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If the strata manager has breached the terms of your agreement (with them) and this is not an emergency, and there is a cost attached to halting the work, you may be liable as they were acting on your behalf but then you can try to recover the money from them because they were acting without proper authority.
Remember that, apart from insurances, the strata manager is not legally obliged to get more than one quote unless specifically instructed to do so or if your scheme is “large” (more than 100 units) and the cost exceeds by more than 10 percent what has been budgeted for in the annual financial plan.
And I have just realised you are in Canberra … maybe PeterC can offer more accurate advice.
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A further point and a reminder of how important it is to keep telling people who refuse to listen what they should and shouldn’t be doing.
Firstly, Section 26 of the Act (below) restricts the powers of initial owners (developers) and, significantly, allows the Owners Corporation to recover from any debts that were wrongly incurred before the first AGM. It also allows for damages claims against the initial owner as well as the legal costs incurred in recovering debts and damages.
However, there is a potential get-out clause in Section 26 (4)(a) if the initial owner says they weren’t aware that they were breaching the law. That’s why it’s important to keep writing letters telling them how and why they are in breach and demanding that they communicate in writing with you.
At the very least, I would be pointing out that they:
a. shouldn’t be charging for the water apart from in proportion to levies related to unit entitlements
b. shouldn’t be charging a special levy for lift repairs that surely must come under a warranty and, if not, should be paying the bills himself
c. shouldn’t be issuing contracts that go beyond the first AGM
d. shouldn’t be adjusting levies from the amount agreed at sale. See Section 89 (below) – it gives owners three years in which to claim back additional levies payments incurred because the initial estimates were too low and/or not properly calculated.
By the way, for the purposes of Section 26, until the first AGM the initial owner or developer is considered to be acting as the Owners Corporation.
In this case, I would be writing to the developer (collectively) with a copy of Section 26 below, warning him that unless he starts complying with the law immediately, when the unit owners take over the running of the building at the AGM, you will be seeking repayment of all debts plus damages from loss of amenity (lights and lifts), plus levy overpayments, plus full legal costs incurred in so doing.
26. Restrictions on powers of owners corporation during initial period
(1) An owners corporation for a strata scheme must not, during the initial period, do any of the following things unless the owners corporation is authorised to do so by an order of the Tribunal under this Division:- alter any common property or erect any structure on the common property otherwise than in accordance with a strata development contract,
- incur a debt for an amount that exceeds the amount then available for repayment of the debt from its administrative fund or its capital works fund,
- appoint a strata managing agent or a building manager or other person to assist it in the management or control of use of the common property, or the maintenance or repair of the common property, for a period extending beyond the holding of the first annual general meeting of the owners corporation,
- borrow money or give securities.
(2) An owners corporation may recover from the original owner:
- as a debt, any amount for which the owners corporation is liable because of a contravention of subsection (1) (b), together with the expenses of the owners corporation incurred in recovering that amount, and
- as damages for breach of statutory duty, any loss suffered by the owners corporation as a result of any other contravention of this section.
(3) An owner may recover, as damages for breach of statutory duty, any loss that has been suffered by the owner as a result of a contravention of this section (other than subsection (1) (b)).
(4) It is a defence to an action under this section in debt or for damages if it is proved that the original owner:
- did not know of the contravention on which the action is based, or
- was not in a position to influence the conduct of the owners corporation in relation to the contravention, or
- used due diligence to prevent the contravention.
(5) A remedy available under this section does not affect any other remedy.
89 Order requiring original owner to pay compensation for inadequate estimates and levies
(1) The Tribunal may, on application by the owners corporation for or an owner of a lot in the strata scheme, order the original owner of the strata scheme to pay compensation to the owners corporation if the Tribunal determines that the estimates and levies determined during the initial period for the purposes of determining and meeting expenditures relating to the scheme were inadequate to meet the actual or expected expenditures of the owners corporation.
(2) The Tribunal must not make an order under this section if the original owner satisfies the Tribunal that the original owner used due care and diligence in determining the estimates and levies.
(3) An application under this section must be made not later than 3 years after the end of the initial period.
