[Jimmy-T]

No, this is not legal.  The contract has to be agreed at a general meeting.  This has not happened.

So tell the strata manager that the contract is not valid and if they persist you will raise the issue with Strata Community Australia and Fair Trading as well as pursuing it at NCAT.  If they don’t want to lose their licence as well as their reputation, they should behave.

And tell the former chair to back off too, or risk being sued for any costs the owners corp accrues in rectifying their illegal moves.

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[Jimmy-T]

I think there is enough dubiety in this election to question its validity (especially since they clearly structured the nominations deliberately to circumvent the law).

I would first of all check who nominated whom, then check if they are actual nominees and if there was any cross-nomination.  People standing for election can’t nominate each other, for instance. And owners who are not standing for election can only nominate one person (per lot that they own). Have a look at 31(1)(c), 31 (3) and 31(4) and  32(b) below.

Then consider taking action at NCAT under the terms of Section 24 (2) (below) to have another election held.  The obvious fact there has been attempt to circumvent the Act, in a way that subverts the spirit of the Act, is probably not enough to have a new election called but I would be surprised if there wasn’t something technically deficient in the way they did this that renders the election invalid.

24 Order invalidating resolution of owners corporation
(1) The Tribunal may, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation if the Tribunal considers that the provisions of this Act or the regulations have not been complied with in relation to the meeting.
(2) The Tribunal may, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation if the Tribunal considers that the provisions of Part 10 (other than Division 6 or 7) of the Strata Schemes 

 

31. Persons who are eligible to be appointed or elected to strata committee
(1) The following persons are eligible for appointment or election to the strata committee of an owners corporation:

(a) an individual who is a sole owner of a lot in the strata scheme,
(b) a company nominee of a corporation that is a sole owner of a lot in the strata scheme,
(c) an individual who is a co-owner of a lot or a company nominee of a corporation that is a co-owner of a lot in the strata scheme, if the person is nominated for election by an owner who is not a co-owner of the lot or by a co-owner of the lot who is not a candidate for election as a member, 
(d) an individual who is not an owner of a lot in the strata scheme, if the person is nominated for election by an owner of a lot who is not a member, or is not seeking election as a member, of the strata committee.

(2) To avoid doubt, an individual who is a sole owner of a lot may nominate himself or herself, and an owner that is a corporation may nominate the corporation’s company nominee, for election as a member of the strata committee.
(3) A sole owner of a lot in a strata scheme may not nominate more than one person for election as a member of the strata committee, except as provided by subsection (5).
(4) Only one co-owner (including a company nominee of a co-owner) of the same lot may be a member of a strata committee at the same time, except as provided by subsection (5).
(5) A person who is an owner of more than one lot in the strata scheme may nominate one person for election as a member of the strata committee for each lot for which the person is an owner.

 

32 Persons who are not eligible to be appointed or elected to strata committee
(1) The following persons are not eligible for appointment or election to a strata committee or to act as members of a strata committee unless they are also the owners of lots in the strata scheme:
(a) the building manager for the strata scheme,
(b) a person who acts as an agent for the leasing of a lot or lots in the strata scheme to tenants,
(c) a person who is connected with the original owner of the strata scheme or the building manager for the scheme, unless the person discloses that connection at the meeting at which the election is held and before the election is held or before the person is appointed to act as a member,
(d) any other person prescribed by the regulations for the purposes of this section.
(2) An owner of a lot in a strata scheme who was an unfinancial owner at the date notice was given of the meeting at which the election of a strata committee is to be held and who did not pay the amounts owing by the owner before the meeting is not eligible for appointment or election to the strata committee.
(3) A person who becomes ineligible for appointment or election to a strata committee after being appointed or elected to the strata committee must disclose that fact to the secretary or chairperson of the owners corporation as soon as possible after becoming aware of that fact.
(4) A disclosure by a person under this section, other than a disclosure that is made at a meeting of an owners corporation or strata committee, is to be made by written notice given to the secretary or chairperson.

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[Jimmy-T]

First of all, what do your by-laws say?  If they say no parking on common property without the written permission etc etc, how hard would it be for your neighbours to get written permission?

Secondly, this is something you should politely raise with your landlord and tell them you are being denied the full use of your garage by the other owners.  If they refuse to do anything about it, ask for a reduction in rent.

If the landlord gets sniffy about it, point out this is a problem they are going to have with any tenant who expects full use of the garage.  You are not the problem, it’s your selfish neighbours.

