[Billen Ben]

Mr Strata said:

 

The issue you have is that if the ec are to enforce compliance with this by-law for one resident then they will need to take the same stance for all.

I really like this comment because we have a by-law in a large strata that possibly only 2 owners actually comply with. In the past the EC has occasionally sent a notice to comply relating to a breach but it has very much depended on who is complaining and who is the complaint against.

At the recent AGM the OC refused to delete the by-law thus indicating it is something they want to live under. Everyday there would be over 100 breaches of the by-law. It is a speed by-law.

So we have a by-law that virtually no one respect but the OC will not delete and it is a by-law that is selectively enforced.

Any suggestions?

[Billen Ben]

A strata managing agent is to be appointed by instrument (a management agreement) in writing authorised by a resolution (passing an ordinary resolution motion) at a general meeting (extra ordinary or annual general meeting) of the owners corporation.

This means the old agreement must be terminated, preferably by time rather than firing. If you fire the agent he/she may seek compensation for the duration of the unserved agreement period.

You will need to read your agreement to see the “exit” requirements. It should involve giving the agent notice that the SP seeks to not renew the agreement, i.e. terminate the agreement. There are some timeframes for giving of this notice in some agreements so you will need to read the agreement thoroughly.

To not renew or terminate the existing agreement will require a motion at a general meeting. This motion will need to pass by ordinary resolution.

A new agreement with the new agent will need to be established. To do this you should find a new agent willing to take on the role and place a motion on the agenda for a general meeting to accept the costs and terms of the new agreement. This motion will need to pass.

If an agent (the new agent) intends to act (or offers to act) for a principal in the management of property and is aware that another agent is or other agents are managing that property for the principal, the agent must, unless the principal otherwise directs in writing, disclose their intention to act or offer to act to the current agent or agents.

If you need to see records then the current agent can be nice and let you see them or you can access them by doing what is called a section 108 search.
Section 108 of the strata Act gives owners, or there nominee, the authority to request and see an extensive list of document. It costs money to do a s108 search ($30 for the first hour and $15 per half hour there after) and the request needs to be in writing, stating what you want to see and include the fee.

You will be able to get a copy of the strata role in one hour easily – that will have all the owners’ names and postal details. you will also have time to get a copy of the existing agency agreement. you may need to take your own copier if the agent doesn't want to play nice.

Then you can lobby all the owners.

So you need a new agent prepared to do the job, you need to know how to terminate the existing agreement; you need separate motions to terminate the existing agreement and adopt the new agreement. To do all this you may need to do a s108 search and get a copy of the strata role and current agreement.

If you need more information just post questions.

[Billen Ben]

Whale said:

I have a situation in our self-managed Plan where there is a leak inside an internal wall within a Lot, and where water from that leak is running down a wall cavity and into the Lot below.

It's only a leak (from a water pipe that services only the Lot concerned) and whilst it's by no means a torrent (yet), it is does need to be fixed and whilst the Property Manager is aware of the problem neither they nor the Proprietor is returning the E/C's phone calls.

The ISTM have a download called Who's Responsible.
You can find it here

This may help with how to approach the problem as it helps to identify who is responsible.

Normally burst pipes are the responsibility of the Owners Corporation. However, if a pipe is for the exclusive use of the lot, then if it bursts:
• Within the lot – Owners responsibility (e.g. pipe in an internal wall feeding the shower)
• Outside the lot – Owners Corporations responsibility (e.g. the lots hot water pipes but they are in the concrete floor)

[Billen Ben]

JimmyT said:

…… – if you get a pet in breach of what appears to be the by-laws, be prepared for some heartbreak if it turns out that those by-laws apply.

Absolutely right…. and the big grey areas are

1. will the Owners Corporation try to apply them,
2. can the Owners Corporation be egalitarian in there management
3. will CTTT actually apply them.

The whole thing is a circus that leaves owners with little clarity as to what to expect and the real kicker is that by-laws can change.

I do not think the range of choices of by-laws is too big an issue as it is a decision at registration time and then the owners can amend them in the future to better suit their needs.

For the benefit of the readers try this real life case; SCS 02/29788. An adjudication where an elderly EC member ignored the keeping of animals bylaw and got a dog.

The adjudicator allowed the dog to stay and suggested the Owners Corporation amend its prohibitive by-law.

The prohibitive by-law in that case was worthless.

For something a little fresher try SCS 10/40772: Tang v Owners Corporation SP 71379 (Strata and Community Schemes) [2011] NSWCTTT 160 (19 April 2011) CONSUMER, TRADER & TENANCY TRIBUNAL

The adjudicator decision was overturned on appeal and the dogs were allowed to stay. Still

I completely agree with the comments found elsewhere in the forum that it is not the pets by-laws that need to be strong; what needs to be strong is the by-law to deal with unruly, noisy or troublesome pets and their owners.