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PS is right. For the record, however, it is worth noting that had proper notice not been given, an owner still has to apply to have the decision overturned, do so within 28 days, and show that the failure to give proper notification made the difference between the motion being passed and not being passed. (See relevant extract from section 25 below).
There is no automatic revocation of improperly passed motions if the failure to follow correct procedure is noted at a later date.
25 Order where voting rights denied or due notice of item of business not given
(1) The Tribunal may, on application by a person entitled to vote on a motion for a resolution of an owners corporation at a general meeting, order that a resolution passed at the general meeting be treated as a nullity on and from the date of the order.
(2) The Tribunal must not make the order unless the Tribunal is satisfied that the resolution would not have been passed but for the fact that the applicant for the order:
- was improperly denied a vote on the motion for the resolution, or
- was not given due notice of the item of business in relation to which the resolution was passed.
(3) An application for an order may not be made unless:
- an application for mediation of the dispute was made not later than 28 days after the date of the meeting at which the resolution was passed, or
- if an application for mediation was not made, the application for the order was made not later than 28 days after the date of the meeting at which the resolution was passed.
(4) If a resolution that is to be treated as a nullity by an order changes the by-laws and the order has been recorded in the Register under this Act, the by-laws have force and effect on and from the date the order is so recorded to the same extent as they would have had if the change had not been made.
(5) Subsection (4) is subject to the by-laws having been or being changed in accordance with this Act and to any relevant order made by a superior court.
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@lefty said:
Thanks, Jimmy, for your reply in your Xmas haze! I would be interested to hear if there is actual legislation dealing with use of a garage.OK, the legislation I found simply says that utility lots may not be used for occupation.
However, storage of goods in garages may have an impact on the lot owners home and contents insurance (they are probably not covered) and the strata insurance (they may be an additional hazard and obstruct fire safety installations like sprinklers). If they cause strata insurance to be increased, you can charge the lot owner for the added premium.
Most significantly, councils include parking allocations as part of their development applications in line with Roads and Maritime Services guidelines which take into account traffic flows to, from and around strata schemes and other developments. The general thrust of their guidelines is to get cars off the street and into the development, if at all possible.
So the issue here is whatever it says in your DA and if the garages are designated for cars, that’s what they must be used for or you risk having council inspectors coming round and ordering you to clear out the garage. This is the same principle that means you can’t re-allocate visitor parking to individual owners. You would be in breach of your DA.
So, in this case, if chummy gets bolshie and wants to exercise his “right” to park on common property, ask him if he has council permission for the change of use of the garage from how it is designated on the plan. And point out that there may be insurance issues for him personally and for the owners corp. That should put his gas on a peep.
By the way, the SC’s approval of the use of common property for extra parking complies with the RMS ambition to keep cars off the street but may breach its targets for the number of cars per dwelling.
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Well, when considering legal advice, let’s not go past our sponsors Sachs Gerace Broome who have a stack of experience in this area.
I think you have to be very careful how you go about the process becasue the clock statrts ticking on defects as soon as you identify them and if you leave it too long you could be out of time.
My advice would be a much shorter check-list.
1. Have an initial survey of defects made to see how serious they are
2. Hold a general meeting or add an item to your AGM to approve expenditure on legals and further inspections.
3. Appoint an experienced and reliable strata lawyer or building surveyor to manage your claims.
Be careful of builders patching defects or partial solutions as once work has been started it can be hard to claim further defects that are revealed.
This is an area for experts and the sooner you get them involved – even if it’s to give your block a clean bill of health – the better.
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I am sure there is a provision in NSW planning laws that says garages can only be used for parking cars if that is how they are designated on the plans. So check your DA and if the garages are clearly marked as suche, tell you neighbour that if they want to press this issue, they may end up having to take their junk out of the garage.
I’ll try to check this legislation when my Christmas cheer has worn off.
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It is impossible to predict the decisions made by NCAT as they are individuals who bring their own biases and prejudices to the issues.
However, I would argue that a blatant disregard for the by-laws established to regulate the keeping of pets would be a reasonable reason for refusing, on the grounds that they have shown that they are irresponsible pet owners, regardless of the nature or behaviour of the pets concerned.
