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The formula you are referring to was established in High Court ruling so it is pretty much the law. Nobody can force you to go down that route but it leaves you (collectively) open to a legal challenge if a current or future owners feels they have been dudded.
I thing the key word in all this is “agreed”. The physical costs of the renovation will be whatever they will be, as will the costs of architects, lawyers and surveyors. Now, what you have to get to is a “reasonable” figure for the increased value of the property.
To be fair, the renovators are benefitting in a way that will, over time, increase in value so they shouldn’t be looking for a free ride on this. On the other hand, it should be worth their while.
So how about including in the calculations something like an “agreed” fee for disruption of their lives. Something that at least 75 per cent of owners can agree on, so that you can move on and everybody in the building can benefit.
And on that note, don’t forget to look at redistributing the unit entitlements so the the improved units are paying more in levies.
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That’s a very good question and it’s one I asked recently, in light of the “embedded networks” scandals.
The simple answer is that this why the government brought in the one-year initial contract and three year maximum thereafter.
Look at it this way, how many existing apartment blocks are there, whose strata management contracts come up for renewal every three years, and how many new developments are there in any given three year period.
If a strata manager depends on new-builds for their work, they are going to go out of business the next time there’s a down-turn in new developments.
It’s a fine line but strata managers realise that if they get to the end of their first year contract and they’ve done nothing about defects, smart owners will replace them with someone who will do something in the 12 months they have left in which to register minor defect claims.
And don’t forget that it is a compulsory item on the initial AGM agenda that the Owners Corp considers hiring a surveyor to check for defects.
It’s a tricky one but good developers will hire good strata managers because they don’t want the hassles either.
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Have a look at Regulation 15 (3) here: The secretary MUST provide an electronic voting form with instruction on how to use it.
Your strata manager may be talking about schemes where there has not been a resolution to adopt electronic voting.
Anyway, the secretary and strata manager may be out of time if the have to get this to you within the seven days stipulated.
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The best response I’ve heard to the doorstop statement: “We’ve come to tell you about Jesus!” was “Oh, what has he done now?”
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The owner of the unit should pay the cost of the “broken” locks. The owner can try to get the money back from the tenants (good luck with that). The real estate agent’s opinion is irrelevant.
But what it comes down to is that lot owners are responsible for looking after common property within their lots, and for the behaviour of their guests and tenants. Send the owner the bill.
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It’s possible, but the onus would be on you to prove that a “reasonably foreseeable loss” had been suffered because the Owners Corp had failed to maintain and repair common property.
For instance, if you tell the OC that the corner of your ceiling is sagging and they do nothing, and then it caves in and destroys your TV, you could probably claim. Similarly, if you had reported a wet patch on your wall and they had done nothing, then a large amount of water burst through and flooded your flat, you could probably claim on that too.
But a pipe that bursts without warning, inside a wall where it can’t be seen … is that foreseeable?
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The “paper” meeting is a long-standing tradition in NSW strata which is probably on firmer legal grounds now that phone, online and electronic voting is allowed.
One issue that constantly comes up is the right of non-owners to attend the meeting – which they can’t do if there is no physical meeting. But being legalistic, if there is no physical meeting, then there is nothing for them to attend.
The problem with a paper meeting is that it precludes often valuable ideas from other residents who aren’t in the inner circle.
I would recommend, in the circumstances outlined above, that you hold a quarterly full strata committee meeting, but make sure all residents know what’s being discussed and what the outcomes of those discussions were (via an agenda and minutes) so that the troublemaker can’t claim impropriety.
And in the meantime get a set of standing orders, backed up by a by-law, so you at least have the means to put this disruptive person back in their box.If you want to be alerted when anyone replies to your posts or responds to this topic, please register and login, then you will be able to subscribe to the topic. The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers. NB: Longer threads may spill over to additional pages - look for the numbers on the bottom right, under the last post.
Patch wrote:
In theory Lot owners have rights to request information but in the real world the committee will never respond or address an issue if they have what might be perceived as a conflict of interest.How do you establish who owns the pump room ? And who decided on the level of compensation ?
There are so many possible angles you can take on this – and so many possible solutions – that you need to step back and assess what it is that you want and then what is the best way to achieve this.
Regarding who owns the pump room, that should be established by checking the original strata plan and then requesting copies of any documents showing the transfer of ownership (if they exist). These documents should be held by the strata manager.
Regarding the flaws in process, these can be remedied by having the by-law rescinded and/or having the treasurer/secretary removed from his position or from the committee entirely.
Here are some general observations and options for you to consider:
1. From what you say, the by-law was never valid to begin with because it was proposed by someone who did not have the right to do that. That’s a starting point but it doesn’t make the by-law automatically invalid if it hasn’t been challenged within a specific period. You might have to make that part of your challenge to the by-law as being unjust.
2. The secretary’s dealings with the owners corporation are not and can’t be “private”. As members of the OC, you and other owners are entitled to see every document that passes through as a record of the OC’s dealings with anyone about anything. Even “sealed” decisions of a court in relation of a case involving an owners corporation have to be available for viewing by OC members.