[Billen Ben]

villageidiot said:

Our strata plan has had a special by-law added to the standard by-laws to prevent owners or occupiers from keeping animals. It reads:

'No animals are permitted, with the exception of a guide dog or hearing dog'.

I can understand dogs can be a nuisance, but are there any avenues open for me to be able to keep an indoor cat in my lot? The cat would never leave my lot or set foot on common property.

What are my options?

Have a look at the posts under the topic “Pets Banned Mid Purchase”.
Especially have a look at the potential persuasive precedents from the High Court cases.

[Billen Ben]

The Strata Schemes Management Regulations 2010 have 6 sets of model by-laws depending on the situation;

Schedule 2 Model by-laws for residential strata schemes

Schedule 3 Model by-laws for retirement villages schemes

Schedule 4 Model by-laws for industrial schemes

Schedule 5 Model by-laws for hotel/resort schemes

Schedule 6 Model by-laws for commercial/retail schemes

Schedule 7 Model by-laws for mixed use schemes

The Schedule 2 by-laws are for residential strata schemes and by law 17 (not 16 as i misprinted in my earlier post) offers 3 options; A,B and C with C being the prohibitive, no pets, version.

The model by-law you quote is option A (of A,B and C) from Schedule 3 which is for retirement villages and is also option A for by-law 17 for residential strata in Schedule 2.

The whole Strata Schemes Management Regulations 2010 are here

The case from the Queensland Supreme Court has references to High Court cases. As Simone states “The decision refers to two High Court cases – Swan Hill v Bradbury and Brunswick v Stewart which also discuss the validity of prohibitory by-laws. “

It is the High Court content that is relevant regardless of what State one wants to wave it about in. The High Court cases were quite persuasive in the Queensland case.

It seems the High Court feel by-laws should be regulatory and not prohibitory – hence i wonder about the model by-laws having prohibitive options.

Are the model by-laws out of touch with the expectation of the High Court and so should the option be removed from the Regs?

Should existing prohibitive pets by-laws be open to challenge given by-laws are to be regulatory and some SP have changed them from regulatory to be prohibitive — or originally adopted a prohibitive approach?

[Billen Ben]

Simone said:

Dear Billin Ben

 

The Qld case of Mineralogy P/L v Body Corporate for the ‘The Lakes Coolum [2002] QCA 550 discusses the validity of by-laws that are prohibitory rather than regulatory. 

The decision refers to two High Court cases – Swan Hill v Bradbury and Brunswick v Stewart which also discuss the validity of prohibitory by-laws. 

 

https://www.austlii.edu.au/au/cases/qld/QCA/2002/550.html

 

Simone Balsara

Lawyer

 

TEYS Lawyers, The Strata Law Experts 02 9562 6500 – 1300 TEYSLAWYERS Suite 73, Lower Deck, Jones Bay Wharf 26-32 Pirrama Rd, Pyrmont NSW 2009

 

 

I have read the case and feel the decisions are saying by-laws are about regulation and not prohibition.

I am aware of the following:
“The scope and purpose of the Strata Schemes Management Act 1996 are clearly to do with regulating in a harmonious way the interests of those that live in the communal environment of a strata scheme.”
R Phillips:  Truran v Owners Corporation SP 22049 [2001] NSWSSB 12 (19 November 2001)
(This was a matter relating to the keeping of pets.

That makes me ask where does all that leave option C of by law 16 in the sch 2 model by-laws for residential strata shemes in the strata Regulations of 2010. The same prohibitory option appear inother model by-laws as well.

 

Option C Subject to section 49 (4) of the Act, an owner or occupier of a residential lot must not keep any animal on the lot or the common property.

The model by-laws offer a prohibitory by-law.

By offering a prohibitive option are the model by-law out of step with the expressed principle in the cases Simone references; i.e. that by-laws are about regulation?

[Billen Ben]

Ulverstone said:

Is there anything that can be done about EC members who never come to meetings? Basically, its yet again the decision of one person .

Possibly. There needs to be a quorum to hold an EC meeting. That is a quorum of people; not including nominee (“substitute”) EC members. If you have an absentee problem then do you actually have a quorum?

If EC members do not want to show up and are just nominating someone else to act for them then that nominee needs to have the consent of the EC. See clause 3 of schedule 3 of the Strata Act.

That means the EC meeting notice should contain a motion to accept the nominee. If there is no quorum in the first place then consent cannot be given.

