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Here in NSW the law requires ECs to prepare and distribute ‘full and accurate’ minutes of their meetings. But what does ‘full and accurate’ mean?
Many ECs take the view that it only requires that all items discussed and any resolutions made are recorded. The debates and discussions themselves are not generally aired … unless the secretary or chair has a bee in their bonnet.
For instance, in recent minutes our secretary indulged in a lengthy explanation of why he had written to the government to complain that the incoming anti-proxy harvesting laws are anti-democratic. You can jump to your own conclusions about why any space in the minutes was taken up with this.
It has to be said that there was a lengthy response to an owner who had questioned the practice of strata managers taking commission on strata insurance. The response explained why it happened and how it occurred at no additional cost to the EC, so it was probably worth putting it out there. That said, we have no newsletter where it might have been even more effective.
Your caution about ‘naming and shaming’, even inadvertently, is admirable. Generally speaking, the less detail you give, the better, although there are situations, such as when the EC has a legal requirement to approve a motion before they can issue a Notice To Comply, where the guilty party has to be identified in the motion.
Many ECs get round this by using the Lot number, on the basis that no one knows their own lot number, let alone anyone else’s.
There are also occasions when you might want to explain why a decision has been made. For instance, if you are closing the pool over winter for essential repairs rather than to save money or protect the environment, it’s worth spelling that out – which is where the newsletter is probably a more effective tool.
Your practice of not naming names in your minutes and newsletter is worth sticking to – for your own protection if not your neighbours’.
In NSW, the dealings of an owners corp have ‘qualified privilege’ when it comes to defamation. This allows for robust and open discussion but protection against legal action pretty much evaporates as soon as any kind of malice is shown. The Sydney Morning Herald lost part of the defamation case brought by Joe Hockey because of an email that said “let’s nail him on this …”
Getting back to the notice board, it may be the only time owners actually read agendas and minutes so it does have value but you have to be extra careful.
An owner in a building I know sued some members of the EC for defamation because of an item in the minutes asking owners to write letters supporting the EC in their battle over a by-law. The owner felt the wording of the request implied that they were a bad person.
Because the minutes were also pinned to the notice board, the owner’s lawyers argued that this had gone beyond the limits of internal discussions as the minutes could now potentially be read by visitors and tradespeople, lowering the owner’s standing in the community.
The owner lost, partly because neither malice nor broad publication could be proved, and had to pay very hefty costs. But the emotional toll on the targetted EC members who had to turn up in court to be cross-examined by an eminent Special Counsel, was incalculable.
So I would say yes, post the minutes in their most minimal form including in a format like “an owner has claimed that a tenant has damaged their property – this is being investigated.”
In an effort to fire a warning shot, I might even go so far as saying something like “Neighbours of lot 567 have complained about excessive noise and parties. We are examining these allegations. Any other owners who may have suffered disturbance should contact the secretary …” But only if there was no prior suggestion of malice in notes or emails. You could argue that no visitor or tradesperson would know where Lot 567 was, let alone who lived there.
And I would put at the bottom of your minutes “residents who would like to read further explanation on any of these items should contact the secretary and we will try to include it in the next newsletter.”
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Apart from all of the above, you and any other neighbours whoi don’t want to be bullied out of the building should probably examine taking a case to NCAT bor either or both of the options open to you to protect your interest.
The simplest would be a simple Section 138 motion to force the Owners Corp to maintain and repair the building. As a precursor to that, you could send a letter to the EC and strata manager with a list of repairs etc that you think should be attended to.
Second, you should consider applying for the statutory appointment of a strata manager on the grounds that the best interests of all owners are not being pursued, specifically, the building is being run down so the RSL can buy it at a knock-sown price.
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If the owners corp has been ordered to pay your costs then any decision not to include legal fees in a special levy is a decision to break the law. Section 230 of the strata Act (see item 3) is crystal clear on this.
The EGM decision has no more validity than a decision to go out a rob old ladies on the street. It is a decision to break the law and therefore should be rescinded. In fact, the motion should never have been raised in that form. The decision to appeal is valid but the decision not to pay you isn’t.
Refer them to the section of the Act and tell them that any further attempts to make you pay a share of the legal costs, by whatever means, will result in further action at NCAT and an application for the statutory appointment of and independent strata manager to take over the running of the building.
In fact, you could get a strata lawyer to write the letter and then send the bill for that to the EC too. Contact our sponsors SGB – they’ll advise you.
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Anything below the surface is uusually common property. But if the trees are yours (even though you didn’t plant them) and they caused the damage, then you are liable for repairs.
As for redirecting storm water, that would be a planning issue as well (and a whole other world of pain).
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Regarding the new owners, the phrase caveat emptor comes to mind. If they bought without knowing there was a dispute going on that could cost them money, then that’s the price they pay for not doing a propoer strata search.
