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I own a unit in a small block. One of the owners of a top floor unit has put plans to the Owners Corporation to build into the roof space – bedroom, study, wall in robe and ensuite and balcony that extends out over the downstairs roof.
The owner has drafted a by-law for exclusive use of this space but has no intention of compensating the others owners. I called the Strata Manager to ask how other blocks deal with matters such as this but they bluntly told me they did not provide legal advice.
have any other owners experienced this? I think the owners should be compensated.
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To quote The Castle, tell them they’re dreamin’. The owner must compensate the owners corporation or they risk someone in the future taking them to NCAT to have their land grab (because that’s what it is) rescinded.
There is a principle established by the High Court of NSW for a minimum level of compensation – and I stress this is the minimum, not a set level – that the owner expanding into common property must get an agreed estimated value on the improved property, minus the agreed value of the existing property plus the costs of the improvements, with the difference being paid to the owners corporation.
I can’t stress the word “Agreed” enough. You don’t have to accept any figures this land-grabber puts up. They have to be independent, verifiable estimates and you can demand to see quotes, final invoices and bank statements to prove you aren’t being swindled.
If the renovator doesn’t agree to those condition, then you are perfectly entitled to refuse to allow the work to proceed, with a clear warning that you will have it stopped by the Tribunal if they do go ahead, even with the agreement of the majority of your neighbours.
Even if every other owner in the block agreed to the renovation without proper compensation, this would be illegal under a principle known as “fraud against a minority”, which is basically when someone in a corporation can get enough support to legally pass resolutions to the unreasonable financial detriment of other members.
If I were you, I would approach someone like our sponsors Strata Answers to advise you and maybe even manage the process on your behalf.
Meanwhile, your strata manager sounds like a box-ticking clerk and is not only a waste of space but an obstruction to the good management of your building.
In your shoes I would get rid of her, sign up to something like our other sponsors Stratabox to self-manage your scheme and use Strata Answers for anything tricky or legal like this issue.
Strata finances aren’t that difficult to manage in a small scheme. If your strata manager says that’s all she’s employed to do, cut out the middle person and do it yourselves.
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While your manager might be careful to say they don’t provide ‘legal advice’ because they are not a lawyer, it is ridiculous that they can’t just answer your reasonable question, ‘What do people usually do?’ That should be entirely within their area of experience and expertise to answer.