[Billen Ben]

Is your agent is on crack? You do not have to pay. The Owners Corporation (OC) pays.

As you seem to be aware these matters are covered by Cl 31 of Sch 2 of the Strata Act. It is the OC's obligation to pay for the matter

It would be nice to ask the agent why he/she thinks you have to pay.

From the Urban dictionary : Are You On Crack? When someone says something that is either unbelievable or utterly foolish and stupid.

[Billen Ben]

Any pipe that is for the exclusive use of the lot, then if it breaks:
• Within the lot – Owners responsibility
• Outside the lot or in a wall, floor or ceiling that abuts to either common property or another lot – Owners Corporations responsibility.

The word breaks could be replaced by is defective and the outcome is still the same as to who is responsible. Although your pipe is not broken a leak does not change who is responsible.

Is the problem only in your water or do other units have the same issue?
Your water should not have a stain and if it is leaking then that would generally not cause a stain. If your water is stained then it sounds like some sort of contaminant is getting into the water; not water escaping.

Perhaps you should collect a bottle of the “stained” water for testing as this will help identify the contaminant and give an idea of possible sources for the “stain”. This should help find the problem, and a solution.

You need to determine if it is you or your owners corporation who is responsible, see that the responsible party takes action and ensure a competent professional finds the source of your problem and then solves your problem.

[Billen Ben]

webwrx said:

…….. I would have thought misleading the OC would be a serious matter.

You would be surprised at what is not considered a serious matter.
There are 3 general types of misrepresentation (misleading), innocent, negligent and fraudulent.
My EC are comfortable with all 3 types of misrepresentations. It is very common in the EC minutes and nobody seems to think that is serious.

It is not until the misleading material is hiding something that is itself a serious matter that notice is taken and even then the misleading material becomes somewhat inconsequential relative to the seriousness of the what it was the misleading material was hiding. It is as if misleading is fine.

[Billen Ben]

Hi easty;
That is beautiful; it is very, very nice and i applaud that you have shared that with us. A lovely system.

I really like the concept that owners should be able to access the information any time. I personally feel fees (s109 fees) for owners who want to see OC records should be abolished if the strata is self managed.

thank you for such a quality post

[Billen Ben]

struggler said:

In our complex, we have never had official positions.  Our SM told us this was OK that we didn't need to have someone to be the secretary, the treasurer etc.  We all shared these responsibilities.

This worked as we all have jobs, families and other committments.  I believe this shared responsibility kept everyone on the committee.  When someone got snowed under with their own personal life, the others would keep all running, as we were all in the loop.  This allowed us to go on long holidays, or even just take a month off from the running of the place.

The Act actually requires the Executive Committee at its first meeting to appoint a Secretary, Treasurer and Chair; section 18.

18   Executive committee to appoint chairperson, secretary and treasurer

(1)  The members of an executive committee must, at the first meeting of the executive committee after they assume office as members, appoint a chairperson, secretary and treasurer of the executive committee.

I'd keep an eye on what your SM tells you.
By failing to meet the requirement of s18 the EC leaves itself open to somebody commencing an application but if everybody is happy to breach the Act then who are outsiders to comment. If you have a more functional SP by being informal then well done.

[Billen Ben]

I would refer the readers to adjudication SCS 11/18269 (NOT AVAILABLE ON WEBSITES SO DON’T WASTE  YOUR TIME SEARCHING FOR IT).

A matter of a SP that has held its AGM outside the AGM period for the last 6 consecutive years. On three of those occasions the audit was more than two months old.

An order sought was that the OC be required to comply with the relevant sections of the Act in future.

All the AGM minutes were sent as evidence and the auditors reports that showed the dates were included. There was no doubt regarding the assertions being made in the application.

The slowness of the auditor in doing the audit annually leads to the AGM being late and half the time the audit is not back in time for it to comply with s106 of the Strata Act; i.e it gets presented more than 2 months after its preparation date.

CTTT dismissed the application essentially because “the audit was in the hands of a third party being the auditor” and the adjudicator acknowledged that “this may delay the date of the AGM”.

Late AGM's and out of date audits are not matters that warrant correction from CTTT. 

Orders genertally have a two year validity and so the sought order would have “forced” the OC to get its act together for the next two years. What was sought was not a remedy order but a preventative order. CTTT don't do preventative.

The obvious solution to the case above was to get another auditor; a concept the OC would not entertain. There was also the option of closing the books on the first day of the AGM period to give the auditor two extra weeks of time but this option still cut a fine line given the auditor generally takes 6-8 weeks. Changing the date of the AGM was not a solution in this case

As much as the Act says do this and do that; CTTT keep finding ways to excuse non-compliance.

