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Who pays for an EGM? I have been told by the strata manager that I have to personally pay for the preparation of the EGM all the postage and photocopying and the registration of any exclusive by laws which I have asked to be put on the agenda.
Is this right?
The agent refuses to arrange the EGM unless we pay upfront. This is for a small block of 8 owners and I already have more than 25% of the owners requisitioning for the EGM?
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Is your agent is on crack? You do not have to pay. The Owners Corporation (OC) pays.
As you seem to be aware these matters are covered by Cl 31 of Sch 2 of the Strata Act. It is the OC's obligation to pay for the matter
It would be nice to ask the agent why he/she thinks you have to pay.
From the Urban dictionary : Are You On Crack? When someone says something that is either unbelievable or utterly foolish and stupid.
Billen Ben, I don't think this agent is “on crack” literally or figuratively. The one sensible thing you have written is to ask the strata manger why they think the owner asking for the special resolutions should pay.
The situation is much more complicated than a simple reading of strata law (as so often is the case). Clause 31 of schedule 2 only says that the EC is required to convene an Extraordinary General Meeting if requested by 25 percent of the owners. It says absolutely nothing about who pays for what.
The OC might well pay for the EGM under normal circumstances but the cost of preparing special resolutions etc can often fall to individual owners if the process is mainly for their benefit (like an exclusive use by-law, for instance, allowing them permanent and exclusive use of common property).
We don't know if that's the case here but it's certainly a possible scenario and it's a common courtesy in many buildings for the person who benefits from a process to pay for it.
For example, an owner may have the support of 25 percent of owners (in this case, the owner and a neighbour would be all it took) for an EGM to be called to give the owner(s) exclusive use of a store cupboard.
The agent in a situation like this might quite correctly feel that those who benefit from the special resolution should pay for it. Why would the OC pay for something that only benefits one or two people? You would assume that the other owners would agree with this.
I'm not sure about asking for payment upfront but the agent is in a position to advise all owners that they shouldn't approve the special resolution unless all costs are borne by those who are going to benefit. Owners would be “on crack” to do anything other than agree.
So perhaps the agent is right to short-circuit this possibility (and thereby increase the likelihood of the people who have called the EGM getting what they want.) In many cases, other owners will say that if the owner who benefits isn't going to pay for it, then they are going to vote against it – and quite right too. Doin't forget, it only thatkes the same numbers – 25 percent – to block an exclusive use by-law as it does to call an EGM.
There are many other cases where the strata manager might appear to overstep their authority for very good reason. I have also know cases where serial pests in a building have enough clout to keep calling EGMs where they know they have no chance of success but just want to exercise their strata muscle becasue they aren't getting their way on other issues. They simply want to make all the other owners jump through the hoops for their own amusement – the strata manager is doing his or her jobe by making sure the OC isn't out of pocket for these irritations.
Just to be clear, I'm not saying that's the situation here and I have no reason to think it is.
But we don't know the facts of this case so it's a bit early to be telling people that their strata manager has lost the plot.
If this is an EGM to correct anomolies in a building that are going to benefit the majority of people in the building, then, yes, you would want the OC to pay.
But even if this is a legitimate request by an owner to get an exclusive use by-law that benefits only them or a minoity of owners, then the strata manager is perfectly entitled to find a way of letting them know that there is no “free lunch” in this regard.
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