[Casuarina]

Set out below is our by-law that was recommended to us by another user of this forum when I asked a similar question a few years ago. It was passed unanimously at an EGM and the roof of our four unit complex has since been divided into five equal zones for the benefit of each apartment owner and the common area electricity circuit. Under the same by-law, space has been allocated in the basement car park for batteries. Overall, a successful result with a better than forecast return on investment of over 12%. Here is the by law:

Special By‐Law: Equipment located on Common Property

Where a proprietor of a Lot desires to place equipment such as hot water, solar systems or air conditioning systems on the common property,

1) The proprietor(s) of the Lot concerned must apply for the works and be granted written consent by the Owners Corporation, and at its absolute discretion, prior to the commencement of any works.

2) All works must be completed by suitably qualified, licensed, and insured trades persons where required.

3) All works to be at the cost of the proprietor of the Lot concerned.

4) Where an air conditioning or hot water system is used it must be located in a position directed by the Executive Committee. The system must not interfere with the use of the common property by any other Lot owner or resident.

5) All pipework must be lagged and insulated in order to avoid any possibility of burning.

6) Where solar systems are used:

1. a) the costs of any works within the common property meter room and/or to the common property electrical distribution system as are required under any electrical regulation or standard are the absolute responsibility of the Proprietor/s concerned, and
2. b) all frames and solar panels used must be securely fastened to the common property and in the position approved by the Executive Committee, and
3. c) where required in that approval, the ability of the common property to support the load must be certified by an appropriately qualified person.

7) All pipework, wiring and electrical conduits must be installed/positioned and fastened neatly on the common property, and where any components of the installation such as but not limited to the equipment, pipework, and electrical conduit has, by necessity, to be placed in a position that is visible on the front façade of the property, those components must be suitably screened or concealed from view in the terms given in the Executive Committee’s approval.

8) Any damage to common property caused by the installation or ongoing use of the equipment must be rectified within 14 days of occurrence by the proprietor of the Lot concerned. Where the proprietor of the Lot/s concerned fails to rectify any damage the Owners Corporation shall be authorised by this Special By‐Law to have the work completed and charge any and all costs to the proprietor(s) concerned.

9) All costs of maintaining and/or replacing any and all components of any equipment including hot water, solar systems or air conditioning systems placed on common property under the provisions of this Special By‐Law are forever the absolute responsibility of the Proprietor/s concerned.

[Casuarina]

“You are not a big fan of accumulated sinking funds. Why?

…..a sinking fund can’t earn high returns.  And what you do earn is taxed.  And the tax advantage are extremely limited.”

I’m not sure that is correct, although it may be for a strata scheme that has a commercial component. But I believe that in a scheme where all units in the Strata are residential and not commercial then interest received from the Sinking Fund is exempt from tax.

Can you please confirm that this is true and, if so, correct the misleading statement above from this podcast?

[Casuarina]

Just to wrap up and report to anyone who may have been following our saga which was shaping up to be an interesting test case involving the validity of a limited pets by law

1. In a very small strata scheme
2. In an Over 55s development (average age of occupants -75)
3. Concerning an application to NCAT by a non-resident owner and
4. Involving no actual pet

Fortunately for the OC, the applicant withdrew a week before the NCAT directions hearing.

And no special levy was raised so there was no argument over whether everyone including the applicant had to pay.

Thanks for the advice above. Back to where we were – for now.

[Casuarina]

I’m confident enough to answer my own question now:

Yes, the applicant has to pay his share of a special levy. However, under Section 104 of the Act, if, and only if, he is successful, his contribution to legal fees must be refunded.

Does that sound right to you?

[Casuarina]

You were right Jimmy. Now we are off to NCAT – so my next question is about raising a special levy to fund the OC’s legal defence of the by law being challenged.

Does the applicant, who is an owner and a member of the OC, have to contribute to the costs of defending his own appeal? He claims to have advice from NSW Fair Trading that he is exempt. If this is correct, can you point me to the relevant section of the Act?

[Casuarina]

Sorry if I was not clear about the facts but the owner complaining did not buy into the scheme. He inherited it when his father (who voted for the by-law) passed away. He does not live there or intend to live there and is trying to sell it.

