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@stax said:
I’m still a little confused about the relevance of Sect 65A to upgrades of individual lots. Such work may affect and even alter common property but I would have thought that was significantly different from “improving or enhancing” it – or does the legal definition of that phrase include any change whatsoever?In this context the major significance of 65A is to correctly apportion the responsibility for upkeep of the altered common property to the person who is benefitting from the alterations and that can only be done by a special resolution.
The Act is worded so that responsibility defaults to the Owners Corp. However, the intention is the opposite – it’s a wake-up call to owners that if they don’t apportion responsibility properly, they will end up carrying the financial can in the future, say, when the unit has been sold to someone else.
The explanation of how this works is laid out in great detail HERE by our Strataguru Whale.
This website is littered with complaints and questions about changes made to common property on a nod and a wink that come back to haunt owners corps financially when the person who made the changes without approval sells to another owner who wants the additional installations fixed.
A prime example would be adding an awning to the front of your apartment. Someone has to be responsible for the heavy duty fixings that would need to be drilled into the common property external wall and it shouldn’t be the other owners.
65A Owners corporation may make or authorise changes to common property
(1) For the purpose of improving or enhancing the common property … an owner of a lot may take any of the following action, but only if a special resolution has first been passed at a general meeting of the owners corporation that specifically authorises the taking of the particular action proposed:
(a) add to the common property,
(b) alter the common property,
(c) erect a new structure on the common property.
(2) A special resolution that authorises action to be taken under subsection (1) in relation to the common property by an owner of a lot may specify whether the ongoing maintenance of the common property once the action has been taken is the responsibility of the owners corporation or the owner.
(3) If a special resolution under this section does not specify who has the ongoing maintenance of the common property concerned, the owners corporation has the responsibility for the ongoing maintenance.
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@stax said:What stumps me though is that Sect 65A refers only to “improving or enhancing the common property“. Yet most renovations, power upgrades, installations of external aircons or even adding an external bathroom exhaust outlet are all about improving or enhancing individual lots. The changes to common property in these cases seem to be better described by Model Bylaw 5(1), requiring written consent to damage common property.
Have I got the wrong end of the stick?
Strictly speaking, your strata manager is correct, especially if your version of the by-law is the same as the standard one (below). The question of what is and isn’t lot property is less clear in pre-1974 buildings where the line between lot and common property was in the middle of the wall, so windows, for instance, were considered lot property.
Looking at your list of “minor” works, installing an external aircon and adding an external bathroom exhaust outlet both affect common property as they go through common property walls and may affect the appearance of the building. The installation of additional power points may intrude into common property walls and they, and especially the installation of air conditioning, may affect the load capacity of your electrical board.
Even with the older common property provisions, there is very little that happens in strata that occurs in isolation. Best wait till next July when, under the new laws, all sorts of things will be deemed to be minor works and can be OK’d by the EC .
Here’s the current standard by-law (yours may differ …)
5 Damage to common property
(1) An owner or occupier of a lot must not mark, paint, drive nails or screws or the like into, or otherwise damage or deface, any structure that forms part of the common property without the approval in writing of the owners corporation.
(2) An approval given by the owners corporation under subclause (1) cannot authorise any additions to the common property.
…
(5) Despite section 62, the owner of a lot must maintain and keep in a state of good and serviceable repair any installation or structure referred to in subclause (3) that forms part of the common property and that services the lot.
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Just a few things for you and your neighbour to consider:
About half the strata schemes in NSW are self-managed (although how efficiently, is another matter).
Strata Res (our sponsors) offer a half-and-half service which suits schemes that want to do most of the stuff themselves but also want advice and support on the tricky stuff.
Large strata firms tend to shy away from small schemes because their involvement isn’t worth the money they get. If you take an average of $250 per lot per year, and then consider that one problem resident or one major maintenance issue can take up days or even weeks of their time, regardless of the size of the building, you are not going to be as high on their priorities as a building of 100 units or more.
If you do go for a full-service strata manager, go for a contract that charges less up-front but then adds on costs on a user-pays basis. That way you only pay for the service you get and there is an incentive for them to do more for you, if you need it.
More expensive all-in services have the opposite effect. The strata firm has made its money so every time they make a phone call or write a letter for you, it’s a cost to them. These contracts are better suited to large schemes where you know there is going to be work for the SM and they want to hang on to the income.
Strata managers are human but they are also businesses. Don’t expect to get something for nothing.
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I have received a number of irritated emails from this correspondent about our failure to respond to this very long and very detailed complaint.