Playing devils advocate, if I were representing the tenants, I would argue that in the absence of any demonstrably negative consequences of having these pets in the scheme, then any refusal was unreasonable.
If you can marry the two – they didn’t obey the by-laws and the pets have been proved to be a nuisance – then you would probably win.
That said, there is a whiff of trying to find some way – any way – of dealing with nuisance tenants in this and that is something you need to steer clear of as it can only go against you at the Tribunal.
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The Minister’s office, the Fair Trading Commissioner and the head of mediation services at Fair Trading have all been alerted.
At the very worst, if Chummy fails to play by the rules and continues his ridiculous, ignorant, bullying behaviour, he should find himself at the wrong end of a number of Section 232 rulings to rescind the decisions of the AGM, repay the money and hand control of the strata scheme to an NCAT-appointed manager.
If any of that doesn’t occur, it will blow a hole in the new strata laws and that will be a whole other story.
2017 is going to be very interesting in your neck of the woods.
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@hammer66 said:
I may be a bit naive but it is bizarre that an issue that should have unanimous approval becomes a complex issue with individuals being obstructive and more concerned about their own liability and well being than those less fortunate.
Obstructive members of strata committees fall into five main categories.
1. This is going to cost us money and is of no direct benefit to me so I will object.
2. This was not my idea therefore it has no merit.
3. I live in fear of imaginary litigants who will sue me/us if we make a bad decision so we we will make no decision (even though that is often the worst decision of all).
4. Some owners may not like this and, if they find out I agreed, they might not vote for me at the next AGM and that would be a disaster because I don’t actually do anything to merit anyone’s support.
5. It’s different. Different is bad. Change is bad. Progress is not permitted. The status quo must be maintained at all costs (and preferably at none).
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However strongly I personally feel about something and however strident my comments, to maintain some emblance of objectivity, I have to be wary of overtly campaigning for or against anything.
However, I am happy to point readers of my column and this website in the direction of change.org and freely allow readers to quote my comments and reprint my articles to support their case.
In any case, airbnb thinks I am campaigning against them because, they say, I have written 22 articles critical of them in the past year or two – and you can find most of them HERE, or HERE.
Or you could just search this website which has, I think, nearly all of the past nearly 600 Flat Chat columns tucked away somewhere in its archives.
Our problem is that our politicians a) really don’t understand the fragile relationships in strata living and b) don’t really care.
I find it incredible that in the modern world, the way you change the law is to persuade enough people to break it (by allowing them to make money).
Watch out for my upcoming article on 10 not very legal ways to keep short-stay lets out of your building.
Hey, what’s sauce for the goose… and on that note, Merry Christmas.
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Unless your by-laws state otherwise, if the wall is on the inside of an external wall or a common property wall, it and the tiles fixed to it are the Owners Corp responsibility. If the wall is internal – ie, the other side is inside your flat – the responsibility is yours.
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The legislation that DOES apply is the anti-discrimination law and there seems to be an awareness of that in the response.
They aren’t saying you can’t have a ramp (that would be discriminatory) but they are saying you can have one with attached conditions.
The question is, are those conditions excessively onerous (and therefore discriminatory) and I am not in a position to answer that. Perhaps a good place to start could be this website run by Family and Community Services.
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Yes to all of the above.
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This is getting more complicated than it needs to. If he has support from other owners, then you should get one of them to nominate him for election to the committee. There is no need for him to be there as your proxy. Candidacy for the committee is another matter entirely.
However, people can’t be nominated for election to the committee by someone who is standing for election themselves. Assuming you are standing for election again, get someone who isn’t standing for election to nominate him. That would be better as it would show that his candidacy has broader support and isn’t a power-grab by related individuals.
Once you are both elected to the committee you can nominate him for election as an office-bearer.
Download a copy of Strata Living – the NSW Fair Trading handbook as it explains a lot of this in simple terms.
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@Waratah said:
When I requested a copy of a report recently prepared that EC minutes suggested would set out a comprehensive program of building works, the Owners Corporation declined to provide it and I was advised that they are not required to provide it.
The Owners Corp is required to provide reports when owners ask for them. It is possible that the only reason you are not being allowed to see it is that the vendor doesn’t want you to.
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