[Jimmy-T]

My reading of that clause is that, as long as the strata manager has done their job properly, they can’t be held liable for damages cause by any work that they have commissioned or contracted in good faith.  For instance, if they had contracted an unlicensed builder to do work, that would be negligent and they could be partially liable for any damages resulting from that.  However, if they have hired a licensed builder, with the full approval of the Owners Corp through an agreed tendering process, then if it all goes pear-shaped, the Owners Corp’s beef is with the builder, not the strata manager who hired them.

 

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[Jimmy-T]

Yes, about $250 per unit per year is about right.  But the fees will soon ramp up in a “difficult” building that requires, for instance, attendance at EC meetings, general meetings and Fair Trading  mediations.

And don’t forget that smaller blocks can demand more of a strata manager’s time than larger ones so the cost per unit might be higher if you want a comprehensive service.

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[Jimmy-T]

Simple answer – tell these busybodies on your committee to either issue a Notice To Comply  (which will require them to state the by-law you have breached and how you did so) or take you to the CTTT to get an order forcing you to remove the roof (mediation required by law before you go to a hearing) or leave you alone.

In other words, tell them you haven’t done anything wrong then let them make the running.

You will not entertain anything other than a proper approach on an official notice that allows you to argue your case in front of the CTTT.

In fact, you would like an apology for the unnecessary distress this has caused you.

And, if your want to be even more aggressive, tell them that any further threats or orders will be seen as bullying an you wil appaly to the CTTT yourself and have the committee replaced by a statutory strata manager of your choosing.

But maybe you should keep that last shot in your locker for now.

 

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[Jimmy-T]

One of the very good reasons for insisting on special resolution approval for changes to common property is that the law demands that the Owners Corp addresses the question of who is responsible for the Common Proprty thereafter.

The default position is that the Owners Corp is responsible but it clearly allows, if not encourages, the General Meeting to make the person benefitting from the changes responsible for ongoing repairs and maintenance. 

This is what the Act says:

Division 4 Special provisions for by-laws conferring certain rights or privileges

54   By-law must provide for maintenance of property

(1)  A by-law to which this Division applies must:

(a)  provide that the owners corporation is to continue to be responsible for the proper maintenance of, and keeping in a state of good and serviceable repair, the common property or the relevant part of it, or

(b)  impose on the owner or owners concerned the responsibility for that maintenance and upkeep.

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[Jimmy-T]

Aha – but if Worrywort sends out the agenda and holds the meeting at the appointed time and there is no quorum within half an hour he just needs to turn up at the same place a week later and whoever is there is the quorum.

The first thing he then needs to do is reduce the size of the EC to one and then pass all the motions he wants.

Just wait till he starts raising levies and fixing the building up, though – then you’ll see attendances at meeting shoot up.

This is what the Act says:

12   Quorum

(4)  If a quorum … is not present within the next half-hour after the relevant motion or business arises for consideration at the meeting, the meeting stands adjourned for at least 7 days.

(5)  If a quorum… is not present within the next half-hour after the time fixed for the adjourned meeting, the persons present personally or by duly appointed proxy and entitled to vote constitute a quorum for considering that motion or business.

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[Jimmy-T]

Waverton said:

My problem is that we have an EC of 7 people, 3 of whom are the owners who are looking to get permission to permanently park on common property and 1 who will vote with those 3.  That means at EC level the remaining 3 (which includes myself) who are against the proposal would be outvoted.  If the matter had to go to a GM or AGM as a special resolution, I know there are enough owners who would vote against the proposal and it would be lost. 

According to your original post, these three owners aren’t just asking for permission to park – they are asking to be handed permanent exclusive use of common property which they can then add to the value of their homes when they sell.

The EC can give people permission to park on common property temporarily but they can’t give that permanently.  That has to be done as an exclusive use bylaw which requires a special resolution by the Owners Corporation at a general meeting. And if it’s not in the by-laws then it can’t be included in the sale of the property.  

NB: Don’t get confused by the special resolution by-law required when altering common property and an exclusive use by-law used to confer rights or privileges.  These are different things even though they use the same mechanism.

To give an owner exclusive use of common property, you require a special resolution which carries with it statutory conditions (such as who maintains the property after exclusive use has been conferred).

The EC is specifically forbidden from passing special resolutions so that should really be the end of that discussion.

Here are extracts from  the relevant sections of the Act:

52 How does an owners corporation make, amend or repeal by-laws conferring certain rights or privileges?

(1)  An owners corporation may make, amend or repeal a by-law to which this Division applies, but only:

(b)  in accordance with a special resolution.

special resolution means a resolution which is passed at a duly convened general meeting of an owners corporation and against which not more than one-quarter in value, ascertained in accordance with clause 18 (2) and (3) of Part 2 of Schedule 2, of votes is cast.