If they are using their garages for storage, so can’t park in them, point out that this is illegal under council laws.  Otherwise basic respect for other people should prompt them to put their cars in the garages where they belong.

Re car washing – that is “standing” not parking  – there is a big difference, not least that you are there to move the car if anyone needs to get past.

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[Jimmy-T]

Every scheme has its own by-laws and they are the only ones that are relevant to that scheme, however, for the record, here. below are the relevant model (optional) by-laws for new schemes and the mandatory by-laws for pre-1996 schemes.  In the latter case, these model by-laws apply unless there is a different by-law in place, covering the same topic.

By-laws for new schemes

8 Children playing on common property
(1)Any child for whom an owner or occupier of a lot is responsible may play on any area of the common property that is designated by the owners corporation for that purpose but may only use an area designated for swimming while under adult supervision.
(2)An owner or occupier of a lot must not permit any child for whom the owner or occupier is responsible, unless accompanied by an adult exercising effective control, to be or remain on common property that is a laundry, car parking area or other area of possible danger or hazard to children.

By-laws for pre-1996 schemes

7 Children playing on common property in building
An owner or occupier of a lot must not permit any child of whom the owner or occupier has control to play on common property within the building or, unless accompanied by an adult exercising effective control, to be or to remain on common property comprising a laundry, car parking area or other area of possible danger or hazard to children.
Note. This by-law was previously by-law 18 in Schedule 1 to the Strata Schemes (Freehold Development) Act 1973 and by-law 19 in Schedule 3 to the Strata Schemes (Leasehold Development) Act 1986.

As to the question, what by-law says a lawn isn’t dangerous, the question really is, ‘who says it is?’ If you want to ban children from playing unsupervised on a lawn then pass a by-law saying that.  There are other by-laws about noise and behaviour that might be more relevant in the circumstances described above.

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[Jimmy-T]

I wish my levies were $500 a year.

The law also allows you to discount levies paid on or before the due date, so the late payer would get a double whammy.

Say you budget needs X amount a year, you set the budget at X plus 5% for contingencies but discount 5 percent for prompt payment.  Of course, you add 10 percent for late payment.

It soon adds up and gives you a buffer so that you aren’t always chasing money from people who can’t organise their finances.

And don’t forget the other disincentive for late payers is that they can’t vote at general meetings.

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[Jimmy-T]

I have a very low threshold of pain when it comes to legal discussions but the key word here is “abandoned”.

How do we define “abandoned” in this regard?  According to the regulations it’s a vehicle that has been left where it shouldn’t be, for more than five days, with a removal notice stuck to it, which has been ignored.

That, to me is the end of the argument.  However, there is another aspect of this.  If we as owners allow ourselves to be hamstrung by what we think something might mean, we can never get on with the practicalities of running our buildings for the greater good of the majority of residents.

What would happen if you followed the procedure and removed the vehicle to the street or some waste ground or whatever and the owner came back and said “I PARKED that illegally on common property – but I didn’t ABANDON it”?

Would they and could they sue? That’s their prerogative but nobody’s going to go to jail for removing a vehicle that shouldn’t be there in the first place, under the terms of a regulation that clearly allows you to do so.

We as a strata community really need to stop worrying about the letter of the law and get on with running our buildings, acting in good faith and with the best intentions.  That will cover a multitude of sins.

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[Jimmy-T]

It depends who’s responsible for the leak.  Most times you would claim on your home and contents and bill the culprit (the Owners Corp or the upstairs neighbour, depending who is culpable, for any excess you might have on the claim).

If your insurer refuses the claim or if you don’t have insurance, then you would bill the Owners Corp or the upstairs neighbour for the damages.

NB: This isn’t really a strata law issue – it’s more of a small claims court deal.

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[Jimmy-T]

I disagree. This regulation doesn’t only apply to abandoned vehicles – it also applies to cars, for instance, blocking driveways and exits (you might reasonably assume that vehicle access, egress and pedestrian fire exits are a prime concern).

This is what section 34 of the regulations says:

(1)This clause applies to a motor vehicle left on common property that is placed so that it blocks an exit or entrance or otherwise obstructs the use of common property.
(2)The owners corporation may take action under this clause if the owners corporation has placed a removal notice on or near the motor vehicle and the requirements of of the notice are not complied with within the period specified in the removal notice.