3. The secretary treasurer, in failing to run the scheme competently and within the parameters set down by the strata Act – especially regarding meetings, agendas and minutes – has rendered himself liable to removal on that basis alone.
4. The strata committee can replace the secretary or treasurer in those roles (but not as members of the committee) by a simple vote at the committee.
5. The Owners can remove the committee member – or the whole committee – by special resolution (75 percent of those voting) at a general meeting, either an EGM or AGM.
6. Any owner can apply to NCAT (via mediation at Fair Trading) for orders rescinding by-laws or removing committee members.
7. The ultimate, be careful what you wish for, option is to seek the appointment of a compulsory strata manager to take over the duties of the strata committee and the OC as a whole.
On the question of compensation, normally the committee would approach a couple of local estate agents and ask them for a valuation, averaging out the figures. No one should be plucking convenient figures (like the owner’s levies) out of thin air.
Finally, I think you need some level of professional advice and I recommend that you contact our sponsors, Strata Answers (click on the ad on the right) and they will advise you on what you can and can’t do, and the best way forward.
At the very least, it sounds like this committee member doesn’t know or care about strata law and is a bully – and that’s a very dangerous combination for any strata scheme.
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The key to this is whether or not the pump room and equipment is on common property or lot property.
If it has been placed on lot property (by some quirk) then the lot owner is entitled to claim compensation. The question then remains, is the amount claimed fair?
As a member of the owners corporation, you are entitled to view any documents that establish:
1. Who does the pump room belong to?
2. How did they establish the amount of compensation? Who assesses the value of the pump room?
This may be a way of correcting an error in the original strata plan. Or it may be a way of a multi-tasking committee member getting a backdoor payment for the work that they do.
Either way, it merits a polite request for the supporting paperwork, and a serious investigation if the paperwork doesn’t exist.
If there are no valid grounds for the by-law, you can seek orders invalidating it under Section 150 backdating it to its original date, and requiring the money to be repaid.
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You can set any time limit you wish but Section 232 of the Act specifies two months as the non-response time that triggers the potential for orders for not doing their job. Of course, if you have asked in writing before, or they respond earlier with a “no comment”, then that time scale will be shorter.
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You are right on your first point. Renting out designated visitor spaces would require council approval as it would (probably) be in breach of your Development Approval in terms of the number of required visitor spaces and a change of use as well.
In the unlikely event that council approved this, the money would go into the Admin fund. Any excess amounts could theoretically be disbursed to owners on the basis of unit entitlements but that would require a unanimous vote of owners. Otherwise it would be used to offset the running costs of the building.
And just as a general observation, unless you have a huge number of unused visitor parking spaces, this is a bad idea.
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Paying levies in advance may be the cleanest way to do this. The owners could pay the levies in advance and receive a statement from the treasurer/strata manager acknowledging this. Subsequently, each levies notice would contain the amount of the levies and a statement of the positive outstanding balance. However, you’d have to work out how long it would take to recoup the money by this method.
That said, a much better plan might be to get a short-term strata loan that could be paid off by a special levy at the next AGM. That, however, would require agreement at a general meeting.
And on that note, if you make this a private loan, make sure you don’t fall foul of Section 100 of the Act, which requires agreement at a General Meeting.
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Sir Humphrey is right. The formulation of your application to Fair Trading would be guided by what it is that you want, and for that you would have to address what it is that the strata committee has failed to do (in terms of the strata Act).
So make the request official – either through a “please explain” motion to the committee or a letter to the treasurer and then, if there is no adequate response, seek mediation under section 232(2) of the Act as a prerequisite for seeking orders at NCAT.
Just to be clear, the process at Fair Trading is entirely about mediation. They won’t make a ruling. For that you have to go to NCAT and for that you need to have tried mediation (in most cases).
Once you have been through mediation, your options range from getting an explanation to seeking orders to have the treasurer or the entire committee sacked.
Your reasons for seeking those orders could range from the committee’s failure to fulfil its duties (section 232) to the Treasurer’s failure to fulfil his in relation to record keeping, as outlined in Division 4 of the Act.
However, if you are alleging fraudulent activity, that is a police and not a strata matter, but you might gain valuable information by going through this process.
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Apart from misspelling “advice”, the strata manager’s response is correct. However, this is a bone of contention in many strata schemes and there are two things to remember.
1. The “who’s responsible …” memorandum is a guideline – it’s neither law nor a regulation unless it is adopted by the owners corporation in a by-law. It may, however, be reference in a claim.
2. Some insurers will pay out on claims made directly to them by the lot owner.
The strata manager is not wrong … but the memorandum may well be flawed. If the brakes on my car fail and it rolls over your garden gnomes, who is responsible? It’s an unforseeable accident but it’s my car and therefore my responsibility.
This is one of those grey areas between common law and strata law, and the latter is far from definitive.
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