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alarmed to read that, under the 75 pc rule, if a developer approaches a unit in a small complex (Grist mentions four in the block) and three owners agree to sell, the fourth owner is compelled to sell, willing or not.
Yes, but no, but …
There is a process and it’s far from straightforward. First of all the owners have to pass a majority agreement to set up a sub-committee to investigate the proposal.
Then the committee has to report back, with details of the likely deal or deals they have been offered. Then there is a three-month cooling off period so that everyone can consider their options.
Then the owners get to vote, and it does require, firstly, 75 percent (plus) of lots by unit entitlement, and then it requires 75 percent of lot owners to agree in writing (in a simple head count).
Then the sale has to be approved by the Land and Environment Court and at this point any owner can object, for instance, on the grounds that they aren’t receiving sufficient compensation, or that there are other factors that are specific to their circumstances (they have an aged relative who doesn’t want to move, for instance). And here’s the interesting twist – the owners corporation has to pay the objector’s legal fees.
So it’s not as cut and dried as, say, a developer buying up 75 percent of the units or persuading enough owners to support their plan. It has to be reasonable and fair and that can be a considerable hurdle if the only argument is profit.
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FYI: You can make complaints about lawyers via the Office of the Legal Services Commissioner (Not the Law Society, as I said above). However, the Law Society website has a very helpful guide on the grounds for potential complaints, including Unsatisfactory Professional Misconduct which “includes conduct of a lawyer occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer” (section 296 of Legal Profession Uniform Law (NSW)).
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He states he needs to check that the strata committee has acted within its scope and with full support from the Body Corporate.
This lawyer needs to read up on his strata law. The committee is empowered by the Act by default to act on behalf of the owners corporation except for in the very few matters where the law states that decisions can only be made by the owners corporation at a general meeting.
Issuing notices to comply and requiring owners to not annex common property are not decisions that require a meeting of the full owners corporation.
This is the kind of a-hole who gives lawyers a bad name. How about you tell him a) to point out where in law it says his client can annex common property without permission and b) that if he doesn’t pull his head in you will report him to the Law Society for knowingly giving unsound advice to his client for the purpose of bullying members of a strata committee into making a decision that violates strata law.
Or you could just tell him to stop harassing the strata committee and take it to NCAT and see how he gets on there.
But really, all you need to do is commence a mediation at Fair Trading with a view to seeking orders at NCAT and if the owner doesn’t reveal that to potential purchasers he is breaking the law.
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The OC is not liable in a lot v lot dispute unless one party can show that the OC allowed the poor behaviour. For instance, Smokin’ Joe gets taken to NCAT by the upstairs neighbour and uses the fact that the Owners Corp had chosen not to pass a by-law restraicting smoking as defacto permission to continue doing so. next stop, upstairs neighbour takes OC to tribunal to force them to pass an appropriate by-law.
Scenario two, a resident objects to having to walk thorough clouds of smoke from smokers on common property. Again, the OC could be taken to the Tribunal for failure to maintain common property for the safety and wellbeing of all residents.
Doing nothing is not a “zero sum” event – inaction may have consequences and the OC has to accept responsibility for them if owners choose to maintain the status quo.
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Start by issuing information newsletters explaining why the new by-laws are necessary and that they have majority support. The tone of these should be as neutral and non-aggressive as possible.
Explain that failure to pass the new by-laws could expose the owners corporation – and make it clear, that’s all owners – to expensive litigation that they will have no choice but to defend if they don’t pass the by-laws.
You might also tell owners that there will be a grace period to allow residents to adjust to the new by-laws and their implications.
Once the by-laws are in place, get the committee to agree on that grace period – during which no breach notices will be issued – but warn residents that afterwards they will be liable to be issued with Notices to Comply if they breach the by-laws, which can lead to financial penalties and Tribunal orders.
And don’t get dragged into the “three warnings” nonsense. Notices to Comply are warnings – they just happen to have teeth if they are ignored.
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In my experience, certainly with Fair Trading, it’s almost immediate. Fair Trading contacts the strata manager who then contacts the strata committee, all withing a matter of a couple of days, at most. I suspect it is an automated response.
As far as being dissuaded from proceeding when you tell the committee what you are planning to do, I think you have to give your SC a chance to comply or compromise with your wishes. If they don’t, then by all means gather your evidence and lodge a request for mediation.
But there are myriad reasons for committees not responding properly, ranging from indecision and lack of consensus to selective deafness; sometimes an application to FT is what it takes to get their attention.
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Maybe I need to keep away from the PC and have a drink instead
Good tactic for most stressful situations.
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I took the committee to a mediation session (on behalf of the OC) previously about their absence of good faith when they refused to make available a history of communications with a contractor (for a problem that is 4 years old and still unresolved). They still have refused to make those emails available to me.
If mediation doesn’t result in a signed agreement to act in a certain way, then it is worth nothing more than a box-ticking exercise to allow you to proceed to a Tribunal hearing.
If you go to a tribunal and it is a simple case of the committee refusing your legal right to see all documents relating to the management of the scheme, then you can also claim costs as they will have defended the case knowing that they were in the wrong and had no viable defence. If there are other legal issues in play that muddy the water, then it might not be so simple.
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The committee cannot make a decision that adversely affects you, and it can be challenged.
I’d be interested to hear how that works. If my committee issues a Notice To Comply to prevent me rehearsing for the World Electric Ukelele Championships, isn’t that a decision they can make that adversely affects me?
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Do not warn your committee of your action. If you do, they will no doubt ask you to withdraw your application.
Fair Trading automatically informs the “respondent” that a case has been taken against them and mediation has been sought. Just make sure you have all your information and witnesses lined up before you pull the trigger.
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Should our Strata committee be seeking our own legal representation or is this likely just bluff.
Second question first – this is probably just typical non-strata-savvy lawyer bluff and bluster. The simple fact is that the owner has to declare anything to a purchaser that might affect their use of the property. If they lie on the declaration, that is a criminal (I think) offence.
Just tell the lawyer that, especially in view of their letter, the committee will now be sure to diligently observe all requirements of strata and property law and you trust their client will do the same. They should bear in mind that the owners corporation has a legal duty to protect common property for ALL owners.
As for hiring a strata lawyer, your call but a strongly worded letter might be all you need to get them back in their box.
By the way, I think lawyers who bend the facts to bully people into doing what their clients want should be struck off as a matter of course.
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Or a simpler way would be to make sure you have the numbers among othr committee members then propose a motion on the next SC agenda that the position of chair be declared vacant and a new election for committee chair be held by the sitting members.
Your challenge would be to make sure the “rebels” held their nerve in the face of what would surely be ramped up bullying. And then there’s the fact that the chair would still be on the committee, if she didn’t resign in high dudgeon.
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Managing rental properties is bread and butter stuff for a lot of RE agents. Just make sure their rental managers are going to give you what you want and need – e.g. not protect you from tenant complaints and bad news – and that they will treat tenants with respect.
After a few years in the front line, often dealing with “difficult” tenants, from the entitled to the slackers (and sometimes both), rental agents can sometimes, understandably, become a little jaded.
Some rental agents will protect you from negative comments about your property because they don’t want to be the bearers of bad tidings. Just make sure you tell them how much you want or need to know about the tenants and the tenancy.
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