Out of period AGM's …. let it go.

[Billen Ben]

Mr Strata said:

Hi all,

I believe that the answer is in the OH&S act/regs.

This act contains an obligation on the controller of a work place to make sure it is a safe work place. Effectively the common property of a strata scheme is deemed a work place, whether it is a residential building or commercial building.

It is the OC’s responsibility to be aware of a workplace risk and advise employees (contractors) of the risk, where it is and what to do with it.
…………

 

Mr Strata is absolutely correct and it is airborne asbestos that is really dangerous.
As Mr Strata points out; do not just shelf the report if there are asbestos issues. If the report has given your SP a clean bill of health then the SP has fulfilled its OH&S duty on the issue of asbestos.

If you have asbestos issues then talk about them and determine how to deal with the risks, budget for the solutions and pass resolutions to act.
Procrastination is not a good option if the report identifies issues.

[Billen Ben]

Hi webwrx
I did a CTTT application involving a large SP over spending a budget by over 50% and as far as I know no quotes were ever sought; the company just started work. The main beneficiary of the spending was a building company operated by the SP's Chair. CTTT did not raise an eyebrow. The spending requirements for large SP’s are very clear but this “little no no” was let go by CTTT.

There appears to be issues in your SP but OC's often get excused for most “oversights”; even significantly overspending a budget as long as it didn't cripple the finances.

If you make an application and it has the support of a majority of owners then you may have better luck than just pursuing the matter solo because you believe something dodgy went on but if majority of owners support pursuing the matter then you should not have trouble replacing the agent or getting an audit at the EGM.

CTTT accepts a certain level of errors; unfortunately the amount and type of errors is not published so who knows where the line in the sand is.

[Billen Ben]

This is from the OH & S Regulation 2001  HERE

51   Atmospheric contaminants—particular risk control measures(1)  An employer must ensure that no person at a place of work is exposed to an airborne concentration of an atmospheric contaminant that exceeds or breaches a standard referred to in or determined under subclause (2).

Maximum penalty: Level 4.

There are other sections that also seem relevant to strata living but what is clear is that an SP, as a part of risk management, should undertake an asbestos audit. There are new national guidelines that have different implementation requirements from State to State.

Given most SP's employ people to deal with maintenance and repair matters it would seem wise to have the audit done. Ignorance of asbestos is no defense if there is a problem in the future.

I would agree the matter could have been discussed or mentioned beforehand if the agent just acted without transparency — but if it is in the budget then sometime in the past it has been mentioned and the money approved for the report.

The agent has definitely acted in the Owner's interest. If legislation does not expressly require an audit then good risk management does.

Ask the agent which piece of legislation and post it on the forum for the benefit of all Flat-Chatters.

[Billen Ben]

JimmyT said:

At your next AGM there will be a standard motion intructing the EC not to discuss matters that the Owners Corporation don't want to have discussed.  This would be an opportunity to shut down the EC's option to decide not to follow the instructions of the OC.  But it does seem like your EC is making up the rules as they go along and, yet again, the CTTT decides to  enforce neither strata law nor the strata plan's by-laws. 

Unfortunately we do not have that particular motion even though it appears to be a compulsory motion (required by Sch 2 34(g)).

[Billen Ben]

JimmyT said:

By ‘biting the bullet” I meant get on with it and take action against defaulters – and deal with the pain that arises from that.  Had someone done that in your complex all those years ago, you wouldn’t be looking at time limits at all.

There have been efforts to “bite the bullet” for about 8 years. No one has had a real good go and there is always pain every time something is attempted.

Last year the AGM passed a motion, unopposed, to place the matter in the hands of an external agent to depersonalize the whole affair and have it dealt with by professionals. It seemed the bullet has been bitten.

Unfortunately the executive committee decided to not go down that path — and I am aware of s 21(4) of the Act relating to the pecking order of decisions. After the EC ignored the AGM motion that matter went to CTTT and the Owners Corporation (the EC who passed on the motion) convinced the adjudicator it had reduced the debt considerably without implementing the AGM motion. The adjudicator thus said there was no need for management to be put in place.

When the 2011 AGM was held, after the adjudication, the real picture was revealed. Levy defaulters were up, the debt had been reduced by less than $2k, there was an $18K deficit in the admin fund and a $8k+ loss of equity.

The financial management of the SP is dubious at best. The biggest disappointment is not the financial management, because these people don’t know what they are supposed to be doing and they do not care to know; the people are predictable. The big disappointment is that CTTT are no help with a long term problem that is not about to miraculously disappear.

[Billen Ben]

JimmyT said:

………..