On advice from his real estate agent that most potential buyers (they say 50%) have cats or dogs, he asked to have the by-law changed to allow pets. When this was refused by a vote of 76% to 24%, he lodged an appeal with NCAT which has insisted on mediation as a precursor to any hearing.

We are currently preparing to attend mediation, a week before Christmas. The mood is not to compromise but hold firm as none of the residents wish to live with pets or the tension that a pet in the building will inevitably bring.

[Casuarina]

Thanks Jimmy-T. I have been following the Elan and Horizon cases and listening to you and Sue on the podcasts discussiing the issues.

But I think we have a different situation and wonder if you agree. Our by-law was proposed and passed unanimously by all four owner/occupiers in mid 2016. Then when all by-laws were required to be reviewed in 2017 it was again endorsed by a 100% vote.

At present, with one unit vacant following the death of the owner, the other three owner/ occupiers with 76% of the unit entitlements do not wish to live with pets and see no reason to change a by-law that is based on what was a model by-law prohibiting the keeping of animals (other than assistance animals) but watered down to allow birds, fish and, in an emergency, visiting animals overnight.

The recent finding by a Queensland magistrate supporting the rights of a small community to make whatever rules they choose to match their own lifestyles gives us comfort, as does the 55 page Horizon judgement that suggests that small strata schemes are in a different category.

However, at present it seems that every real estate agent is peddling the notion that a ‘no pets’ by-law is unconscionable and able to be overturned by application to NCAT. Are they right?

[Casuarina]

jacksonlyn18, what was the outcome of your experience at the tribunal? Did it settle at mediation? Or proceed to NCAT? If so, what was their decision?

We have a similar situation in our small NSW Over 55s strata block with one owner out of four who has inherited his unit from his father, is trying to sell it and wants to change the by-law prohibiting the keeping of any animals except assistance animals, fish or birds because he can’t find a buyer and says that the by-law is ‘not in line with modern standards or expectations’.

 

[Casuarina]

@JimmyT said:
If you haven’t already done so, you need to look at sections 142 -144 of the Act which, among other things, require the owners who are the beneficiaries of common property rights by-laws to agree in writing to their creation.

You should also take a close look at the responsibilities for repair and maintenance of the solar panels and the roof where they are installed.  For instance, you might want the owners corp to retain responsibility for the roof but the individual owners to have responsibility for their solar panels.

For completeness, and for the general information of other users of the forum, here is the text of the proposed common property rights by-law:

Special By‐Law: Equipment located on Common Property

Where a proprietor of a Lot desires to place equipment such as hot water, solar systems or air conditioning systems on the common property,

1) The proprietor(s) of the Lot concerned must apply for the works and be granted written consent by the Owners Corporation, and at its absolute discretion, prior to the commencement of any works.

2) All works must be completed by suitably qualified, licensed, and insured trades persons where required.

3) All works to be at the cost of the proprietor of the Lot concerned.

4) Where an air conditioning or hot water system is used it must be located in a position directed by the Executive Committee. The system must not interfere with the use of the common property by any other Lot owner or resident.

5) All pipework must be lagged and insulated in order to avoid any possibility of burning.

6) Where solar systems are used:

1. a) the costs of any works within the common property meter room and/or to the common property electrical distribution system as are required under any electrical regulation or standard are the absolute responsibility of the Proprietor/s concerned, and
2. b) all frames and solar panels used must be securely fastened to the common property and in the position approved by the Executive Committee, and
3. c) where required in that approval, the ability of the common property to support the load must be certified by an appropriately qualified person.

7) All pipework, wiring and electrical conduits must be installed/positioned and fastened neatly on the common property, and where any components of the installation such as but not limited to the equipment, pipework, and electrical conduit has, by necessity, to be placed in a position that is visible on the front façade of the property, those components must be suitably screened or concealed from view in the terms given in the Executive Committee’s approval.

8) Any damage to common property caused by the installation or ongoing use of the equipment must be rectified within 14 days of occurrence by the proprietor of the Lot concerned. Where the proprietor of the Lot/s concerned fails to rectify any damage the Owners Corporation shall be authorised by this Special By‐Law to have the work completed and charge any and all costs to the proprietor(s) concerned.

