unauthorised extension of courtyard door which required a DA. Owner refuses to get a BIC from Council and refuses to get by- law. Should we use NCAT or go to Council? – Daniella

DB: I would prefer NCAT over Council involvement as Council involvement could result in Council issuing orders against the owners corporation for rectification or upgrade of other works, such as a fire safety upgrade order.

Confusion over mould

A lot of mould issues are also ventilation issues. Agents appear to be hyping up tenants with declaring it all as “black mould” because it is black in colour. Do you have any comment for dealing mould occurring when no common property is the cause? – Debbie

DB: All mould should be investigated. In my experience, mould issues are rarely all lifestyle /lot owner issues. Mould requires moisture and it is almost always a common property issue and should be thoroughly investigated. Failure to rectify the issue can cause ongoing compensation claims from the lot owners.

Do strata managers have to do committee training?

Are strata managers sitting on the committee of their own investments and not strata managing the complex, still exempt from the SC training?  And is there a time limit on the training? Will there be a timeline on SC members completing the course before the OC are required to remove them?

DB: Yes, Strata managers are exempt from undertaking the strata committee training. And yes, the training must be completed within three months from appointment, after which the committee member ceases to be a member of the committee.

Using Capital works guestimates to delay levies

Some committee members are taking it upon themselves to use the Fair Trading Capital Works Fund (CWF)  Plan which is “guesstimates” so they don’t have to  raise the levies – how is this managed when the intent of the CWF Plan is considered to make this is funded.

DB: I am not sure I understand. There is a requirement to have a 10 Year Capital Works Fund Plan and raise money in accordance with it. There are also obligations to review the 10 Year Plan, every 5 years and to ensure that it is being followed.

Losers in UE case want to relitigate

We have a strata plan who had the unit entitlement assessed and revalued in NCAT 2016. They contested and appealed but upheld. The new owners of these developer units don’t like how many they have and now using majority UE to force owners to pay for another revaluation. Can they do this when they did it in 2016?

DB: Yes, a valuation on the unit entitlements can be obtained. An application to NCAT to have the unit entitlements amended may have Res Judicata issues, (a principal that may prevent cases being re-litigated) unless there has been a subsequent subdivision or change in the permitted land use since the original reallocation.

Do we have to nominate candidates for ALL the committee vacancies?

We recently had an AGM and had more nominees for the strata committee than open positions. The strata manager ruled ballots invalid if names were not filled in for all open positions. Is that correct? The act states write names you want to vote for. We only wanted to vote for 3 of the 5 open positions – Marc

DB: Good question. Clause 10(3)(a) of the Strata Schemes Management Regulation 2016 provides that the ballot must (among other requirements) ‘be signed by the voter and completed by the voter’s writing on it – the names of the candidates (without repeating a name) for whom the voter desires to vote, the number of names written being no more than the number determined by the owners corporation as the number of members of the strata committee’.

I think that you are probably correct in that you only need to vote for candidates that you desire to vote for and can vote for 3 candidates out of the 5 positions.

Strata managers and money laundering

With new AUSTRAC enrolments from 1 July, how do you see this impacting Strata agents and reporting red flags to AUSTRAC? – Suzanne

(AUSTRAC is the Australian Transaction Reports and Analysis Centre — Australia’s anti‑money laundering and counter‑terrorism financing (AML/CTF) regulator and financial intelligence unit, responsible for detecting, deterring, and disrupting criminal abuse of the financial system – JT.)

DB: Strata managers will need to ascertain whether or not they provide designated services. Some strata managers likely do provide designated services and will need to adopt an appropriate AML / CTF management structure, appoint an AML / CTF officer, develop a complaint AML / CTF program and associated staff policy and develop and implement staff training.

The strata managing agent company is a reporting entity, they will have to comply with the reporting requirements of AUSTRAC when engaging in designated services.