As far as I can tell – because the post goes on at great length without reaching any clear conclusion – Cricket has faulty underfloor heating and wants the owners corp to fix it.
The owners corp’s expert says it is not faulty and in the meantime has passed a by-law to which Cricket objected, making all owners responsible for their own underfloor heating.
Cricket wants to know if the by-law does not apply to him becasue he objected to it and if the owners corp is still responsible for the underfloor heating.
Before we go any further, I want to clarify that this Forum offers informed opinion, and not free legal advice
Here is my view.
Owners are still covered by by-laws even if they object to them, provided they are passed by special resolution at a properly constituted general meeting and are not in conflict with superior law.
An owners corporation can’t excuse itself from its responsibilities by passing retrospective by-laws.
There are avenues open to Cricket to pursue a Section 62 claim against the owners corp at NCAT for maintenance and repair of common property, regardless of any by-laws that may have been passed since he made his first complaint.
Regarding the advice given to the Owners Corp that the heating was working properly, he could argue that it was not independent.
And one general note. If readers have an issue that they want us to comment on, try to keep them short and to the point. You might think your legalese construction is convincing and compelling but after the first few paragraphs people just switch off, don’t read your posts and therefore don’t respond to them.
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@rebekah20p said:
should i dispute this letter? what is the SM required to provide me in terms of what evidence they have of my bad behaviour. why do i not get to defend myself? should i demand that the other two households also get letters and can i demand to see proof of this? finally, as tenants should these other two people not have gone via their managing agents to complain, not directly to the owners corporation? would that make their complaints void?
At the risk of repeating some of the advice already given here, we need to know if it was an official Notice To Comply? If not, by all means reply to the letter but otherwise you can just ignore it.
Tenants are entitled to the same rights and subject to the same rules as anyone else in the scheme (apart from voting at strata meetings), but if they are serial nuisances, and they are in breach of by-laws, then they are also in breach of their rental agreements.
Seriously, though, the sooner this blows over, the better. The more people take positions on issues like this, the more likely things are to get worse before they get better.
However, if a child is frequently acting anti-socially on common property then that comes under the by-laws about behaviour and if it’s causing problems for other kids, it should be brought to the attention of the strata manager
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Take a section 162 complaint against the Owners Corporation for failure to maintain and repair common property. Yes, I know you are taking action against yourself but you need to let NCAT decide if something needs to be done.
Don’t let the “I’m Alright Jacks” bully you. Make sure they know that their instransigence is likely to cost the OC even more than it should.
By the way, pebbles are a simple and effective way of dissipating heat from roofs
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First of all, unless your “final warning” was an official Notice to Comply (CLICK HERE), you haven’t even got started with this.
A Notice To Comply has to be agreed on and minuted as such at an executive committee meeting unless you have delegated EC powers to your strata manager.
There is no need for a “final warning” The Notice to Comply is a warning. Read it carefully, fill it in as appropriate, and if necessary make sure you have minutes of the meeting that show it was discussed and agreed upon.
If the behaviour continues, you then go directly to NCAT (no need for mediation) to ask that a penalty be imposed, using this form.
If the problem persists even after a fine, you might prefer to go for NCAT orders which attract mcuh higher penalties if they are breached. You’ll find a handy guide to the whole process, with links to appropriate forms HERE.
Regarding your strata manager, their reluctance to get involved may be because they don’t know what they’re doing. Or it could be because they won’t be paid extra for the extra work. So check your contract with them and find out what they are expected to do for the money that you pay them and, if necessary, find out how much more they would need to be paid for pursuing this.
Regarding hiring a lawyer, NCAT is set up so that you can do this yourselves and you actually have to seek their permission if you want to be legally represented. Sounds to me like your strata manager doesn’t know what they’re doing and/or doesn’t want to do any more than the bare minimum.
If they aren’t even fulfilling the basics of their contract, it may be time to look closely at the contract to see what it would take to get them out.
One other thing, you posted the same question in two separate sections of the Forum. We’ll let it go this time becasue you’re a newbie but that is a very efficient way of getting yourself banned from the site
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No, section 49 does not apply in these circumstances. My understanding is that the restrictions on by-laws that interfere with people “dealing” with their property are actually quite narrow. They prevent you from passing by-laws that would stop you selling your apartment or letting it out in ways that were otherwise legal and acceptable.