Secondly, unpaid levies attract interest of 10 percent per annum and the costs associated with recovery of levies debts are sheeted back to the owners who are in default.

However, there are circumstances where people simply aren't able to pay special levies and for some the increased equity in their homes is meaningless since they have no intention of selling or refinancing. 

…………….

In the case of the “can't pay, won't pay” owners, you have to just bite the bullet.  At least when they are in arrears, owners can't vote at a general meeting – and that means they can't block decisions to get tough with non-payers.

One thing about biting the bullet is that an Owners Corporation (OC) can bite it for too long.
The Limitation Act 1969 at s14 seems to place a six year period on what can be claimed, i.e. if an owner has not payed, for example, for 12 years then the OC is only likely to get 6 of those years if they do decide to go after the defaulter.
Some of our 33% of defaulters are long term defaulters, long, long term defaulters. It is money that it is unlikely the OC will be able to recover.

[Billen Ben]

The Who's Responsibility document on the Institute of Strata Title Managers web site is again invaluable.
click  HERE

The document further confirms the quality of the advice given by Flat Chatters — The Plug & waste is within the airspace of the lot and therefore the responsibility of the Owner to repair and maintain.

[Billen Ben]

I would add one thing to Jimmy's list of don't.

If you do end up thinking CTTT is the answer then don't act alone; have people prepared to support the application.

If you act alone CTTT may see you as a loose cannon if the OC try to paint you as such.

A well stage coup is a better option than CTTT.

[Billen Ben]

RichardPhillipps said:

…….  If a strata manager’s failings are such that the management of the strata scheme is not functioning satisfactorily, then there is a procedure whereby you can apply to have a managing agent appointed by an adjudicator: see s162 of the strata schemes management act………..

It isn't as simple as being dysfunctional it must be SERIOUSLY DYSFUNCTIONAL.

Mortlock and Anor v Owners of Strata Plan No 55434  [2006] NSWSC 363 (3 May 2006)
“the tribunal must makes its determination based on objective considerations and there must be objective evidence that the management of the owners corporation is seriously dysfunctional (emphasis added) before the tribunal would be disposed to make such an order under section 162.” JUDGMENT OF: Associate Justice Harrison

The curious part of the Judge’s comment is that what constitutes seriously dysfunctional is never stated.

There is always inconsistent statements from CTTT such as:
“I consider the phrase “functioning satisfactorily” refers to the achievement of the scheme in meeting the requirements laid out in the relevant legislation. This does not have to be perfect although the management must strive to meet all legislative requirements – but that does not mean perfection.“
G Meadows Member CTTT  Burgess & Ors v Community Association of DP 270065 (Strata & Community Schemes) [2011] NSWCTTT 96 (16 March 2011)

From my experience the Treasurer needs to be sitting on a beach in Spain drinking cocktails after eloping with the Secretary before CTTT feel something is sufficiently wrong to use s162.
Seriously, it is not until the financial position of the Strata Plan (SP) is being seriously compromised OR the Owners Corporation (OC) is seriously neglecting its maintenance and repair obligations that CTTT consider s162. Apart from those two areas s162 applications rarely seem to succeed.

An OC can neglect so much of the Strata Act it is not funny; the idea an OC must strive to meet all its legislative requirements is rubbish. CTTT are not the strata police; there is no strata police and so an OC can essentially disregard all but the most critical aspects of the Strata Act before CTTT will take the management of the OC out of the hands of owners.

One reason why is;
The legislation has always envisaged that generally, strata schemes would be managed by ordinary lot owners for their own benefit.
J Bordon: Nulama Village P/L v Owners Strata Plan 61788 (Strata & Community Schemes) [2006] NSWCTTT 550 (25 September 2006)

The above case seems to be a principle etched in the minds of CTTT Members and the idea of taking the management of the OC out of the hands of owners, for up to 12 months, seems to be considered an extreme and radical step.

I do not subscribe to the theory that removing the owners from the management for such a short period of time is such an extreme step. Section 162 was included in the Act for a reason and I contend a part of that reason was that s162 was to be used as a corrective tool when the owners became “free spirits”.

 “The Owners Corporation is not a “free spirit” to do anything that comes into the collective heads of the lot owners. ….
J Smith Senior Member CTTT Lawson & Clarke v Owners Corporation SP 61788 (Strata & Community Schemes) [2011] NSWCTTT 270 (27 June 2011)

Section 162 applications are a messy business; you need objective evidence of “seriously dysfunctional” – whatever that is. The burden of proof can be difficult to meet.

Before embarking on a s162 application you really need to weigh up the chances of success. A lot more s162 applications fail than succeed.

[Author]

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