[Cosmo]

nojay,

 

I agree with the general thrust of your post, as you point out “Since the trend these days is toward larger strata schemes in excess of 100 owners the role of the Caretaker cannot be taken too lightly.   “

 

However, any solution needs to recognise that especially for smaller OCs it would not be wise to legislatle, mandate or force OCs to have a hired, qualified Caretaker. Even for larger OCs an “opt out” provision would, in my view, be appropriate!

 

Many OCs do and are capable of looking after their own maintenance and this needs to be recognised. 

[Cosmo]

We now use EFT and Bpay rather than cheques. From the experience of our strata, I can say NO! It is not usual. Nor should you accept it. Our strata was charged $1 for every cheque we drew, we then changed to doing all our transactions on line and we now get no charges.

As I understand the current state of financial deregulation such fees and charges are up to each bank or financial institution.  If the fee is charged because you use a credit card and the fee is charged by the card company that is a different argument. 

Look around and negotiate with your financial institution.  We use a Building Society. All the executive has access to the account and each BPay or EFT has to be authorised electronically by two members of the executive. In terms of transparency and accountablity moving to electronic online transactions has been a real boon to our strata!

[Cosmo]

What I am little bit confused about and would like some opinion on is:

 

1. Whether an individual  by law has to be passed each time an owner changes common property?

 

or

 

2. Can a “cover all” by law be passed that makes owners (and future owners) liable for changes they made to common property? 

 

From reading this thread it appears the consensus view is that 1 applies but reading past statements made on this site I was of the view that 2 applied.  If 2 doesn’t and can’t be applied I would say the OC is in a very vunerable position.  What if an owner makes a change and the OC doesn’t know about it (which in many cases it can’t) and then maintenance is later required?

 

In practice if 1 is the case, surely it will in many cases (one reason being because of the expense) encourage a culture of owner’s not declaring changes.

[Cosmo]

aw, that depends upon what you mean by “appropriate consideration”.  Owners need to put an opposing view if they consider such a bylaw unfair. I would agree that the bylaw is aimed at imposing more responsibility on owners but is that necessarially a bad thing?

 

Our OC recently passed a bylaw making many things, that according to the memorandum put out by the Land and Property Office (AG520000 titled Defining who is responsible for items and areas in a Strata Scheme), an owner’s responsibility. We have done this for items that we consider are in the control of owners eg flyscreens and trees in courtyards.

 

I have no idea of the physical layout of your strata but if access to the balaconies is only available to owners of particular units, shouldn’t each owner bear responsibilty for the upkeep of ‘their’ balacony? That way each owner is encouraged to look after their ‘exclusive access’ balacony.  For example, one owner may use the balacony often while another hardly at all.  If I was an owner who hardly ever used my balacony I would feel a bit hardly done by an owner was using a disproportionate amount of OC funds to maintain their balacony just because they used it all the time.

 

One way or another all owners pay it is just, do we do it through levys?

[Cosmo]

Hi Jimmy, I had a read of the post including a reference to unauthorised sliding doors (post 7) and your suggestions (post 5) and was fascinated. Our OC has struggled with this issue and found no way to address it. Your posts make a very strong case for a bylaw and sets out a good method for protecting OC’s against unauthorized changes.

 

So if a strata enacts a bylaw that specifies that:

“owners are responsible for any unauthorized changes to common property, their repair and maintenance and the results of any damage done to common property and personal property as a result of the unauthorized work (and that) the responsibility passes to the next owner if the unit is sold”

 

Then responsibility and presumably expense passes to all future owners but in the absence of such a bylaw the responisbility and expense reverts to the OC.  Have I read this correctly?

 

 

And if I am drawing the correct conclusion what you are saying is a very strong case for a bylaw

[Cosmo]

I would have thought that the Strata Schemes Management Act 1996 already covers owners doing things that affect common property.

 

I realise that the issue of making ‘future’ owners liable is different but I would have thought if the ‘owner’ remains the same couldn’t action be taken against the owner on the basis they contravened sections 116 (Owners, occupiers and other persons not to interfere with structure of lot or services to lot) and/or sections 62 to 65C (MAINTENANCE, REPAIRS, ALTERATION AND USE OF COMMON PROPERTY AND FIRE SAFETY INSPECTIONS)  of the Act?  Wouldn’t an OC be able to seek damages/restitution that way? 

