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Topic
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My brother-in-law owns an investment property that is a unit in a block of <10. Until about 2-3 years ago, the rent paid a substantial part of the mortgage.
The company that manages the property has over the past 2 years purchased the majority of the other units, and so now holds power on the EC (or board or whatever it is called).
With this new power, they have raised and passed multiple special levies- primarily for cosmetic renovations. The number of special levies has increased so dramatically, that my brother-in-law no longer receives any rent because all rent goes the property managers first, who then deduct the special levies.
This is a very nice arrangement for the property managers because they are receiving all the cash and getting other owners to increase their property value- however, for my brother-in-law, it has caused huge financial stress as he now has to pay all the mortgage from his salary & can’t sustain this- forcing him into a position where he must sell the unit whilst the market is down and before the cosmetic repairs are done.
Is there anything he can do to get out of this situation?
Can he appeal the multiple special levies?
Is there anything he can do about conflict of interest of the property managers also owning a majority in the building?
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Replies
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Let me begin by saying I think you need to talk to an experienced specialist strata lawyer about this – but I think it could be worthwhile as these property managers may have overstepped themselves.
For instance, if they have voted to re-appoint themselves as property managers or have blocked attempts to take legal action against them, they might be in trouble.
It’s hard to know the answer unless you know the specifics (eg, if it is, in fact, a ‘board’, then this would be Company Title and comes under company law, not strata law).
And even if your brother has grounds for legal action, if I were in his position I’d be offering to sell the unit to the property managers at above market rates just so they can avoid the great trouble he is about to rain down on them.
Apart from that, strata litigation is one of those areas of life that even when you win, you often lose. And that’s why, ironically, your brother needs to talk to a lawyer asap.
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