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[Two Crows]

Where the developer maintains a majority of the units of entitlement of the Owners Corporation at EGMs and AGMs, under what part of Strata Law can individual or groups of Owners refer common property defects to NCAT? Advice appreciated! Many thanks.

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[Jimmy-T]

Technically, a developer can’t “own” a majority of votes if they have sold more than one-third of units but less than half. Until such times as more than 50 per cent of the property has been sold, their holding is reduced to one-third.

But even if the developer has only sold one quarter of the units, or has sold units to effective proxies,  and is dragging his or her heels on defects, there must be an item on AGM agendas dealing with defects (see Schedule 1, 6 (d) below) and the developer is not permitted to vote on it (Sc 1, 15).

Family members or business partners may be similarly prevented from voting as they are “connected persons”, as defined by Section 7 of the Act.

So, to answer your question, you just raise the issue at your AGM and then exclude the owner and his cronies from the vote.  If you’ve had an AGM at which defects weren’t discussed or the owner voted, demand a new AGM or seek orders at NCAT.

As a last resort, you could go to NCAT and ask for orders requiring the Owners Corp to pursue defects claims before the deadline runs out.

Schedule 1 Meeting procedures of owners corporation

6   Required items of agenda for AGM

The agenda for each annual general meeting must include the following items:

(d)  until the end of warranty periods for applicable statutory warranties under the Home Building Act 1989 for buildings of the strata scheme, an item to consider building defects and rectification.

15   Developer or lessor excluded from votes relating to building defects

The developer or lessor of a leasehold strata scheme is not entitled to vote, or exercise a proxy vote, on a matter concerning building defects in, or the rectification of building defects in, building work to which Part 11 of this Act applies.

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[Two Crows]

Thanks so much, Jimmy T. Presumably this would also apply to an EGM where matters of defects are raised?

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