 

I am a big believer in the KISS prinicple (Keep It Simple Stupid).  The passing of numerous bylaws can make understanding and enforcing of bylaws a nightmare.  While I realise it is not always possible (smoking and parking bylaws being two example that spring to mind) it is better to operate on a few well understood and simple principles than have lots of unique bylaws.

 

I realise in practice every Strata Scheme has, according to it size and location/demographics, its own way of operating and therefore need for rules but sometimes it seems to me that OCs often feel the need to enact unique bylaws to solve problems without looking at the existing ones carefully enough.

[Cosmo]

I think Jimmy T’s reply went to heart of the issue when he said “Every owner is a member of the OC whether they want to be or not. Also, they are responsible, without limitation, for decisions that are made by the OC, whether or not they participated in that decision. The dept of fair trading web site at https://www.fairtrading.nsw.gov.au/Tenants_and_home_owners/Strata_schemes/The_owners_corporation/Executive_committee_of_the_owners_corporation.html says under ‘Effect of decisions’ – “Any decision made by the executive committee is treated as a decision of the owners corporation …. No individual executive committee member can make a decision for the owners corporation. In the event of a dispute between the owners corporation and its executive committee, the decision of the owners corporation prevails.” The relevant provisions appears to be sections 16 to 21 of the Strata Schemes Management Act 1996.

I was under the mistaken understanding that it is the EC members and not the OC members who could be sued if maintenance was not carried out.

There is, in practice, always a debate about whether maintenance is essential and urgent.  Some members saying it is and some saying it is not. As long as our EC can say if we get sued ALL Owners Corporation members get sued together I feel we are on much safer ground and non EC member of the OC will take issues more seriously.

While PeterC said “if you can’t form an EC” and Jimmy said “You can’t force people to join the EC” I still think having a bylaw (for a OC of less than 9) compelling all OC members to be EC members is an interesting concept and not prohibited by, or contrary to, any legislation. The advantage of having such a bylaw is that it avoids disputes, discussions and discretions re the composition and liabilities of EC members as opposed to OC members.

[Cosmo]

Our OC has an issue as to whether a bylaw we are proposing would be invalid because it could be seen as contraveing the Strata Schemes Managment Act. We are a small OC and feel that with the added responisbilities and potential legal liabilities on Executive Committee members we would like to compel all members of the OC to also be members of the EC.

 

Occassionally owners not on the EC will state that a certain item of maintenance needs to be done. Sometimes the OC does not have the funds but the owners not on the EC willl not endorse a special levy to get the maintenance done. It was then pointed out that if the maintenance is not done and someone sued  because of this lack of maintenance, it would be the EC members and not the OC members who would be sued.

 

The SSMA 1996 just says that (at s16) “An owners corporation must appoint an executive committee of the owners corporation in accordance with this Division”.

 

If we were to pass a bylaw to the effect that ‘all members of the OC are also members of the EC’ would that be a valid bylaw? Or can anyone see a problem with this?

[Cosmo]

Surely a valid lease gives a person a right to sole occupancy as such isn’t the act by the landlord illegal?  I think the lady should do the two things suggested ie install a camera and try a bit of diplomacy.

In theory it is easy to say just confront the landlord but in practice that can turn out badly without proof. If the lady has video proof it will help if things turn nasty.

Certainly the diplomacy route should be tried first and the angle of ‘safety conscious’ is a great way to broach this.

If the lady gets video evidence it should make her a lot more comfortable about asking for her rights to be protected.  She doesn’t have to use the video. Last time I checked it wasn’t illegal to video in your own house (which is what a lease means).

[Cosmo]

Thanks Jimmy, Your reply did clarify the issue at least for me. as I was getting a little bit confused from all the previous debate. Very well put and reduced to its essential elements. It would add some weight to any issues arising to have it formally adopted.

 

I am hoping that our strata will take this opportunity to register other by-laws at the same time so as to avoid costs. 

