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Hello. Does privacy law in NSW prevent minutes showing lot and apartment numbers of those in arrears?
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I have owned a strata property in NSW for 30 years. At every AGM we get a list of the financial status of ALL lots. For each lot we get owners name(s), levy amounts, payment amount and balance. So, I would suggest that no privacy laws apply. In any case, if someone is in arrears the other owners have to decide what to do recover payments (i.e. more reminder letters, legal recovery, etc) so would need to know who is in arrears and by how much.
Privacy laws don’t apply to strata schemes as they are corporations with turnover of less that $3million a year. Also, the owners have a right to know everything to do with the running of their schemes (despite what strata managers who withhold strata rolls might say).
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We switched to a new and well regarded strata manager. Previous manager would give the arrears information to the committee and I was careful not to share it. New manager allows everyone in the strata to download the current financials including everything.
There are plenty of strata schemes that don’t “name and shame” levies defaulters, based on the simple logic that they have enough problems without becoming social pariahs too. Usually this is extended to owners who have made an effort to explain why they are behind with their levies and what they plan to do about it.
As for owners who don’t give a stuff about what effect their slow payment has on their neighbours, I would make sure their names were out there and why.
The strata committee can instruct the strata manager on how they want information to be revealed but you can’t stop owners accessing information that they have a right to know.
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In ours there is a bit of anger, but it mainly seems to be against the former strata manager for allowing the arrears to become so high. I was worried but assumed that the strata manager had it all under control.
I’m starting to wonder if we are going to end up as a failed strata. The best outcome is that we are going to have a lot of forced sales, and some of those we are going to lose the levies that are in arrears. The banks are going to get battered, but they are doing quite nicely. My unit goes on the market early in the new year because I can’t cope with it anymore.
Hello. Does privacy law in NSW prevent minutes showing lot and apartment numbers of those in arrears?
Unfinancial members [should be identified] because they are not entitled to vote at owners corporation meetings (e.g. Annual General Meeting, Extraordinary General Meeting). They can attend the meeting and join in the discussion but they cannot vote.
Do you mean that you will lose the levies in arrears because there will be nothing left from the sale after the secured creditors are paid? That sucks. We were lucky recently that after a forced sale (following bankruptcy proceedings) and the banks were paid there was enough left to cover the unpaid levies. We were told that our only other option would have been to sue the errant owner, and we’d already had him in bankruptcy court.
Some owners’ can’t appreciate that there is no “them and us” in strata – just us – and they don’t realise that unpaid levies affect everyone, not just the committee.
A shortfall in levies affects everything from building services to repairs and maintenance.
Once unpaid levies reach a certain level, owners should be required to raise a loan against the security of their flat, and their bank or mortgage lender should be legally obliged to provide it.
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Do you mean that you will lose the levies in arrears because there will be nothing left from the sale after the secured creditors are paid?
Yes, it is a strong risk. Most of our recent owners would have about $150k in equity at the original purchase price, but some would be less than $100k. Due to our high strata fees, we already have drops in prices of $100k and it will go lower.
I recall from when we were dealing with this that the arrears are passed to the new owner, who is then liable for the unpaid levies. But our strata manager warned us that a savvy buyer might have a clause in the sale contract saying that they are not liable for unpaid levies, in which case the OC would have to sue the previous owner.
I contacted the selling agent and made sure he knew the levies were in arrears. I figured he would have some disclosure requirements and that was the best thing I could do to help our cause. I don’t know if it was the agent or the solicitor who told the buyer about the arrears – but they were paid so all is well.I’m starting to wonder if we are going to end up as a failed strata. The best outcome is that we are going to have a lot of forced sales, and some of those we are going to lose the levies that are in arrears.
One of the unforeseen consequences of too many owners owing too much is that it makes the whole scheme vulnerable to predatorial investors who, in extreme cases, can take control of the block and push through work that requires special levies, forcing more owners to sell. Once they have bought enough properties at knock-down prices, they then sell or plan the whole block for demolition and rebuild at a massive profit.
And if that sounds like a paranoid conspiracy, there’s a bloke in the Eastern suburbs of Sydney doing it right now. Even if he can’t get the 75 percent of votes to do it on his own, he can get the 30 per cent he needs to stop anyone else doing it.
And then it’s just a case of using strata laws on repairs and maintenance and fire safety orders to squeeze the other owners financially until they are coming to him begging him to buy their flats. Evil incarnate.
The answer, before it gets too bad, is to sniff around for a legit developer who might be interested in a collective sale where everyone would get more than the paper valuation of their flat, not less.
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One of the unforeseen consequences of too many owners owing too much is that it makes the whole scheme vulnerable to predatorial investors who, in extreme cases, can take control of the block and push through work that requires special levies, forcing more owners to sell. Once they have bought enough properties at knock-down prices, they then sell or plan the whole block for demolition and rebuild at a massive profit.
I assume that any developer can buy a unit and then take the strata to NCAT and get an order that the defects must be fixed.
I assume that any developer can buy a unit and then take the strata to NCAT and get an order that the defects must be fixed.
You assume correctly. So the predatorial developer finds a property with serious levies stress, buys one unit at a cut price, agitates for a major upgrade and maintenance program that requires special levies, scares the most indebted owners to sell at below-par prices until they own enough properties to prevent any other developer engaging in a collective sale while putting themselves in the box seat to do exactly that.
Strata law says common property must be maintained but the worst case I have heard of was a block where a cabal of owners pushed through a decision to dig a car park under the block then, when everyone else had sold out, cancelled the plan and ran the building to suit their own agenda.
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