21 Executive committee’s decisions …

 … the following decisions may NOT be made by the executive committee:

(a)  a decision that is required by or under any Act to be made by the owners corporation by …  special resolution or in general meeting,

So the land-grab by the three members of your EC is illegal if they try to do it as an EC ruling.

However, even if they were able to award themselves the car spaces for free by getting 75 percent of votes at an General Meeting, it could still be challenged in court as a fraud against the minority since they have annexed part of common property which has real value without compensating the other owners. 

By the way, a seven-member EC is far too big for a block of 16 – three or five should be perfectly adequate.  Reduce the numbers at your next AGM and take the opportunity to get rid of the land-grabbers.

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[Jimmy-T]

@Unitowner said:
I was disappointed to read the comments about short term letting. There are many areas in NSW where apartment buildings have been built to provide for people who want to holiday on the coast or elsewhere but don’t want to stay in a motel or holiday house … 

The problem is not buildings that were clearly intended to have short-term rentals or have a long history of having allowed them – it’s the residential buildings that have been invaded by opportunist parasites of the ‘party flat’ trade.

I think there is a place for holiday rentals like yours and good on you for making it work.  But if the ‘party flat’ industry is going to hide behind holiday rentals as a way of perpetuating their seedy trade, then it is them that you should be attacking, not those apartment residents who simply want to be able to live in the peace and quiet they are promised when they buy or rent their residential apartments in buildings that were never intended for short-term lets.

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[Jimmy-T]

@waverton said:
Our building has 4 owners, in a building of 16, who do not have parking spots as part of their title.  They have asked the EC to give them the right to permanently park on common property.  They do not want to pay any extra levies or fee for this right and they want the rights if granted to pass to any future purchasers of their units.  Is this a reasonable request  … and can the EC give them this right without a Special Resolution going to an GM or AGM?

So many questions and all the answers are the same – no, no and no.

Firstly, this is not a reasonable request – they want a free parking space and to not have to pay extra levies when they get it.  On your bike, would be my response.

Second, the EC does not have the power to give them permanent exclusive use of Common Property – that would require a special resolution by-law passed at a general meeting with no more than 25 percent of those voting to be against it.

Finally,  they have to pay something like the going rate for a car space or you are defrauding all the other owners (at least one of whom, I’m guessing,  will take you to the CTTT and blow this out of the water).

Tell them to come back with a reasonable offer including a by-law drawn up to your specifications at their expense.  

Or, a better way, if you have the space, is to offer them car spaces for lease from the Owners Corp with some sort of guarantee that the owner or tenant will have first refusal on the space whenever it becomes available, say on a six-monthly basis.

That way they get their car space and nobody gets ripped off.

 

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[Jimmy-T]

@oystercove said:

…. why would any half smart owner ever bother to get permission, particularly if they think it might not be approved??

Because if they get found out before they sell their property, they can find themselves having to reinstate the CP to it’s original state at their own expense.  It’s only after the property with unapproved changes is sold that the changes become the responsibility of the Owners Corp.

How do they get found out? Fire inspections, other work in the unit and, as a last resort, a sticky-beak at an open house prior to sale.  Whale’s catch-all by-law is the best way to go but failing that, a an information hand-out warning people that unapproved changes may lead to to delays when they come to sell might get owners to toe the line.

 

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[Jimmy-T]

I am not a lawyer and you probably should speak to one.  However, if my memory serves me well, there are a variety of divisions of responsibility based on ownership of the land on either side of the fence.

Generally, if the land on one side of the fence is private property, and the other side is common property, fence maintenance is shared between the lot owner and the Community or Precinct Association.  If both sides are common property then the Association is entirely responsible.  If both sides of the fence are owned by lot owners, then they are responsible.

For an external fence, it would be whoever owned either side of the fence – such as an adjoining landowner on one side and the Association on the other EXCEPT if the other side of the fence was Crown Land in which case the fence would be the entire responsibility of the Association.

The exception to all the above would be if the Community, Precinct or Neighbourhood Management Statement defined the boundary fence as commonon property, lot owners property or some other combination thereof.

[See Kiwi Paul’s post above for a simpler definition] 

 

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[Jimmy-T]

So is the problem that there are more owners than spaces? Or more owners who want spaces than are available? Or something else?

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[Jimmy-T]

@Whale said:
… a new owner she can’t vote unless the Owners Corporation receives a Notice under S118 of the NSW Strata Schemes Management Act (1996) prior to the commencement of the General Meeting

As I said that’s my “take”, but what do you all think?

I think you’re covered by section 118.  Basically, it says that in cases like this, if someone wants to vote at the general meeting, they have to establish the grounds on which they have that right in a statutory declaration before the meeting.

And you can preempt that by asking them to provide proof that they are entitled to do so and if they don’t withing 14 days, you can reject their votes.

