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[WoodWalker]

I have requested a General Meeting (supported by more than 25% of owners) to discuss mounting costs and an update on arrears and subsequent bankruptcy of one of the owners in our 10 unit complex in Canberra.

The Executive Committee has responded by inviting the Strata Manager, a Melbourne-based law company, and the Bankruptcy Trustee to attend the meeting with the costs to be paid by the OC “in the first instance”. Item 8 in the agenda is “Consideration of cost recovery from <individual owners> generating costs ….”

I can’t help but think that this item is directed at me (as the person who organised the meeting request) or perhaps the people who signed the meeting request.

My question is: Can the General Meeting or the EC add these costs to the OC levy for an individual owner? It is the EC who decided engage these professionals, not an individual owner or all owners.

Thanks for any advice,

Woodwalker

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[Sir Humphrey]

The OC can bill a unit owner for an expense that is the ‘fault’ of the unit owner. However, the general meeting was called in response to a petition by >25% of owners, which is one of the mechanisms by which a general meeting can be called. So, the meeting has been called legitimately. I doubt it could be characterised as a ‘wilful or negligent act or omission’. I can’t see that meeting costs can be sheeted home to a subset of the unit owners.

The EC engaged those various professionals, presumably also not a ‘wilful or negligent act’. The EC can exercise functions of the OC, which includes getting professional advice and strategic planning. So, those would seem to be legitimate costs for the OC as a whole, so that ends up on levies for everyone ultimately.

As for ‘in the first instance’, I suspect that the EC is hoping that at least some of the OC’s costs will be recoverable from owner with the arrears. Failing to pay one’s levies and persisting in failing to pay, so much so that the OC needed to incur costs on professional advice on debt recovery, could be found to have been ‘wilful or negligent’.

s.31 from the UTMA:

Recovery of expenditure resulting from member or unit

occupier’s fault

This section applies if an owners corporation for a units plan has in carrying out its functions incurred an expense, or carried out work, that is necessary because of—

(a) a wilful or negligent act or omission of a member of the corporation, or an occupier of the member’s unit; or

(b) a breach of its rules by a member of the corporation, or an occupier of the member’s unit.

The amount spent or the cost of the work is recoverable by the owners corporation from the member as a debt.

If the owners corporation recovers an amount under subsection (2) from a member for an act, omission or breach of an occupier of the member’s unit, the member may recover the amount from the occupier as a debt.

In this section:

expense, includes a reasonable legal expense reasonably incurred, including a legal expense relating to a proceeding in the ACAT.

work, carried out by an owners corporation, means maintenance or anything else the corporation is authorised under this Act to do.

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[WoodWalker]

Thanks for your reply Sir Humphery.

Yes, the “a wilful or negligent act or omission of a member” or “breach of its rules” does not seem to apply in relation to calling a General Meeting … but we will see how things unfold at the meeting tonight.

Kind regards,
Woodwalker

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