[Cosmo]

I have a view I want to express and put out there for feedback. Anjar made the initial comment “I have asked strata to clarify where this comes from, what legislation, etc. They told me to contact ISTM but ISTM are an industry group for Strata Managers and so won’t deal with me as I’m not one & so not a member.”. We have a similary issue at our strata, with a lot owner claiming that without formal ‘adoption’ the Memorandum has no authority.

Basically it appears Memorandum AG520000 titled “Defining_who_is_responsible_for_items_in_a_Strata_Scheme” was published by the Land and Property section of the NSW government in late 2011. It states that it can be used by both new and existing Strata Schemes. The Memorandum Memorandum was developed as an initiative of the Strata Industry Working Group (SIWG) which is hosted by LPI and includes representatives from industry and government who share an interest in the development and management of strata schemes. .

 

According to here at the LPI web site: https://www.lpi.nsw.gov.au/about_lpi/faqs/strata_scheme/How_can_an_Owners_Corporation_identify_common_property_in_a_strata_scheme a special resolution is needed to adopt the Memorandum.

 

However, if the Memorandum is not adopted, is it still authoritive? I would say that, in the absence of specific legislation or by-laws to the contrary, it is.

[Cosmo]

@sarahs said:
Cosmo, I’d be keen to know more about how you obtained the comparison figures if you can provide that information. I’m on an EC in a complex of 26 townhouses – no lifts or pool, but lots of common gatden areas and walkways. We often receive comments about the levies and it would be great to provide some comparative figures for the non-believers!

Sarahs, we just went to some people who we knew were owners of similar sized units and asked. Of the three we asked two were only too happy to let us look at the information that they had been supplied for their meetings. It didn’t really seem a big thing.

We realised there are differences in levys for reasons and had a look whether the differences be reconciled.  It wasn’t a perfect comparision but enough to shed a bit of light on the matter.

[Cosmo]

Our units had a similar problem a few years ago, although we are a much smaller complex. One of the things our OC did was to get comparision levys/charges for other stratas.  On that basis we went to the owners.  We presented the owners with a comparision of what 4 other strata were being charged and that way we showed that what we were being charged wasn’t excessive.

 

Also ask for a copy of the contract this new Strata Manager wants you to sign, as we found that on comparing contracts the prices weren’t that different.  Indeed some of the conditions the new SM wanted us to sign up to were quite constricting. 

[Cosmo]

@struggler said:

It reall would depend on what exactly your policy covers you for. For instance, does it cover landscaping?
When it comes to building, the price of a new home rarely reflects the actual cost. When you go to those display homes centres, the cost of building the new home often does not cover the exterior landscaping, driveways or even some of the features found on the inside. So if your insurance policy is for the rebuild of the actual structure only, then yes it would cost more to “complete” your complex to original should the unthinkable happen and the building was damaged to the extent you would need a rebuild.
The $500,000 more that your building is covered for is $125,000 per unit. It sometimes pays to look at extra costs by dividing by the number of units and see whether that cost is justified in that way. Check out your policy first and see what is covered.

Hi Struggler, As I said I have looked through the policy and the valuation, it appears that the valuation covers all that is needed. And my question was based on that.

Maybe in asking this question I am showing my extreme cyncism towards insurance companys but I just want to make sure that our OC is not caught out on a technicality or paying too high of a premium!

I accept that the specifics of any claim will depend upon the actual wording of the contract and you never usually exactly find out until you make a claim. But if we accept that it is a pretty standard contract are there any inherent risks associated with ‘over insuring’?

What I was after was a view on what are the risks associated with ‘over insuring’. For example, lets say as you point out ‘the worse happens’ or close to the worst say a claim for $1 milion dollars. Would the insurance company be entitled to scale back any payout because we were ‘over insuring’. I have been told companys do this for ‘under insuring’ eg saying you only insured for 75% of what you should have so we are only going to pay you 75% of any substantiated claim.

On the other hand if the insurance company is not entitled to adjust any claim the OC may be paying a higher premium than they have to. Which is just a waste of money.

Thanks

[Cosmo]

just an addition to the above.  I do the one for my owner's corporation.  I just use an Xcel spreadsheet.  It is quite easy actually. I am happy to provide you a copy of our spreadsheet if you want.

[Author]

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