[Billen Ben]

Simone said:

Hi Lyn,

………….. If an amended by-law to prohibit any animals has been passed, you may be able to revoke the amendment under s157 of the Strata Schemes Management Act on the basis that it is unreasonable and oppressive. There is also High Court authority, which questions the validity of by-laws that are prohibitory rather than regulatory. …………….

Kind regards,

Simone Balsara
Lawyer

---

TEYS Lawyers
The Strata Law Experts
02 9562 6500

simone@teyslawyers.com.au
https://www.teyslawyers.com.au

Is it possible to supply a link to the case or cite the case.

In 2002 an adjudicator suggested our SP change our by-law after the OC pursued a 70 year old woman who lived on her own on her 2 acre lot when that little old lady got a fox terrier. The little old lady got to keep her dog but the OC rejected the suggestion. In 2008 another adjudicator refused to repeal the same by-law and currently there is another round of dog wars going on.

My SP has a prohibitory by-law and the anti-dog element are constantly harassing people. They aren't shy either, young, old, people with disabilities, they don't care who they go after.  The by-law continually turns the SP into a war zone.

This is the by-law below and what needs to be kept in mind is that this by-law applies in an 800 acre, rural, SP which has 115 lots that are roughly 2 acres each. The by-law is bizarre in such a setting.

Clause 13 Keeping of animals

The owners or occupiers of a lot shall be entitled to keep any animal upon their lot provided that:

(a) No dogs or cats shall be allowed upon any lot or the common property other than existing animals already duly approved as at 7/6/92.These animals may not be replaced.
(b) his or her animal is adequately restrained to prevent that animal entering or encroaching upon common property or any other lot, and
(c) no cat shall be allowed onto any lot or the common property unless it has been de-sexed, and
(d) the keeping of such animal is not otherwise prohibited by law.

[Billen Ben]

Mr strata said:

The answer is in the detail and the 'deal' that the ec could negotiate with the respective lot owners/party that you are looking to sell the rights to.

It could be a contract condition that the purchaser makes the area good or 'fit for purpose' and factored into the purchase price.

From the purchaser's perspective I would envisage a strata subdivision would be better as it is more secure title.

Keep in mind which ever way the OC wishes to go you will need to lodge a DA and get council approval.

The idea of a strata subdivision is a good one – it may then be possible to do a consolidation of title and “consume” the additional property into the original title.

We currently have one owner doing a boundary adjustment. That may also be a good option – that also requires a DA if dealing with common property.

Keep in mind the cost of any change in unit entitlement.

[Billen Ben]

How solid is the approval process?

If it ends up in the Supreme Court would it be a case the owner has valid approval which includes responsibility for the CP involved so it is the owners problem. If he has responsibility for the CP in question then any liability would also be his as well.

There are a lot of scenarios but if the process gives the owner responsibility then why should the OC then fix his bathroom if it all goes wrong.

Consider: It sounds like a good way to have the OC pay for new bathroom tiles if doing half the job and then claiming poor returns responsibility to the OC to fix the damage.
If that is the case then the process needs to be rectified.

Perhaps the approval process should include proof of cost and proof of funds to avoid a repeat of this situation. To go even further the process could involve the funds being held by the OC and released as the job proceeds.

Consider also: if the approval does not mean the owner needs to repair the CP then the OC has the obligation to repair commons regardless of who does the damage but the OC can still pursue the owner who cause the damage for the costs of repairs.

Consider the future; reformists want the people responsible for damage to CP to be liable for it without the OC having to chase them. What would the OC being doing then given the guy is claiming poor?

The future aside; it seems equitable that the owner should be paying to fix the damage either because he has the duty due to the process OR because the OC fixed the damage he caused and he “owes them” for their costs.

If he can afford to fix the damage then he can probably afford to finish the job but the scenario is he can't afford anything.

Good situation …. i look forward to others comments on it.

[Billen Ben]

Wow! My off the cuff advice would be to seek a s162 appointment of a good manager. It sounds like that between the EC and SM that the management has been let go to the complete detriment of “all owners”.

The post is talking about a half a million dollar change in the equity of the sinking fund.

I would suggest contacting the Institute of Strata Title Managers, explaining the situation and seeing if they can recommend a highly competent member who would be willing to consent to being s162 agent OR seek out your own. I would love to recommend a name or two but the nature of this forum suggests i should not do so; the point is there are some very good agents to be found. Some of these agents can manage remotely (they are based in the city but they have the skills to manage a rural SP well)

You could try to remove the EC and get a more responsible group of owners to instruct the SM but if that is not possible then a s162 order could be in order.
If 1/3 of owners think the SM is incompetent then that is enough support to force an EGM (cl 31 of Sch 2 of the SSMA) to try remove the EC (cl 4 of Sch 3 of the SSMA) and to try to appoint a new agent.
The mere act of forcing an EGM to air the matter might get enough support from the apathetic element to get the change you need.