However, if a building was zoned or even just deemed to be residential, you could argue that short-term letting was illegal anyway and so you would not be breaching strata law by specifically banning short-term lets. To give an analogy, if you were to pass a by-law banning owners from renting their properties for a business offering sexual services, that would not be a breach of section 49.
The Land and Environment Court has recently ruled in the Bridgeport scandal that “residential” means lets of no less than three months. In fact, unless the building was specifically designated, with council zoning, as designed for short-term lets, you probably should pass a by-law restricting lets to residential.
Why? Because even if there are only two or three airbnb lets in the building, if it is zoned permanent residential they are breaking the law. More importantly, they are the thin end of a rapidly growing wedge. More than half the apartments in NSW are tenante. As soon as owners, or even renters, discover they can make more in a weekend from holiday lets than they do from a full week’s rent, those small numbers in your building will spread.
Then you will have all the usual strata issues – such as noisy neighbours and people who don’t ‘get’ they way things are done in your building – multiplied exponentially and without any simple means of redress because the ‘guests’ have moved on before a complaint can be officially raised.
Airbnb started out as way of people travelling cheaply and enjoying a richer travel experience because they were staying with locals. Now it is predominantly a money-making exercise in which no one – including the multi-billion dollar agency – takes any responsibility for the behaviour of the tenants but the permanent residents of the buildings have to deal with the consequences.
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@obmik said:
[The developers] said that only the first 75% of owners to accept their offer will receive the premium price. Any owners who resist the sale and fall into the remaining 25% would then only receive current market price, which would be determined by a valuer.
The developers are either misinformed or they are lying and are clearly trying to bully you (and feel free to tell them I said that).
If the law goes through it its current form, you will not only be able to go and find competing offers but, if it is a “knock down and build” option, every owner will be entitled to their share of the overall sales price divided according to unit entitlements, regardless of whether they accepted the offer.
So ask the developers why they aren’t telling the truth and ask them what else they are being dishonest about. Then tell them you might consider an offer that has a premium to compensate for relocation expenses.
If the law does come into force next July, as planned, there is a three-month (minimum) process at the end of which it all has to be approved by the Land and Environment Court. The LEC will also be empowered to consider cases where dissenting owners can be compensated above and beyond the basic payment, presumably, for instance, for emotional reasons or for exceptional costs of relocation.
The “market value” option only happens when the existing building is renewed and possibly extended and some owners may want to move back in.
Have a look at THIS ARTICLE that I wrote for the Sydney Morning Herald which spells out the whole process. And tell these shonks to take a hike and come back when they’ve got their facts straight.
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There is a difference between fraud and incompetence and I tend to favour the old adage that you should never ascribe to malice anything that can just as easily be explained by stupidity.
If you are alleging fraud, then you need to establish who benefitted and by what nefarious means this was achieved. Then it is a police matter.
If you are alleging incompetence by the office-bearers of your Owners Corp, bear in mind the law allows a lot of leeway for EC members who acted in good faith but broke strata law. Their come-uppance comes when they are voted out of office.
If you are saying the strata manager cost the owners corp money because of their deliberate acts or professional incompetence, they are covered by professional indemnity insurance and may be worth demanding compensation and, filing that, pursuing them through Fair Trading.
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My first thought is that the people with the disproportionately lower unit entitlements have been getting a free ride for a long time by having UEs that had been set at artificially low levels (a common practice to attract buyers to larger units). They’ve had their cake and now they want to eat it.
If I were you, I would be suggesting that you look at what the UEs should have been (you can get a surveyor or just agree on a figure). Then take an arbitrary date – let’s say when the the person who has owned there for the longest bought in – and recalculate what the levies should have been. The difference is what the S2 owners owe the G7. Then recalculate the proportion of the purchase amounts, give the G7 what they are owed and all is fair(-ish). Otherwise, tell them that the G7 plan to sell and they can deal with the new owner.
And to answer your questions (bearing in mind that the law hasn’t been passed yet):
1. Would they (G7 owners) find developers (or buyers) NOW willing to buy just 7 out of 9 properties – for FUTURE development?
Absolutely – it’s already happening. If developers think they can get council approval to eventually build something that will make a profit, they’ll be all over it.
2. If these 75%-owners become 75%-developer (once propreties acquired by the developer), would the develper be allowed to force the 25%-owners to sell – in the same way as the 75%-owners?
Yes, especially on the numbers you have provided. The one fly in the ointment may be at all “collective sale” agreements will have to be approved by the Land and Environment Court and that’s where the other owners might be able to force an adjustment to the sale price – but they will have to hire some heavy hitting lawyers to do so.