Regarding the post-meeting decision, I have frequently seen meetings where the loudest voices on the EC have prevailed and insisted things be done their way, only for sharper and calmer minds to tell them that the decision they pushed through was illegal or unworkable.
The last AGM I attended in my building passed a raft of by-laws that I treid to tell them were invalid but I was steamrolled. Lo and behold, the by-laws remain unchanged.
So yes, take the money and run provided it comes with written assurances that you will not have to pay now or in the future. The law says that they have to raise a special levy that excludes you to pay legal costs in a case they lost. maybe someone has finally read the law … or this website!
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You’re right./ This owner has effectively damaged common property by putting locks on doors where she wasn’t entitled to.
You should raise the issue with the strata manager and/or executive committee with two purposes in mind.
1. to allow access when needed for all residents.
2. to find out how serious and valid her security concerns are.
You don’t want lots of keys floating around as the space will inevitably become a “store” (read dump) of other owners unwanted goods.
But how likely are you to need access in an emergency? If the answer is “not very” then the space should be locked with the key available to be “signed out” by your strata manager.
Otherwise, you could install a small key safe with a combination lock (the combination only being available to long-term residents).
If this owner resists, she should be told that she could be charged for the full cost of removal of the lock under strata laws relating to damage of common property.
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@mac said:
I understand the 3 storey rule only applies to new developments not renovations – according to the Fair Trading web site
Well, there you go. I always understood the opposite but I will bow to Fair Trading’s superior knowledge.
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CHU Insurance have been loyal supporters of this website from day one. And they are pretty good at what they do. Their new smartphone app (see ad on home page) looks very nifty, making it easier to make a claim without filling in a mountain of forms. What more can I say?
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The most contentious of the new by-laws will be about pets – you can either go for no pets, no pets unless they are approved by the committee or pets, unless they are refused by the committee.
You might also look at no short-term lets (if that’s in keeping with your zoning) and occupancy limits (no more than two adults per bedroom – as shown on the plans).
You could also limit all contracts to one year, initially. The new laws will limit strata management contracts to one year and a maximum of three years thereafter. Why not also have that for facilities managers and cleaners etc?
The important thing to remember is that all NEW items have to be on the agenda for the AGM – you can’t raise them at the meeting unless they are a valid amendment.A new by-law can’t be raised at the meeting as it is not an amendment. However, the terms of a by-law that’s already on the agenda or a variation of the terms of the strata managers contract would be valid as the basic issue is already listed for discussion.
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If the building is more than three storeys high there is no requirement to provide Home Building Fund Insurance.
And yes, it is crazy.
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The simple solution is to take this to Fair Trading for mediation , as an obligatory precursor to action at NCAT under section 138 calling for an dore to maintian and repair common property.
But I am confused about who the “the Strata agency who has the account to the apartment building” is. Is this the strata manager? If so, send the strata manager and/or your committee a letter stating that you insist that the tumble dryer be repaired or replaced, on the grounds that you mention (it’s not working properly and it’s a fire risk) and tell them that is they haven’t remedied this within two months you will commence proceedings at Fair Trading and, if need be, NCAT.
Point out that the Owners Corporation has a legally binding duty to maintain and repair common property and that previous efforts to do so have failed. They need to act now or risk added expense of costs being awarded at NCAT.
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Your OC is treading very carefully here. They are legally obliged to send you a notice of the EGM and would risk any decision being invalidated if they didn’t do so. It’s a simple case of dotting the i’s and crossing the t’s.
Personally, I would take the opportunity to attend and ask the other owners to think carefully about who they elect at the upcoming AGM as the incumbents are costing them money that they don’t need to spend by pursuing legal actions that they can’t win.
But that’s just me …
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@Costa said:
How can non-EC members get this guy’s renovations checked out? The strata manager says they have no correspondence or submissions.Tell your fire safety inspectors that you are concerned about illegal and possibly dangerous electrical installations. They can demand entry to apartments to conduct fire safety checks.
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Until you have the first AGM of your strata scheme, you do not need to accept any contracts signed by the original owner (developer).
The requirements for an AGM are very specific and require proper agendas be sent out prior to the meeting and quorums be established. Meetings held that don’t abide by these regulations have no standing.
As you will see from the section of the Act printed below, there are very specific requirements for the initial AGM and it doesn’t sound as if your building has met them. Therefore, the meeting for which the “minutes” were produced was not valid and you and your neighbours need to send a letter stating that it was not a meeting of the owners corporation and you dispute the content of the minutes.
Also, the ‘initial period’ referred to lasts until units carrying one-third of the unit entitlements have been sold.
