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Basically, the government is now taking on some of the risk, because the risk is too high for anyone else. This generally doesn’t end well.
You take it to NCAT, which for something like this may require legal advice. I think it breaches the basic principle that common property is the responsibility of all lot owners. In the unit block I’m in, I’m one of about 25% of owners who have the roof above them. If it leaks it is not my problem, it is the problem of 100% of owners because that is the deal that they all signed up to.
I’m certain that the strata I’m in in NSW has been deliberately avoiding mentioning the waterproofing problems. It has suited some of the owners who managed to sell up before it eventually became difficult to hide. What happened was they had been supplying a copy of an engineers report to the insurance companies for 10 years and eventually one read it and wondered what had been done about the problems. Not very much and our insurance costs became massive.
One of the unforeseen consequences of too many owners owing too much is that it makes the whole scheme vulnerable to predatorial investors who, in extreme cases, can take control of the block and push through work that requires special levies, forcing more owners to sell. Once they have bought enough properties at knock-down prices, they then sell or plan the whole block for demolition and rebuild at a massive profit.
I assume that any developer can buy a unit and then take the strata to NCAT and get an order that the defects must be fixed.
What will affect Australia in the next year is that problems in the American economy will spread to the world. When it happens it will probably happen quickly. Business will decide that they don’t want to invest, which will increase unemployment, which means less demand in the system. It is hard to predict these things, our economy is very much driven by greed and fear, and you never know when fear will take over.
Having consideration of the situation I’m in, this makes good sense. The government moves in, fixes the building and then charges a rate of say 4%. After it is finished then owners can stay or leave. The main problem is with the banks. I think they would come to the party and cut mortgages because they can do badly out of owners being forced to sell. At the moment we have probably lost 40% of the value. If there are forced sales then it is going to be a lot less. When people have 80% loans and only a few years, say 5, then their equity is only 25%. So the bank are down 15% of the purchase price plus they will be paying any associated costs.
SCA-NSW, surely?
No, is labelled with REINSW and has an October 2023 Copyright statement. On reading it gain I realised that the owners are the Principals and we can terminate with 3 months notice after the initial 3 year period. I can scan it, remove our strata details, and send it to you.
Do you mean that you will lose the levies in arrears because there will be nothing left from the sale after the secured creditors are paid?
Yes, it is a strong risk. Most of our recent owners would have about $150k in equity at the original purchase price, but some would be less than $100k. Due to our high strata fees, we already have drops in prices of $100k and it will go lower.
There should be a Management agreement. The one we have is the standard REINSW agreement, and what you ahave for the term of the agreement depends on which of the 5 options. Our previous one was for 3 years and may continue for a further 3 years after that. We would sign a new agreement at each AGM. We eventually terminated the agreement during the time of the agreement without any penalty. There were so many cases of bad management that he was in breach of the agreement anyway, so he wouldn’t have wanted to take action.
Assuming that most owners want to change, what I would do is get a copy of the agreement. Find a strata manager that you want, and ask them what options you have. A good one will set up an EGM with the right motions and notify the owners, and change will quickly occur.
A resolution was passed to re-appoint the strata manager, therefore that is what the owners wanted.
Things go wrong, mistakes are made and the agreement wasn’t actually signed until later.
Now what someone could argue is that because the agreement wasn’t signed then it could be argued that some things done by the manager, and the payment of fees were not authorised, but someone would want to do so, and they would go to NCAT.
What the strata manager is saying is that in that situation then NCAT would simply rule that the agreement should be treated as signed a lot earlier. I would expect that they can. They will respect what the owners want.
The strata manager is a bit annoyed because he suspects that rather than leave this, that they will end up at NCAT which will be a nuisance and cost money.
So he is going to get rid of you, because he doesn’t like you anymore and suspects that you will keep raising problems that he feels are frivolous.
In ours there is a bit of anger, but it mainly seems to be against the former strata manager for allowing the arrears to become so high. I was worried but assumed that the strata manager had it all under control.
I’m starting to wonder if we are going to end up as a failed strata. The best outcome is that we are going to have a lot of forced sales, and some of those we are going to lose the levies that are in arrears. The banks are going to get battered, but they are doing quite nicely. My unit goes on the market early in the new year because I can’t cope with it anymore.
We switched to a new and well regarded strata manager. Previous manager would give the arrears information to the committee and I was careful not to share it. New manager allows everyone in the strata to download the current financials including everything.
If it is common property then you cannot put anything there. If not, there are usually bylaws about changing the external appearance.
To actually take action they would need to go to NCAT. It would be a waste of time for everyone because all that would happen is your brother would agree not to do it again.
The most important point is does he really want to annoy his landlord. At the end of his lease might he want to extend the lease. Maybe the landlord will find a way to make life difficult. Is it a small town and the landlord will make sure everyone knows that he is a difficult tenant. The easiest and most sensible thing to do is to dismantle them. If he wants to he could apologise for not checking with the landlord first.
I don’t have an understanding of strata law, but I think this would be difficult because the proportion of the strata fees paid is based on the allocation when the strata was set up. Also the other owners are not likely to agree to having their strata fees increased. When you bought, you agreed to paying that fee.
There is a legislated requirement that the strata should be kept in good repair. Get a lawyer and go to the tribunal, to get an order for strata to repair your building. Even if it requires a special levy, then it still has to be shared among all owners.