Your SP will become insolvent at some point if this backward financial slide continues. It is no wonder the auditor is passing dire comments.
The change in your sinking fund position is not good. Poor planning, poor budgeting,  penny pinching AGM's, extravagant spending; whatever the reason is it needs correcting because no SP can continue such a slide.

My two suggestions are to air the problem at an EGM and seek some good outcomes from the EGM OR to seek a s162 appointment if you can find a quality SM. Even CTTT will have trouble ignoring such a shift in equity.

[Billen Ben]

The Dawdells said:

Ok, here's the response from our strata manager…any thoughts?:

I understand your concerns however there is no obligation on the owners corporation to repair or replace items that are damaged as a result of a contractor regardless of who engaged them.  There is no negligence or liability on the part of the strata plan.

 

A similar scenario could be if a contractor engaged to undertake work at the building accidently hit one of the owners vehicles, there is no liability on the owners corporation or the owner who engaged them.

If a mowing contractor rolls up to a house and puts a small rock through a door during the course of his work he claims on his insurance and fixes things up. If he will not come to the party the owner can claim on their insurance and often the owners insurer will pursue the contractors insurer or the contractor. Why is this so different .. i don't think it is.

I am sitting here laughing out loud at what the agent has written. I am not a lawyer. I do self management services which help OCs get rid of hopeless managers and allow the owners to do many of the things they pay agents too much for. I am not anti-agent but too many agents are getting too much out of OCs for doing simple tasks. The owners just need a little knowledge and some first time guidance to do it themselves.

The OC has a duty to maintain and repair regardless of who cause the damage; have your agent read s62 and see what poor excuse is offered for still not fixing the matter.

Seriously … look for a new agent.

I will watch this topic with interest for a legal opinion. For me the only question is whose policy should be making the claim, the gardener or OC.
At present i feel the gardener should have insurance and should be claiming to fix the damage.

[Billen Ben]

Absolutely!
The EC or agent should quickly pursue the gardener to claim on his insurance as the gardener should have insurance to cover the damage BUT if things get bogged down and you need to use the air con then press the OC to fix the problem via their insurance or funds as they have the, immediate, s62 duty regardless of who did the damage.

The following is from Clover Moores' 2009 Strata discussion paper.
The full paper can be found HERE

Issue 4.3 Damage to Common Property
Owners Corporations pay for damage to common property, regardless who caused it.

If the OC need to fix the problem via their own insurance or funds then it does not dissolve the gardener of responsibility for his damage; it just mean you get a more immediate repair while the gardener fights what should be a losing battle.

If your agent is suggesting you (personally) chase the gardener for reimbursement, are they suggesting you get it fixed, using your personal (not OC) funds, and then have the gardener reimburse you?

You should look into getting a new agent if that is the case. They should know it is not for the owner to chase up this type of matter.

If the gardener will not take immediate action (make a claim on his policy) then claim on the OCs policy and let the OCs insurer chase the gardener.

This matter presents as one that deals with damage to common property and it is an administration matter i.e. agent or EC. Have a quick look at the agency agreement and see if insurance claims is a part of the delegation of duties to the agent and make a claim on the OCs policy if the gardener wont play nice.

[Billen Ben]

My understanding from the CTTT Chairperson is that a Member acting as a strata schemes adjudicator should not be referred to the review committee of Sch 3 of the CTTT Act because they are acting as an adjudicator and not a member.

This would mean that s83 of the CTTT also would not apply to adjudicators.

So what is indemnifying adjudicators ?

[Billen Ben]

daveylicious said:

I was hoping to get some advice / assistance in regards to identifying where the currently allocated area for the bins to go is, and if we have any position to argue that the bins should not go in an area which we feel impacts on ourselves and the value of our property.

 

Here is a little story, a true story, that may shed some light on owners rights.
In our SP an owner purchased a unit only to find the OC had an “unapproved” cemetery next to the unit. The Local Council had approved a site but the OC had never asked for it or passed any motions to approve the use of that area of common property as a cemetery.

There were numerous CTTT cases and the SP was ordered to pass resolutions to formalise the cemetery area as CTTT stated the area had never been formally approved.

The OC passed the resolutions but then the 3 owners whose units adjoined the cemetery area were  involved in several more CTTT matters in which they claimed they were disproportionately disadvantaged by the fact the OC could pass resolutions that put the cemetery next to their units. Ultimately CTTT allowed the cemetery to stay and bodies get buried between 5m and 30m from a unit boundary; even though the Council has a 100m setback rule.

