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<p style=”text-align: left;”>Strataman – Are you sure about your interpretation of the Building Code? My interpretation is that the strata building would be a class 2 building.</p>
The class 7 building would be a building that only containedYes, I’m sure. I live in a building with a common property basement car park and that’s the way it is officially classified by the public surveyor and the fire safety engineers. Buildings can eg be class 2 in parts and class 7 in other parts.
Basement car parks sometimes get wet. It’s not a habitable area. Sometimes they are purposely designed that way.
If the car park meets all the relevant building codes, then it’s not a required maintenance issue. But it’s certainly something an OC/BC could decide to improve.
Car parking areas in strata buildings are typically class 7 building areas.
That means not only are they allowed to have wet walls and floors, they are sometimes purposely designed that way.
It doesn’t mean they should flood. But thousands of strata car parks across Australia get wet areas after rain. It can make storage difficult but it shouldn’t affect car parking.
Of course an OC/BC can chose to try to mitigate any problems.
Committees most certainly do have authority to raise a special levy in Victoria.
The committees that I sit on do so quite frequently.
They can’t exceed their spending limit or any others restriction placed on them by the OC Act, the OC or a rule.
Generally, at each AGM, committees are given full authority to represent the OC for all matters except for matters that the OC Act states that they can’t (eg special and unanimous resolutions).
I agree that the committee’s actions are probably illegal but not because they have no authority to raise a special levy.
My advice is not to pay the levy. It’s likely that all or most of the hotel lot owners will protest it and a dispute will result.
If I were you I’d be directly contacting some of the bigger hotel lot owners to discuss a combined action.
As there appeared to be no general meetings called, this action is probably the work of the committee.
One thing that I think you can be pretty sure of is that if the levies raised over the past 8 years were ordinary levies set according to annual budgets, the OC hasn’t a chance of retrospectively applying the “benefit principle” to them.
VCAT has ruled on this, several times I think. The “benefit principle” cannot apply to ordinary levies set by annual budgets.
But what the OC tries to do re future levies remains to be seen. It might try raising more of its income by special levies where the “benefit principle” actually is required to be considered.
I doubt the other hotel lot owners will take this without a fight. And being in the majority, they could get all of this overturned and reversed with enough organisation.
I suspect there will be legal fireworks coming.
From my chats with strata lawyers in Victoria, there’s quite a demand for quantity surveyors by OCs wanting to implement the “benefit principle”.
It seems that a quantity surveyor’s assessment is an accepted way of determining cost distribution.
How it all unfolds in VCAT remains to be seen.
In Victoria, the committee alone can approve special levies up to an amount of double the current annual budget.
There have been several VCAT published cases (particularly by Senior Member Vassie) since the GRUNDL case that have given more guidance on how the “benefit principle” is to be implemented.
I suspect that the OP’s strata scheme is mixed use. A building that’s part hotel and part residential. These seem to be quite common in Victoria.
And also that the special levy relates only to the shared common areas.
In Victoria, the raising of special levies must always consider the “benefit principle” rather than automatically using units of liability. Those lots that benefit more, pay more. Often an accountant or a quantity surveyor is used to determine which lots benefit more and by how much.
Ordinary levies set according to annual budgets must use units of liability however. The “benefit principle” only applies to special levies.
So the question here is not whether a special levy can be raised using the “benefit principle”, but rather can a special levy be used to retrospectively “adjust” ordinary levies?
I doubt it.
It might be possible to retrospectively adjust earlier special levies, but even that seems doubtful to me.
If you look at recently published VCAT cases, you’ll see several about the “benefit principle” and on how it’s been interpreted. It’s rather complex.
Possibly one way for OCs to invoke the “benefit principle” without the need to adjust units of liability would be to raise the majority of maintenance funds using special rather than ordinary levies.
I agree that that the OP, possibly together with other hotel lot owners, needs to get legal advice.
It seems to me that you should seek immediate professional legal advice!
But I do see that NCAT has an “Urgent applications” system that can be heard within 1 to 7 days:
http://www.ncat.nsw.gov.au/Pages/cc/Applications/ccd_urgent_applications.aspx
http://www.ncat.nsw.gov.au/Documents/ccd_form_strata_interim_orders_application.pdf
This is to obtain “interim orders”. Eg that the works must stop until they are approved.
I agree with VicRes.
Even if responsible for its maintenance, it’s doubtful that a lot owner could insure the skylight even if they wanted to.
Compulsory strata insurance covers buildings regardless of if parts of them are common property or lot property or if they are a lot maintenance responsibility or not. It also usually covers lot fixtures, fittings and improvements.
Who pays the excess is another matter.
@Fromthenorth said:
Is there a document or a set of principles that explains how to best run a body corporate ? Or perhaps things that a well run body corporates does ?CAV (the legal regulator) has some information on their website: https://www.consumer.vic.gov.au/housing/owners-corporations
@Fromthenorth said:
Three specific questions:How many strata meetings should there be a year ? At the moment there is an AGM once a year.