3. If the G7 owners sold at a developement premium, would the ‘market prices’ then be the prices-with-the-developement-premium or just the market-going-prices at the current market? (with the new proposed law, the 25% owners could be forced to sell their properties at the ‘market prices’ plus moving costs)
Market prices only come into play in a redevelopment scheme (the block will be renovated substantially, with the possible addition of new apartments, but the original owners have the option to move back in). When the block is going to be bulldozed and replaced, it’s done on UEs as a share of the overall sale price negotiated with the developer. Obviously, the developer is going to try to push the price down so, once again the S2 will be looking at hiring lawyers to plead their case at the L&E Court. There are enough protections there to stop the minority being screwed financially but those same protections will prevent them from exploiting the situation.
Again, if all you are quibbling over is who gets how much of what, talk to a mediator about reaching a consensus. By all means get a couple of offers from developers and then you will at least be dealing with real figures rather than pie in the sky.
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I think you are clutching at the wrong straws here. This rental agent is not a property manager by any accepted definition in relation to proxy votes and wouldn’t be even if his office was in your lobby.
Firstly, do you have a by-law banning short term lets? If so, that makes the following a lot easier.
If you have an existing problem with short-term lets, then you need to pursue that through your strata manager, Fair Trading, the Tribunal and your local council.
Meanwhile you should canvass the owner-occupiers of the block to approach the council as a group to make it clear that the law-abiding members of the community who actually live there do not agree to to approach by absentee investors who have hijacked the owners corporation.
You could even make a submission to NCAT (the Tribunal) to have a strata manager appointed to take over from the EC. Or you could ask for orders for the creation or enforcement of by-laws restricting lets.
Finally, if this rental agent is already managing illegal short-term lets, then you should complain to Fair Trading. By the way, a recent ruling by the Land and Environment Court said that short-term lets are not covered by the Residential Tenancies Act. So if this agent is promoting short term lets in a residential-only building he is breaking the law.
Illegal short-term lets are a cancer in strata. Hit them with everything you’ve got. Best of luck
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No you can’t go messing around with common property as if you owned it (unless it’s a bona fide emergency) and then pass on the bill. You can however threaten to take your owners corp to NCAT in search of a Section 162 order compelling them to maintain and repair common property.
Often just the threat will get them moving but if it doesn’t, being told to attend the mandatory mediation usually does.
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If by a “payment plan” you mean spreading the load over several months or years for people who can’t afford to stump up the money in one hit, then you have closed the door to the easiest and most efficient option for this – a strata loan.
Bearing in mind that most construction jobs require a series of payments – up front, during and after completion, who is going to carry the can when the less well off owners can’t meet their special levy payments?
Given that your OC has, it would seem, rashly dismissed strata loans despite the problems a minority of owners would have in paying, there are only two options left open to individual owners – they can extend their mortgages by $25K (the cheapest leans you will ever get anywhere) or default on their levies (penalty interest 10 percent p.a.).
The latter would, of course, leave the OC short of funds for the building work, as well as disenfranchising the late payers. However, the Owners Corp can, by special resolution (75 percent of owners voting at a General Meeting), agree not to charge the late payers penalty interest so as not to add to their additional financial burdens.
Strata loan companies such as Lannocks are very experienced in this area and would be able to devise a system such as a line of credit whereby only the people who couldn’t afford to pay up front were being charged interest.
For instance, the law allows OCs to discount levies by 10 percent for early payment. That way you may be able to work this so that you get a loan but only those who couldn’t afford to pay up front were paying interest.
Failing that, your committee should do whatever it can to assist owners who need to extend their mortgages or get a loan. Don’t forget that mortgage providers actually have a priority vote in strata so they should be taking a bit of responsibility in these matters.
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Given that a recent survey showed that tenants place a higher premium on having a balcony than even a car space, you certainly should claim a rent reduction for the period that the balcony is inaccessible.
Erring on the conservative side, you could calculate the proportion of the floor space that is no longer available to you and then ask for a commensurate reduction in rent.
Or you could estimate what you think the loss of amenity is worth, and claim on that basis.
Either way, the sooner you make a claim, the better; if you go to Tribunal, it will probably date any rent reduction from when the claim is made.
As a first step, go to the Tenants Union website and have a look at factsheets 04 and 06 which, although they don’t cover this specific circumstance, do offer guidance about how to make a claim.
Then write a polite letter or email to the landlord requesting a rent reduction for the period that the balcony is not available.
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