It isn't garbage bins outside the window but the moral to the story is that in a strata plan the OC can pass motions that disproportionately disadvantage some owners and get away with it; CTTT cannot be relied on to correct these matters and District Court costs too much for many people.

You have a position to argue, as did the lot owners next to the cemetery but the OC can pass motion/s to create an area for the bins outside your window. If they do you may find you can win a CTTT battle but you may also find you can lose.

If there is good harmony in your block you should be able to negotiate a satisfactory outcome that suits everyone.

[Billen Ben]

I was feeling that the money was being spent because one of the funds was exhausted.
Jimmy T is right; my original post is about transferring money to make up a shortfall in one of the funds. This may not be the case as Jimmy notes.

[Billen Ben]

JimmyT said:

The Act doesn't say much about animals except that they can be removed from a building if they are causing a nuisance or health issues for a resident (I think). Stuff like being carried on common property is the domain of by-laws for individual buildings.

Don't know if you can blame the “carer”.  The dog's normal owners would probably recognise the signs that a) the dog needed to go walkies NOW!!! and b) it was already too late. Oops! 

But have you ever tried to stop a dog in mid-dump?

However, the dog-sitter is responsible for cleaning up the mess. Not necessarily their fault but definitely their problem.

The following is from Clover Moores' 2009 Strata discussion paper.
As can be seen the proposal is to make the culprit responsible due to the current inequitable situation where the OC pay for damage.
The full paper can be found HERE

Issue 4.3 Damage to Common Property
Owners Corporations pay for damage to common property, regardless who caused it. Where an owner or their occupant causes the damage, it is only fair that they cover the costs to fix it.
Proposal
° Introduce a provision that an owner or occupier should not cause damage to common property. If they do, they must pay and be responsible for fixing the damage.
° Introduce a provision that makes owners liable for the actions of their tenants where a tenant causes damage to common property.

[Billen Ben]

There are some rules; particularly if you are in a large SP (100+ units).
For normal SPs the following may assist. s68 and 71, parts 2 and 3, may be relevant.

It depends what fund the money was in originally as to which section applies and if it was replaced according to the requirement.

That the money was spent without anyone knowing is not a very transparent action; especially from an agent.

68   What money can be paid out of the administrative fund?

(1)  An owners corporation must not pay any money from its administrative fund except for the purpose of:

(a)  payments of the kind for which estimates have been made under section 75 (1), or

(b)  payments made in accordance with this Division on a distribution of a surplus in the fund, or

(c)  payments to a member of the executive committee in accordance with this Act, or

(d)  other payments in connection with carrying out its functions under this Act or the by-laws, except payments of a kind referred to in section 71 (1).

(2)  However, an owners corporation may pay money by transfer from its administrative fund to its sinking fund or by meeting from its administrative fund expenditure that should have been met from its sinking fund so long as the owners corporation complies with subsection (3).

(3)  The owners corporation must, not later than 3 months after the disbursement, make a determination under section 76 (1) of an amount sufficient to recoup the amount of the disbursement.

71   What money can be paid out of the sinking fund?

(1)  An owners corporation must not pay any money from its sinking fund except for the purpose of:

(a)  payments of the kind for which estimates have been made under section 75 (2), or

(b)  payments made in accordance with this Division on a distribution of a surplus in the fund.

(2)  However, an owners corporation may disburse money by transfer from its sinking fund to its administrative fund or by meeting from its sinking fund expenditure that should have been met from its administrative fund if the owners corporation complies with subsection (3).

(3)  The owners corporation must, not later than 3 months after the disbursement, make a determination under section 76 (1) of an amount sufficient to recoup the amount of the disbursement.

[Billen Ben]

I do not want to send you into shock but the Act requires the OC (the owners corporation) to maintain the common property.

My current understanding is that if someone “trashes” the common property and the offender will not do the right thing in the first place (i.e. take responsibility and fix things or pay for the cost to fix things) then it is upto the OC to repair / maintain the common property and then to seek reinbursement from the offender.

This can lead to costly legal battles that are often worth more than the repair or maintenance itself. Sometimes OCs just have to wear the cost of other peoples actions because the lack of decency of some people.

I understand this is one area of legislative reform that is in the mill. There are proposed changes to make the offender liable from the outset as the current situation, if i am correct in my understanding, can easily disadvantage an OC.

All i can suggest, if you want an immediate clean up, is that the OC pay to clean up the mess and send her the bill and hope she is decent enough to reimburse the OC.

[Billen Ben]

Can said:

Thanks for your information.