An AGM is the minimum legal requirement. It can however be up to 15 months between AGMs. Between AGMs it’s usually the committee making decisions.
We have 8 units with 8 resident owners. What is the best size for the strata committee ? Currently there is a 3 person committee. Some owners have suggested that all 8 owners be on a 8 person committee.
If there’s a committee it must have at least 3 members. IMO, for such a small scheme, 3 is about right. Larger committees have the disadvantage of being harder to organise and run. And an odd number means there will always be a decision as long as all members vote (although the chair gets a casting vote in the event of a tied vote).
@JimmyT said:
It’s similar but not exactly the same in Victoria,
Just to note that it’s actually quite different in Victoria.
A Special Resolution in Victoria requires 75% of the total votes for all the lots affected by the owners corporation. Or 50% for and not more than 25% against for it to be an Interim Special Resolution.
That’s “all the lots affected by the owners corporation”, not just of the lot owners who turned up at an OC meeting.
In larger OCs in Victoria a Special Resolution is almost mission impossible. One of my OC’s with almost 200 lots hasn’t manged to pass a Special Resolution in all its 17 years of existence. Owner apathy I’m afraid.
Lady Penelope said The Lot Owner is responsible for any damage caused by a leaking HWS.
I don’t believe that is correct advice.
A lot owner might be responsible for any maintenance and any replacement of a HWS but is not necessarily responsible for any subsequent damage caused by a leaking HWS unless legal liability can be established.
To be legally liable for any subsequent damage usually requires negligence to be established. That’s very hard to establish in the case of leaking water systems. Where was the negligence?
I have dozens of insurance situations in my strata experience that back up what I am saying.
Lady Penelope said I would question why the OC paid for the repairs to the water affected apartment(s).
Because the OC has insured that event and the property (lot property fixtures and fittings) that was damaged? In other words it’s an insurance claim issue, not the OC paying for the affected apartment(s) issue?
@WMB said:Is this the way this is normally handled. I thought, owner’s hot water would mean owner’s insurance?
It’s not quite that simple. It usually also need negligence for the owner (and hence their insurance cover) to be legally liable.
And usually a lot owner’s fixtures and fittings are covered by OC/BC compulsory insurance.
Burst and leaking pipes etc are usually not a negligence matter unless there’s some manufacturer’s requirement to do inspections or maintenance. And the damage any such leak might cause to common property or lot property fixtures and fittings is usually covered by OC/BC compulsory insurance.
Thanks JimmyT.
CHU’s response is pretty much my experience with them.
It’s a somewhat odd situation that while an OC/BC is only responsible for the maintenance and repair of common property, its compulsory building insurance cover often extends to lot property.
I’m on strata committees and there have been circumstances where lot owners have successfully claimed without us knowing. But I’ll put that down to our strata manager not on-passing that information. I’m not sure we could have stopped a valid claim anyway. But that’s another question.
@Happy Strata said:
The claims you make on insurance may impact the cost of cover in future years. Therefore when residents make dubious claims on the OCs insurance, the OC may incur increased future costs of policies. Therefore a few people pushing the envelope, will result in all residents being burdened with higher costs in the future.Doesn’t seem very fair to me. Just because you can do something, doesn’t mean you should.
It’s certainly a valid point.
But is it fair that an OC could prevent a lot owner from claiming on a policy that the lot owner has contributed to, for an insured event to their lot property that won’t be covered any other way? A lot owner probably won’t be able to claim on their contents insurance (or any other insurance) if the OC’s building policy already covers that insured event.
I suppose the OC’s other option would be to pay themselves.
I asked a couple of strata insurance companies (including CHU) if a lot owner could claim directly for a covered lot property insured event. They said, that as far as they were concerned, they could. That appears to have happened in the link that Sir Humphrey gave, where the lot owner was encouraged to claim and was seen by the OC insurer as an “agent” of the OC.
My OCs have also had insurance claims paid for damage to lot property caused by common property failures or defects. The OC had to pay for the common property failure or defect to be repaired but the OC’s insurance company paid for the consequential damage to lot property.
Perhaps that’s the OP’s situation? It would be interesting to know how the shower screen became damaged due to an insured event.
@Sir Humphrey said:
Here it would be the OC that has to make the claim because the policy holder is the OC, not any individual member of the OC. That is why the OC would pay to do the repair and recoup its costs by claiming on its insurance policy.Not meaning to nit-pick here but I’ve personally spoken to large strata insurance companies and it’s not the way they see it. They have told me that lot owners are seen as a part of an OC/BC and can even independently make a claim if it’s for their insured lot property.
I’ve also had a recent claim in one of my ACT properties and the OC did not pay for the repairs. I had to pay for the repairs myself and claim back from the OC’s strata insurance. But it worked and the OC’s strata insurance company paid me directly.
But I think the main thing here is to note that lot property fixtures, fittings and even improvements, that might be a lot owner’s responsibility to maintain and repair, can actually be covered by an OC/BC’s strata building insurance. So if an insurable event happens to them an insurance claim can be made.