You guys really need to talk to Fair Trading and, at the same time, find a strata manager who will advise you on what to do, on the proviso that you will propose them as managers at the first AGM.
Here are a couple of extracts from the Act.
Division 1 Requirements relating to holding of first annual general meeting
For the purposes of this Division, the first annual general meeting of the owners corporation is:
(a) a meeting convened and held in accordance with clause 2, or
(b) a meeting held in accordance with an order under clause 5, or
(c) if no meeting is held as referred to in paragraph (a) or (b), the first meeting, however convened and whenever held, of the owners corporation having an agenda consisting of the items referred to in clause 3.
2 When must first annual general meeting of owners corporation be held?
(1) The original owner or, in the case of a leasehold strata scheme for which there is no original owner, the lessor of the leasehold strata scheme must convene and hold a meeting of the owners corporation, in accordance with Divisions 1 and 2 of Part 2, within 2 months of the expiration of the initial period.
Maximum penalty: 10 penalty units.
(2) An original owner or lessor who has failed to convene and hold a meeting of the owners corporation in accordance with subclause (1) remains liable to the penalty provided by that subclause even though an order has been made under clause 5 or a meeting has been convened and held in accordance with any such order or otherwise.
(3) Divisions 1 and 3 of Part 2 apply to and in respect of the first annual general meeting of the owners corporation and voting at that meeting.
3 What is the agenda for first annual general meeting of owners corporation?
The agenda for the first annual general meeting must consist of the following items:
(a) to decide whether insurances taken out by the owners corporation should be confirmed, varied or extended,
(b) to decide whether any determination of the amount of a contribution required to the administrative fund or sinking fund should be confirmed or varied,
(b1) in the case of an owners corporation to which section 75A applies, to discuss the preparation of the plan required by that section,
(c) to determine the number of members of the executive committee and to elect the executive committee,
(d) to decide if any matter or class of matter is to be determined by the owners corporation in general meeting,
(e) to decide whether the by-laws for the strata scheme should be altered or added to,
(f) to decide whether a strata managing agent should be appointed by the owners corporation and, if a strata managing agent is to be appointed, which functions of the owners corporation should be delegated to the strata managing agent,
(f1) to decide whether a caretaker should be appointed under section 40A and, if a caretaker is to be appointed, what functions the caretaker should exercise,
(g) to consider the accounting records and the last financial statements prepared,
(h) to decide whether an auditor should be appointed,
(i) to decide whether insurance of the kind referred to in section 88 (2) should be taken out.
4 What documents and records must be produced at first annual general meeting?
(1) An original owner or lessor required to convene a meeting under this Division must not fail to deliver to the owners corporation at its first annual general meeting the following:
(a) all plans, specifications, certificates (other than certificates of title for lots), diagrams and other documents (including policies of insurance) obtained or received by the owner or lessor and relating to the parcel or building,
(a1) without limiting paragraph (a), all development consents, complying development certificates and related endorsed plans, “as built” drawings, compliance certificates (within the meaning of the Environmental Planning and Assessment Act 1979), fire safety certificates and warranties obtained or received by the owner or lessor and relating to the parcel or any building, plant or equipment on the parcel,
(b) the certificate of title for the common property, the strata roll and any notices or other records relating to the strata scheme, if they are in the owner’s or lessor’s possession or under the owner’s or lessor’s control,
(c) the accounting records and the last preceding financial statements prepared,
(d) any other document or item relating to the parcel or any building, plant or equipment on the parcel that is prescribed by the regulations for the purposes of this subclause.
Maximum penalty: 100 penalty units.
(2) This section does not require an original owner or lessor to deliver to the owners corporation any documents that exclusively evidence rights or obligations of the original owner or lessor and that are not capable of being used for the benefit of the owners corporation or any of the other owners.
5 What happens if first annual general meeting not held?
(1) The Adjudicator may, on application, appoint by order a person nominated by the applicant (and who has consented to that nomination) to convene and hold a meeting of the owners corporation if a meeting of the owners corporation has not been convened and held in accordance with clause 2.
(2) The meeting is to be convened and held within the time specified in the order.
(3) An application under this section may be made by an owners corporation, an owner or a mortgagee of a lot.
113 Restrictions on powers of owners corporation during initial period
(1) An owners corporation 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 section 182:
(a) alter any common property or erect any structure on the common property otherwise than in accordance with a strata development contract,
(b) incur a debt for an amount that exceeds the amount then available for repayment of the debt from its administrative fund or its sinking fund,
(c) appoint a strata managing agent or a caretaker 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,
(d) borrow money or give securities.
(2) An owners corporation may recover from the original owner:
(a) 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
(b) as damages for breach of statutory duty, any loss suffered by the owners corporation as a result of any other contravention of subsection (1).
(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 subsection (1) (other than paragraph (b)).
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