My block is 5 yrs old and the Owners Corp. about 2 yrs old. Being new in this type of situation, I have a few more questions.

1. An aircond. unit was installed on the roof prior to the setting of the Owners Corp. Based on Ben's information, what should the Owners Corp. do now?

Anything that is not a part of a unit forms common property. Based on the information given it sounds as if when the SP was registered the air con unit was a part of the common property and therefore the OC will “inherit” responsibility for the roof top air con unit.

Regarding the balcony. You should have a close inspection of your units plan that is registered with the Lands Office. It will hold the answer to who owns the balcony area; if it is on the plan (i.e. in your cubic space) then it is you otherwise it is the OC (common property).

[Billen Ben]

The simple answer is no. The longer answer is also no. It does not matter what the developer did when he built the block; it sets no precedent.

Why it is a big no?
You are dealing with common property and there is a process for actions that involve dealing with common property. The process is important because it “protects” the Owners Corporation from future responsibility for the changes

Division 4 Special provisions for by-laws conferring certain rights or privileges

51   Application of Division

(1)  This Division applies to a by-law conferring on the owner of a lot specified in the by-law, or the owners of several lots so specified:

(a)  a right of exclusive use and enjoyment of the whole or any specified part of the common property, or

(b)  special privileges in respect of the whole or any specified part of the common property (including, for example, a licence to use the whole or any specified part of the common property in a particular manner or for particular purposes),

Sections 52 and 53 also need to be read.

The owners who want air con or dishes should seek to have a by-law created giving them exclusive use / special privileged over the common property area where the installation will occur. The by-law would state the owners would be responsible for the maintenance and repair of the areas in question and the installed equipment, including cables, wiring etc.

If owners just start installing things without permission then the Owners Corporation may find itself, in the future, responsible for the upkeep and/or repair of any “illegal” equipment.

As can be seen the Owners Corporation can approve the work but the approval is via a special resolution motion at a general meeting and the resolution should place responsibility for maintenance and repair with the owners who are receiving the benefit. Anything less than that is not really adequate.

[Billen Ben]

An owner can request the item under s108 but that costs and it should only be necessary if the EC was refusing to be transparent. There is no real reason to withhold such information.

If the EC are not transparent enough to give you a copy, or post the monthly financial report on the noticeboard with the minutes of the meeting, then they are not a good EC.

The EC is under no obligation to hand out incoming correspondence, which may be what the EC classify the report as, but they cannot hide it in a s108 search so you should ask that the monthly report be attached to the minutes or you will consider making a s108 search and obtain them that way.

One search should get you well over a years worth of the report in the hour you will have and it will be a process that the agent will try to avoid in the future i.e. the agent would likely rather see you get a copy than bother them with a s108 search in future.

You, potentially, could amend the agents responsibilities and duties to include sending the monthly report to all owners or attaching any such report to the minutes.

If it is a small block then this will not see any significant extra cost, especially if it can be sent electronically.

There is no requirement, I can recall, to send the monthly financial reports to owners but no real reason to withhold them if an owner wants a copy.

If you are a small block then it seems excessive to get monthly reports – does the OC do a lot of transactions per month? If not consider cutting back on the reports (try quarterly) and save a few bucks.

SSMR 2010 FEES
9) For making records available for inspection under section 108 of the Act $30 and an additional $15 for each half-hour or part of half-hour after the first hour of inspection.

SSMA s108   Inspection of records of owners corporation

(1) Who may inspect records?
An owner, mortgagee or covenant chargee of a lot, or a person authorised by the owner, mortgagee or covenant chargee, may request the owners corporation to allow an inspection to be carried out under this section.

(2) Form of request
The request must be in writing and be accompanied by the fee prescribed by the regulations.

(3) Items to be made available for inspection
The owners corporation must make the following items available for inspection by the person who makes the request or the person’s agent:

(a)  the strata roll,

(b)  any records or documents required to be kept under Division 2,

(c)  the plans, specifications, certificates, diagrams and other documents required to be delivered to the owners corporation at its first annual general meeting by the original owner or lessor,

(d)  if in its custody or under its control, the certificate of title comprising the common property or, in the case of a leasehold strata scheme, the certificate of title for the lease of the common property,

(e)  the last financial statements prepared,

(f)  every current policy of insurance taken out by the owners corporation and the receipt for the premium last paid for each such policy,

(g)  any other record or document in the custody or under the control of the owners corporation,

(h)  if the duties of the owners corporation under this subsection have been delegated to a strata managing agent, such other records (including records of the strata managing agent) relating to the strata scheme as may be prescribed by the regulations,

(i)  if a caretaker agreement is in force or has been entered into but has not yet commenced, a copy of the caretaker agreement.

[Author]

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