It goes on to specify how the notice should be presented which is with the clear intention that the owner of the vehicle has an opportunity to remove it. 

The car may indeed be abandoned or it may be negligently parked by someone who doesn’t use it that often, the fact remains that if the car isn’t moved within five days of the notice going up, it can be removed to somewhere that doesn’t obstruct common property.

A five-day window before removal doesn’t suggest abandonment to me as much as careless parking. And what does “obstructs the use of common property” mean? Surely it simply means the vehicle is on common property.

Also, section 34 allows for the Owners Corp to take the car owner to the tribunal to recoup the costs of the car’s removal – again, that would suggest that the intention wasn’t solely to deal with abandoned vehicles, even if they may have been uppermost in the author’s thinking.

And while I half-jokingly suggested the car could be moved to a parking spot where it might accrue fines, if the nearest place that it could be moved to would incur charges, so be it. You can’t put  it elsewhere on common property, you can’t put it in visitor parking or a resident’s car space, so where is it going to go?

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[Jimmy-T]

Yes, it depends on the outcome.  Let me put this another way, under the new laws, if a Lot Owner takes the Owners Corp (as represented by the strata committee) to the Tribunal or a court of law and loses, and costs are awarded against them, then they pay the costs and the Owners Corp, meaning the other owners, pay nothing.

But if an owner wins a case against the owners corp and costs are awarded against the OC, the owners corp may have to, in the case of court action (Section 90, below), and must, in the case of a tribunal (Section 104), raise a special levy that excludes the owner who has won the case against them.

You can’t ask the owners corporation to pay part of the costs of someone who has unsuccessfully brought a case against them.  Similarly, you can’t expect an owner who has won a case against the owners corp to pay a share of the costs of fighting him or herself.

As for strata management fees, the ‘winning’ owner can ask for costs to be attributed to the owners corp so that they don’t have to pay their share, and they might include schedule B fees.  But it’s not in the interests of good management for the cost of every dispute to be automatically apportioned according to who is on which side.

 

90 Contributions for legal costs awarded in proceedings between owners and owners corporation
(1) This section applies to proceedings brought by one or more owners of lots against an owners corporation or by an owners corporation against one or more owners of lots (including one or more owners joined in third party proceedings).
(2) The court may order in the proceedings that any money (including costs) payable by an owners corporation under an order made in the proceedings must be paid from contributions levied only in relation to the lots and in the proportions that are specified in the order.
(3) The owners corporation must, for the purpose of paying the money ordered to be paid by it, levy contributions in accordance with the terms of the order and must pay the money out of the contributions paid in accordance with that levy.
(4) This Division (other than provisions relating to the amount of contributions) applies to and in respect of contributions levied under this section in the same way as it applies to other contributions levied under this Division. 

 

104 Restrictions on payment of expenses incurred in Tribunal proceedings
(1) An owners corporation cannot, in respect of its costs and expenses in proceedings brought by or against it for an order by the Tribunal, levy a contribution on another party who is successful in the proceedings.
(2) An owners corporation that is unsuccessful in proceedings brought by or against it for an order by the Tribunal cannot pay any part of its costs and expenses in the proceedings from its administrative fund or capital works fund, but may make a levy for the purpose.
(3) In this section, a reference to proceedings includes a reference to proceedings on appeal from the Tribunal.

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[Jimmy-T]

We may as well look at the laws that are coming in next week which basically say spending on legal fees must be approved at a general meeting unless they are less than $15,000 (see Section 103 (2) (b) of the 2015 Act, and section 26 (1) of the regulation, both below).

Fees should come from the Admin fund but it can borrow from the Sinking Fund provided it pays the money back (within a few months, I think).  If the money isn’t in either fund a special levy can be raised.

Neither the decision to spend money on legal fees nor the raising of a special levy require a special resolution.  A simple majority at a general meeting should do it.

I don’t think there has to be any specific decision required to spend OC money on strata management schedule B fees. They are part of the contract with the strata manager and a simple decision to request their involvement is all that’s required. They are management and not legal fees.

103 Legal services to be approved by general meeting

(1) An owners corporation or strata committee of an owners corporation must not obtain legal services for which any payment may be required unless a resolution approving the obtaining of those services is passed at a general meeting of the owners corporation.

(2) An owners corporation or strata committee may obtain legal services without obtaining approval under this section if:

(a) it is of the opinion that urgent action is necessary to protect the interests of the owners corporation, and

(b) the cost of the legal services does not exceed $10,000 or another amount prescribed by the regulations for the purposes of this subsection.