If you have a quorum showing up in person then there isn't much can be done. If you have less than a quorum showing up with a handful authorisations to act on behalf of the absent EC members then there is no valid meeting because the nominees cannot be given consent – no quorum; no meeting.

[Billen Ben]

Thanks Mr Strata …great work. An amendment makes a postal vote a no vote.

That can work and as Mr Strata points out – it makes getting the agenda right important.

Just one other matter.

If there is postal voting and postal votes become no votes upon an amendment of a motion could a small group present at a meeting pass an amendment with the sole objective of failing a motion that would have passed unamended?

Consider: just over half of a quorum could still undermine a motion that would have passed unamended – if they wanted.
I’ll put some numbers on that .. if one quarter of people entitled to vote show up to an AGM  (a quorum) and they pass an amendment solely to make all postal votes no votes then just over one eight of owners entitled to vote on a motion could potentially bring down a motion by simply passing an amendment.

The current system is not great so perhaps postal voting is a better system even if the above was possible — smaller holes are an improvement.

[Billen Ben]

I got this off an ATO flyer I downloaded last year.

Strata Title Body Corporate
Instructions and tax return 2010
Strata title bodies corporate are treated as public companies. If your strata title body corporate has made a capital gain or a capital loss from a transaction in respect of all or part of the common property, the gain or loss is not included in the tax return for the body corporate. Each proprietor or unit owner must include their share of the capital gain or loss in their own tax return based on their proportion of the lot entitlements.

My SP claims exception by mutuality in our audit reports but at present there appears to be thousands of dollars of income every year but it does not appear that tax is paid on it. In fact over $10000 of non mutual income appears on the latest audit; last year it was closer to $20000.

The 2011 version of the flyer and tax form is here

It is quite interesting what the OC pays tax on and what the OC is supposed to tell owners is their share of taxable income which the owners are supposed to declare.
My self-managed SP has never informed owners of the taxable income they should be declaring that comes from non mutual income that the OC receives. Without doubt we have non mutual income that nobody is ever told what there share is.

IT2505 can be found here and it is rather long and seems a little complex.

It says things like; “In those States where the common property is vested in the proprietors, viz. Queensland, Victoria, Tasmania, Western Australia, or vested in the body corporate as agent for the proprietors, viz. New South Wales, the income derived from the use of the property constitutes assessable income of the individual proprietors….”

It is worth a read if you are a Secretary or Treasurer in a self-managed complex

[Billen Ben]

Hi Jen,
Mr Strata makes some good points. I would add that it may be useful to buy the Alex Ilkin Book “NSW Strata and Community Schemes Management and the Law 4th edition”. You can probably borrow it from the local library.

Read the book and ask yourselves what do you think you can do and what do you want the agent to do. The book will help with guidance on many matters.
The book isn't about dealing with specific issues but it helps with knowing what your responsibilities are and good management practices. It will help get you on the front foot.
The book has a lot of templates and is arguably the best reference on the market for novice strata owners.

[Billen Ben]

Thanks Jimmy,
I though as much with proxy votes.
I should have been clearer.  Say there is NO PROXY. If postal voting came in an owner can vote yes or no but what if the motion changes; for example an amendment at the meeting changes a budget item to a greater amount. Where does that leave the status of the postal vote?

The yes or no on the postal vote is for the motion as it appears on the agenda and not for the amended motion. In the case of postal votes how does it deal with changing motions?

I see postal voting as relying on the motion being determined as it appears on the agenda. Any resolved amendment creates a slightly different motion the postal voter has not given any consideration.

Motions that cannot be amended (except for typos or clerical errors) and postal voting; it is an idea worthy of discussion. How do people feel about having an agenda fixed to the point amendments are not allowed? It makes postal voting a viable option. It would probably lead to more conservative motions as well.

One good thing about postal voting is that voting could be expected to be more independent. Our AGMs are determined by proxies; as many others SP would also experience. At least the postal vote gives owners a chance to vote without the pressure of the dominant clique giving them the “death stare” for not being on some bandwagon.

Postal votes would also change the proxy hunters into vote hunters which is a much more difficult task across a whole agenda.

Anyway; my concern is amendments and postal votes. Change the motion by amendment and would the postal vote, which was for a motion that no longer exists, still be countable?

[Billen Ben]

JimmyT said:

Oblige owners corporations to enforce their own by-laws and demand executive committee office bearers  in large buildings either get strata law training or pay professionals to do the job for them.

And replace the CTTT with something that actually works.

I have been pushing compulsory management for large strata. Training will not help if the Executive Committee (EC) do not wish to implement what they learn.