9) All costs of maintaining and/or replacing any and all components of any equipment including hot water, solar systems or air conditioning systems placed on common property under the provisions of this Special By‐Law are forever the absolute responsibility of the Proprietor/s concerned.

[Casuarina]

@JimmyT said:

You should also take a close look at the responsibilities for repair and maintenance of the solar panels and the roof where they are installed.  For instance, you might want the owners corp to retain responsibility for the roof but the individual owners to have responsibility for their solar panels.

Or you could have the OC install the entire array and find a way of charging owners for electricity they use.
 

With reference to the second option, there has been press coverage recently in the Sydney Morning Herald that caught my interest: https://www.domain.com.au/news/here-comes-the-sun-threestorey-apartment-block-installed-solar-panels-now-pays-half-the-energy-bills-20180427-h0z5iw/

It describes an installation at ‘Stucco’, a small 8 unit co-operative housing block in Sydney which converted the building into an “embedded network” whereby the building has a single grid connection and manages the metering and billing of units internally. The SMH article also refers to this as a ‘micro grid’. There is some better technical description at https://theconversation.com/get-in-on-the-ground-floor-how-apartments-can-join-the-solar-boom-79172

However, after following this up with the principal of SunTenants, the group responsible for this scheme, I learned that what doesn’t come out clearly in the press coverage is that the legal work required to get an exemption from the regulator and draft agreements for all of the parties participating in the scheme was horrendously expensive at $130,000. For them, as a pilot scheme this was covered by Gilbert and Tobin as pro bono work and by Sydney City Council with a special grant. And next time, one could expect it to be cheaper now that the precedent has been set.

But the clear advice from SunTenants was to keep it simple and continue down the path that we are on of separate, individual systems for our four apartments and another for the common area. 

[Casuarina]

OK. Thanks JimmyT. I am suitably chastened. With only four owners it should be easy to get each one to confirm in writing their agreement to the proposed new common property rights by-law prior to the AGM.

I am confident that the draft we have fulfills the other requirements of the Act.

Thanks for answering my question about process too. That will at least save me one step.

[Casuarina]

Geez, JimmyT. This question is not about solar systems or even the draft by-law which is essentially the one that was suggested by this forum two years ago and does, indeed include making individual owners responsible for their own panels.

It is simply whether a new by-law can be proposed at an AGM without having been first recommended by an Executive Committee.

I haven’t read sections 142-144 of the Act but if it requires the owners who are the beneficiaries of common property rights by-laws to agree in writing to their creation, then surely that is satisfied by the unanimous carriage of a motion at an AGM which is then properly recorded in the minutes circulated to all owners?

So, once again:

Is it necessary for the EC to propose a change in by-laws or can the Secretary (or any other owner) put forward a draft resolution to be added to the next AGM agenda?

And if this is OK, what is the notice period for having a draft resolution included in the AGM agenda?

[Casuarina]

The plan (which is generally supported by all four owners) is to install five separate PV solar systems. One for the common area power which would not require any change in by-laws and up to four for as many owners wish to install their own. The latter group require a by-law change which will allow the EC to approve the allocation of parts of the roof space (and other areas if batteries are added) for individual lot owners’ use.

My question is about process. Is it necessary for the EC to propose a change in by-laws or can the Secretary (or any other owner) put forward a draft resolution to be added to the next AGM agenda?

And if this is OK, what is the notice period for having a draft resolution included in the AGM agenda?

Once it is on the agenda, I am confident, given the general support for the solar proposal, that it will achieve 100% backing.

[Casuarina]

Thanks Lady Penelope! Very helpful information and much appreciated.

Casuarina

[Casuarina]

The deck and steps in question are wholly inside the exclusive use area. So from the above, the re-staining should be the responsibility of the lot owner with exclusive use. Thanks for clearing that up.

So what about the following maintenance responsibilities within and bordering the exclusive use area:

1. Fences on the property boundary within the exclusive use area requiring repainting?

2. Fence dividing one exclusive use area from another requiring repainting?

3. Fence dividing exclusive use area from common area requiring repainting?

4. Dwarf walls and retaining walls entirely within the exclusive use area requiring repainting?

5.External surface of building walls within the exclusive use area requiring repainting?

Is it only the last one that is the responsibility of the Owners Corporation?

[Author]

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