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Topic
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The EC wants to enforce investor-owners to pay a special levy of approximately $450,000. This special levy is to pay for the upgrade of our apartment block (not for repairs – just for a reburbishment, ie, to make the place look fresh and appealing).
Only investor-owners will be made to pay the special levy.
I’m on the EC and am an investor-owner. When I said this would be illegal – to make only investor-owners pay a special levy to pay for the upgrade of the building (the upgrade is for the benefit of all owners, not just investor-owners!), one of the EC members became nasty towards me and said he has sought legal advice and was told they can enforce only investor-owners to pay special levies – which means, needless to say, that people who are just owners don’t need to pay a cent for the upgrade (estimated at around $450,000).
Of course the other EC members are not investor-owners, and it is to be noted that the legal advice was sought from an owner (a lawyer) in the apartment block in question, and he is not an investor-owner.
What are your views on this?
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Replies
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There are so many things wrong with this blatantly unfair proposal that it’s hard to know where to start.
Firstly – and I’m assuming you are in NSW – the Executive Committee doesn’t set levies. Levies, including special levies, can only be set at a general meeting.
Secondly, the law demands that levies be imposed on everyone in accordance with the unit entitlements of their lots.
Only a CTTT adjudicator can vary the amounts of levies or decide if certain people shouldn’t have to pay.
Finally, your in-house lawyer should stop giving advice on strata law until they have apprised themselves of at least the basic principles.
I would tell your aggressive committee member that they need to rethink their proposal and if they try to implement it, you will have them all replaced by a CTTT-appointed strata manager as they are clearly not acting in the best interests of all owners and are pretty much making up strata law as they go along.
I would also be forming a caucus of other investor owners to get better representation on the EC to make sure this kind of attempted fraud can never be perpetrated again.
Meanwhile, to back up your argument, this is what the Act says:
78 Manner of levying contributions
(2) Contributions levied by an owners corporation must be levied in respect of each lot and are payable … by the owners in shares proportional to the unit entitlements of their respective lots.
and …
149 Order for variation of contributions levied or manner of payment of contributions
(1) An Adjudicator may make either or both of the following orders if the Adjudicator considers that any amount levied or proposed to be levied by way of contributions is inadequate or excessive or that the manner of payment of contributions is unreasonable:
(a) an order for payment of contributions of a different amount,
(b) an order for payment of contributions in a different manner.
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That is total rubbish. This is from the act:
78 Manner of levying contributions
(1) An owners corporation levies a contribution required to be paid to the administrative fund or sinking fund by an owner of a lot by serving on the owner a written notice of the contribution payable.
(2) Contributions levied by an owners corporation must be levied in respect of each lot and are payable (subject to this section and section 77) by the owners in shares proportional to the unit entitlements of their respective lots.Your SM should know better, this is a fundamental requirement of Strata, you cannot pick and choose who has to pay the levies, if a levy is approved everyone pays.