(3) Approval under this section is not required for the following:

(a) to obtain legal advice before commencing legal action,
(b) to take legal action to recover unpaid contributions, interest on unpaid contributions or related expenses,
(c) to take any other legal action prescribed by the regulations for the purposes of this section.

(4) A failure by an owners corporation or the strata committee of an owners corporation to obtain an approval under this section does not affect the validity of any proceedings or other legal action taken by the owners corporation.

(5) In this Division: legal services includes obtaining legal advice and taking legal action.

 

Strata Schemes Management Regulation 2016 – Part 3 Financial management

26 Approval for legal services costs

(1) The amount of $15,000 is prescribed for the purposes of section 103 (2) (b) of the Act.

(2) For the purposes of section 103 of the Act, approval is not required under that section to the obtaining of legal services in relation to a matter that is not urgent if the cost of the legal services does not exceed $3,000.

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[Jimmy-T]

@jojo said:
As far as I understand, they don’t own the space but want the scheme’s permission to build there, like an attic conversion.  

That’s what I thought.  Firstly, as has been indicated elsewhere, you don’t have to allow this and if you did, it would reasonably be with such strict conditions that it would make it almost unworkable.

You would certainly demand a structural engineer’s report, plus council planning approval, plus considerable compensation for the purchase of common property space and the disruption.

You would also have to recalculate your insurance – with the renovator paying the additional amount – as well as your unit entitlements and demand that all these and other legal expenses be met by the owner.  You would probably also want a bond to be deposited in case the work damaged the building.

Failure to provide any or all of these would be reasonable grounds for refusal.  Why don’t they just go and buy somewhere else – it would be cheaper and easier on everyone.

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[Jimmy-T]

Section 116 of the strata act (below) says otherwise. Firstly, residents are not allowed to interfere with the “passage or provision” of services.  Secondly  they must give notice that they intend to alter the structure of the lot.  I think you have a very strong case to take to NCAT ordering the owners to fix this at their expense.

116   Owners, occupiers and other persons not to interfere with structure of lot or services to lot

(1)  An owner, mortgagee or covenant chargee in possession (whether in person or not), lessee or occupier of a lot must not do anything or permit anything to be done on or in relation to that lot so that:

(b)  the passage or provision of water, sewage, drainage, gas, electricity, garbage, artificially heated or cooled air, heating oil and other services (including telephone, radio and television services) through or by means of any pipes, wires, cables or ducts for the time being in the lot is interfered with.

(2)  The owner of a lot must not alter the structure of the lot without giving to the owners corporation, not later than 14 days before commencement of the alteration, a written notice describing the proposed alteration.

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[Jimmy-T]

Just a note here about privacy and privileged access. The strata committee of a building I know very well was recently sued by a former employee for wrongful dismissal.  Evidence was led at the court case of what was effectively a campaign of character assassination.  The former employee won but the chairman and secretary told owners that they couldn’t publish the contents of the finding as they were “sealed”.

Technically, they were correct.  What they didn’t say was that, as they were sued as representatives of the committee and therefore the building, the owners corporation – i.e.

ALL the owners in the building – were parties to the action and entitled to see the sealed contents of the court case. Two owners went to the strata manager and were allowed to view the transcripts and all the evidence after they signed an undertaking not to reveal their contents to anyone who was not an owner.

In other words, if your strata manager’s emails were sent to the committee in his role as strata manager, then it’s just the same as if they were sent to you so the disclaimer has no effect.

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[Jimmy-T]

What do you mean by “use”.  Emails to the EC in its role as representatives of the Owner Corp are effectively emails to all owners so you can certainly raise them at a hearing . 

However, mediation is an attempt to get agreement between two parties in dispute so “evidence” is only there as background information, pointing to a pattern of behaviour, for instance, to explain your position.  As there is no externally imposed decision or ruling at the end of mediation, the question of proving something through evidence is irrelevant.

However, an adjudication hearing is like a court of law where evidence of behaviour may well influence a Member’s decision.  By the way, anything said at a mediation can’t be used as evidence in an adjudication. 

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[Jimmy-T]

Attending the strata manager’s office to view files is standard practice. You might short-cut the operation by asking to see only S119 files (although they will probably tell you that you should find them yourself).

If they aren’t there, then assume they don’t exist and proceed with whatever plan you have on that basis.

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[Author]

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