And that’s your real dilemma.  Do you wait till the meeting then aske them to show proof that they are entitled to vote (and endure the shouting match that ensues when they don’t) or do you agive them 14 days notice to do so and invoke sub-section 5 when they don’t.  Here’s what the Act says

118   Notice to be given to owners corporation of right to cast vote at meeting

(1) Person with right to vote at meetings must notify owners corporation

A person who has an interest in a lot that, subject to this Act, gives the person a right to cast a vote either personally or by nominee at meetings of the owners corporation must notify the owners corporation in writing of that interest.

AND

(3) Other matters to be specified in notice

The notice must specify the manner in which the interest arose and be verified by statutory declaration if any of the following applies to the interest:

(a)  the interest is that of the executor or administrator of the estate of a deceased person …

OR

(4) Owners corporation may require notice to be given

The secretary of the owners corporation, if of the opinion that a person obliged to give notice under this section has not done so, may by a requisition in writing served on the person, require the person:

(a)  to state, within 14 days, whether or not the person is a person required to give notice under this section, and
(b)  if the person is such a person, to give that notice.

(5) Person prevented from casting vote if certain requirements not met

A person is not entitled to cast a vote at a meeting of the owners corporation if the person has not complied with a requisition served on the person under subsection (4)  …

Of course, I’m not a lawyer so this might all be completely wrong.

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[Jimmy-T]

I agree with KP on this, especially as it sounds as if one owner is going to be left out of the equation, leaving the EC wide open to a ‘fraud on the minority’ case.

A much, much better plan is to install lockable storage cages and rent them to owners on a first-come, first served basis.  The money raised will pay for the caging and thereafter becomes a income for the strata plan.

The Owners Corp retains control over the area, just in case it is ever required for something else.

Right now, you can ask anyone to clear their personal goods out of common property.  It’s not a matter of taking sides, just of establishing control over the commonly owned space (probably on the basis that there is no written permission to store goods there).

When it’s empty, lock it up and start again.  But this whole exclusive use strategy is so fraught with potential problems I would delay registering the by-law until the two years are up, just so you can start again with something that is much fairer and more equitable.

 

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[Jimmy-T]

@eo@ocn said:

Without transparency, on any level, owners can be left feeling (and sometimes being) cheated.

You won’t get any argument from me on that – and it is a very easy fix.  The annual accounts should clearly state how much the insurance costs and how much commission the strata manager gets.  It’s up to the strata manager to explain to owners – possibly on a flyer attached to levy notices – why they get this commission.

Much better to have a system where owners corporations properly remunerate their managers for their expertise and experience, and pay a separate fee for service for their insurance which is not grossed into the premium (remembering that for our new large and sophisticated buildings this could be $100,000+ per year).

Two points in that statement.  Proper remuneration is a tricky issue since may owners corps will go for the cheapest option because they don’t know what the benchmarks of good service are.  All too often, even well-run buildings are taken over by owners who promise lower levies and the only way they can achieve that is by cutting corners.  That is turn will lead to an increase in mega management firms and fewer small local operators.

Allowing strata managers to charge the insurers a separate fee for servicing the policy is a smart way round this – but that’s not what the anti-commissions lobby is pushing for.  The demand is for a complete ban and that has some consequences that disadvantage the average owner.

Let’s educate owners, who can sometimes focus on the bottom line rather than the value being delivered.

Good luck with that.  But not everybody reads Flat Chat or is a member of the OCN (more’s the pity).

Let’s see all strata managers tendering on the same basis of a fair day’s pay for a fair day’s work, with a transition program that puts all managers on a level playing field viz renegotiating their fees at the same time.

That sounds good – but what does it mean?  KPI’s and the like? Personal engagement with the owners?  X hours per week devoted to the strata plan. I don’t think it’s a bad idea – I just can’t see how it might work.

Let’s see more healthy competition in the strata insurance market, once this playing field is also levelled.

No argument on that.

Yes, some strata managers may choose to gracefully retire or to sell their business.  But those strata managers who choose the transition will hold their heads high, as valued and valuable advisers on strata matters.  

But once again we come back to the very real problem of often very new and largely unaware owners being asked to run their buildings with no training, experience or even basic knowledge.  Along comes Flash Harry who offers them affordable this and competitive that with a dash of high-tech whatever and we are back to the bad old days of faceless strata managers who don’t care and frustrated owners who don’t understand.

One final point – based on conversations I have had within the past few days, I will be very surprised if there is a complete ban on commissions in the strata law review.  We would all probably be better off focussing on a way of making these commissions work for all concerned but especially strata owners.

To me, that means bringing in full and open disclosure, statutory financial responsibility, clear and unequivocal responsibilities for the strata manager to manage the policies and a minimum number of quotes presented to all owners at an AGM at every policy renewal.

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[Jimmy-T]

And your question is?

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[Author]

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