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again we are having more problems with the initial owner / developer of our 14 unit strata scheme. Early in 2016 the developer advised us and the other owner ( only 2 Apartments had been sold) that we would need to pay 1/3 of the very large water bill received by him as we were the only people living in the complex. He said he would also pay 1/3 even though he only lived here part time. This was despite the fact that he had a full time maintenance person who was watering lawns sometimes overnight and from time to time left the hose on for days at a time . In addition to our quarterly levy we paid the developer our lot percentage amount ( 7%) of this water account .
Two more people have now bought in to our Strata scheme, the initial owner/developer has now sent our new neighbours and us an email stating that we are indebted to him and due to this outstanding debt we do not have the right to vote at the First AGM which he intends to hold shortly. He has also stated in that same email that he would not support our nominations for a position on the Strata Committee and as he has the majority vote then he will have the say, he says. He still owns 10 units and now intends to transfer one to his partner (who is an overseas country citizen) so he can retain the majority vote.
My questions are these :
1. How should we respond if he does not allow us to vote at the first AGM?
2. How should we dispute his claims that we owe him money for the water?
3. Should we apply direct to NCAT for an adjudicator to appoint a Strata Managing Agent so this guy can be removed from his position of “Owners Corporation” during this initial period?
Your advice on this would be very much appreciated
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I personally believe that a user pays system (i.e. individual meters) will end up serving you better in the long run. Individual meters have their advantages, particularly when you use tank water in addition to mains water. There is no incentive to save water if there is only one main meter and the water bills are divided according to unit entitlement (UE). Those tanks will empty quickly if no one is concerned about water saving. Under the UE system a single person in a 3brm apartment ends up paying the same as 7 people living in the same sized unit when clearly the water usage is much less. Also, it is difficult to track down leaks in the water network if there is only one main meter. If a tap is leaking then an owner may think that it is not worth caring about as they are only paying for every fourteenth drop!
As for your current problem with gaining access to a copy of the bulk bill …keep trying via the developer owner. You cannot be expected to pay a bill which you cannot see proof of. Document all your attempts to resolve the issue. And seek assistance from the Office of Fair Trading from someone who is familiar with problems in strata in the initial stages.
When are the individual meters being installed?
I agree with LP. Individual meters are better. Fairer and more environmentally friendly. Our townhouses were built with individual meters but for many years the OC paid a single water bill for the whole site. Eventually it was resolved at a general meeting to be billed individually. Part of what convinced people was that a small number of units were found to have been consuming very much more than the average. It was annoying to those who had been making effort to conserve water to learn they were subsidising profligate use by others.
If I was in your situation I do my utmost to have as little to do with the seemingly incompetent developer/owner/manager as possible, and that includes avoiding any common water bills, whether they be mains bills or tank bills. It may be several years before all 14 lots are sold and it would appear that your life will be continually beset with the problems that you have already mentioned.
If it means paying an extra couple of hundred dollars to install another water meter for the tank then that is the option that I would chose. In other words, I would gladly pay for the two separate meters. Make sure that the water meters are easily accessed by the meter readers.
Trying to read and calculate the correct amount that you have to pay from the mains water meter for the common property is not something that I would like to undertake and may not be necessary, particularly once an OC has been established.
“The individual meters for the units are located downstream of the master meter and their consumption is deducted from the master consumption for billing purposes. Any residue (common area usage) is billed to the Owners Corporation.”
The Owners Corp common property bill for common property usage is paid by the OC from the Admin Funds. Unlike water for personal use, the common property water usage should not fluctuate too greatly so should be able to be ‘guesstimated’ and assessed before an AGM and included in the levies. A plumber may be able to assist you set the first common water Admin Fund line item for common water.
I am not sure what region you are in but the Hunter Region have produced a booklet that may assist your scheme in installing separate meters. Perhaps you have seen it? It includes a lot of helpful advice such as best practice for installation, by-laws etc.
Faraway girl – Some considerations for you …… Installation of the water meters is only the first step. Then the meters need to be read.
What is your Council’s position on reading individual mains water meters? Some councils will only read the one water meter for the building as a whole, and then they bill the strata scheme directly.
In some situations it is up to the strata scheme to read the individual water meters.
It’s also up to the strata scheme to pay the water bill to Council, raise invoices to the individual lot owners for their usage and percentage of costs and then chase those lot owners for payment.
The way to solve this issue is to approach your council and request that they enter a sub-metering agreement with your strata scheme. Council can then read the individual meters and bill each lot independently.
NB: The link included in my previous comment offers some suggestions on how to write the sub-metering agreement and by-law for your OC.
Your tank water meters would not be under the control of the council and may need to be read by a local plumber. To save costs on reading the tank water meters the tank water readings do not need to occur at the same time as the council reading and could perhaps be less frequent.
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Apologies if this is not possible at your scheme. I didn’t realise that you were a multi level scheme.
Perhaps just the sub meters for the mains water should be installed and not the tank water meters. You may need a plumber to read the sub meters and work out the individual water bills if council are unable/unwilling to do it.
Just out of interest, how many of the apartments have been sold so far? You must be close to the point where you can hold your AGM and take control of the building (bearing in mind that chummy has his vote reduced to one third of his holding until he has sold more than half of the properties).
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Faraway girl – To obtain some more information from you: Did you enter into an agreement with the Developer when you purchased your Lot as to what your levies were to be? Do you have a copy of it, or can you ask your conveyancing solicitor for a copy of it? How was the figure of $2400 arrived at? Was water mentioned and if so did you sign an agreement as to how the water usage was to be divided?
I think Faraway girl has said that 4 lots are sold with the D holding 10. Usually only one more Lot would need to be sold to make up 1/3 of the aggregate unit entitlements to trigger a “leap” out of the “initial phase”, but that depends on the aggregate unit entitlements that have sold versus those that are remaining. Fingers crossed for a speedy sale … but it is a slow process by the look of things! Having such an unwieldy type of water arrangement is enough to scare potential buyers away.
Faraway girl – This is all highly unusual! As you have pointed out the levies should not be set the way have been set. This alone is an issue for dispute.
This is definitely a matter for the Office of Fair Trading, and possibly NCAT. Good luck with it. It certainly has been a rough ride for you all so far.