This is not a case involving my Strata Plan (SP) but it shows how the collective can think that autonomy means “do as we please”.
“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)

At the very minimum the finances should be taken out of the hands of self managed large SP's as well as notices for meetings and minutes of meetings. AGM's should be Chaired by an external party with no connection to anyone at the SP, if that is possible.

I live in a large SP and we idiotically pay, via honorariums, so-called “volunteers” to do these tasks at a cost far greater than it is to have a good agency do the same tasks.  I love seeing a motion for management that costs $8500 defeated so we can pay imbeciles $11000 in honorariums, support and equipment to do the same job very poorly. It is brilliant.

The volunteers care little for compliance while an agent is, to a degree, compelled to be compliant. The volunteers wish to walk into a EC meeting and do as little as possible, except rain grief on those they do not like, and then go home and forget everything until next meeting. There really is no genuine commitment to the job.

Large SP's are 0.6% of all SP's; how many of the 0.6% large stratas are actually well managed by volunteers? I estimate next to none, if not none.

Annual OH&S reports should be made compulsory, a valuation every two years (not 5), fire safety inspections and plans, 10 year plans done by qualified people etc etc. Every important compulsory requirements needs to carry penalty points for any failure and it needs to be enforced — that takes CTTT out of the picture given they do not function.

If management is not compulsory then an extensive list of compulsory requirements that are to be carried out by a manager should exist and the left overs can be for those who still care to be on an EC to sit around and discuss over wine and cheese. No bull; our EC members get appearance (attendance) money and the meetings have food budgets.

All that EC's in large SP’s should be allowed to do is sit around and posture; which is what they tend to do anyway. If full compulsory management is not implemented then let the Kings and Queens of their little kingdoms keep their thrones but make sure that the real work gets done properly. Training will not guarantee that things get done, penalty points will.

As for CTTT … their strata division cannot be removed from their portfolio fast enough and the Minister and his Premier should both be besieged by the strata public to get on with it.

[Billen Ben]

Hi Jimmy,
I am curious about the idea of issue based postal voting.

At our AGMs amendments are common from those present in person.
I have seen an AGM notice from a management group in Tweed who send out agendas with a yes/no option for each motion and this is for people who give the agent their proxy. When i saw that notice i wondered what happens if an amendment occurs – there is no instructuion.

Can you give me an idea of how the postal vote concept operates, particularly if the physical meeting amends a motion. A motion can morph a fair distance and still maintain its fundamental essence but the morph may be enough for some people to go from yes to no or vice-versa.

If the whole meeting was simply voting for the motions as submitted then everything is a simple yes or no. If there are issue by issue postal votes then where does it leave the concept of amenedments.

How does postal voting work if the amendments are still to be allowed?

[Billen Ben]

It never ceases to amaze me how my SP seems to be able to up the stakes when it comes to being autonomy gone mad.
At the recent AGM the self-managed SP decided to include a motion to allow the OC to charge owners for debt recover.

From our the Debt Recovery Policy:
Pursuant to s80 of the Strata Management Act the OC will charge directly the lot owner in arrears the following fees:

Three month overdue notice   $70
Letter of Demand                  $100
Statement of Claim                Fees to be advised by the debt collector

This is in a self managed OC and the notices and letters would be coming from the Treasurer; not some outside agent.
First thing to note is that section 80 of the Strata Schemes Management Act (SSMA) allows the Owners Corporation to recover incurred expenses. It does not allow the OC to set its own table of fees.

The policy then waffles on but has other highlights such as “The Executive Committee Treasurer may make demands, engage the services of a debt collection agency or commercial agent, instruct lawyers, and commence and prosecute legal proceedings”

My SP has a significant levy in arrears problem. 25% of owners do not pay their levy and there has been a 20 year unwritten policy not to pursue debt.

Such quotes as the following can be found in CTTT files:
53. “It is the function of an Owners Corporation of a strata scheme under the Act to take responsibility for the repair and maintenance of the common property, to manage the financial affairs of the Owners Corporation, to collect the levies and to pay the legitimate expenses of the Owners Corporation and to arrange and conduct meetings in accordance with the Act.”
J Smith Senior Member CTTT Lawson & Clarke v Owners Corporation SP 61788 (Strata & Community Schemes) [2011] NSWCTTT 270 (27 June 2011)

Last year the EC blew off an AGM resolution to engage an agent. In a nutshell a non-owner (but mover and shaker) rang the agent and said his services will not be needed. The EC then just walked away from the AGM motion to engage the agent. It was unbelievable.

It is one thing for “professionals” to sting owners and that is an area in need of reform but when the owners start endorsing stinging each other then what can be said.
Stay financial – stay in credit.

[Author]

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