[leif]

Strata Schemes Management Act was clearly designed for the protection of a very limited class of persons, owners of lots in a property registered as a strata plan

The mismanagement of the property and destruction of the value of the lot WAS precisely the harm that the Strata Schemes Management Act was designed to avoid.

But where the limits of those breaches of duty exclude a particular situation or a particular owner, the breach of duty of breach of statutory duty WAS a weapon in the owners’ options to enable enforcement of private rights given by the law.

 

With the new change of law

 

That in any event the owner was not entitled to damages for breach of statutory duty by the owner’s corporation

 

Jimmy said: So again, please, unless someone has a legal opinion to the contrary, can we stop arguing about the semantics and start thinking about what that means to the majority of strata owners in this state.

 

Jimmy I think with no damages for not following the SSM there clearly will be less care about SSM in the future. I assume the new finding does not exclude fines that at best are miniscule in comparison to the damage done.

 

Jimmy I think it means significantly increase of risk of diminishing the value of each individual lot and shorten the life of the property due to no damages applicable, when not maintaining the property to the standard and functionality as present when registered as a strata plan and doing un-authorised changes.

 

Jimmy I think the SSM would work if there were any way of enforcing it as even the basics seems currently ignored.

• The EC is a committee and anything under the name of a committee must be voted on and minuted
• Anything by the EC in the name of the owners or delegated must be in an detailed agenda to allow the owners to object prior to the vote
• A detailed budget must be produced at the AGM
• A ten year maintenance plan must be in existence that has been approved by the owners at a GM
• Owners right and when only the owners has the delegation

 

Frequently the EC is mentioned as the source when it never has been on the EC agenda or voted on or minuted

Frequently maintenance and changes are done without the owners being informed

At best the budget states maintenance but no detailed information is given nor the costs for items

Although an obligation since 2009 most owners has never seen a ten year budget and even less owners approved one even less seen the ongoing balance for specific maintenance saved for.

Most items that requires the owners approval is done by the EC without any information before the action

 

If owners was given the basic information owners would know if maintenance was carried out and the EC would be seen for all their actions and inactions.

 

Jimmy I think my question is how do we ensure and find out that even the basics maintenance is implemented and owners informed today, with currently no risk of damages payable by the ones breaking even the basic rules?

 

I am not surprised owners refuse to believe the change has occurred and I do see it as a true picture of the reaction at first I was there too and had to read the court document as I “could” not believe the true comments. And I do agree with Jimmy we should be thankful for the contribution to this site by legal people.

 

[leif]

The SMA states

62 What are the duties of an owners corporation to maintain and repair property?

The Court case states in the conclusion that in any event Dr Thoo was not entitled to damages for breach of statutory duty

But does that not mean that in any event Dr Thoo was not entitled to damages for breach of statutory duty as the duty had not been breached

Or does it mean as mostly assumed that in any event Dr Thoo was not entitled to damages for breach of statutory duty as damages are not awarded for breach of statutory duty

The latter has significant impact way beyond Strata on all corporations

[leif]

In a NSW Supreme Court case an Owners Corporation was held liable for repairs and maintenance works, legal fees and substantial damages in favour of a lot owner as a result of its failure to properly repair and maintain the common property of a strata building in a timely fashion.

 

The ruling included a mandatory injunction for rectification and loss of use damages of $150K with additional damages of $250K if repairs not performed within 3 months.

 

The ruling made it explicit the strict duty to repair and maintain Common Property. It stated that this duty is not one to use reasonable care to maintain and keep in good repair the Common Property, nor one to use best endeavours to do so, nor one to take reasonable steps to do so, but a strict duty to maintain and repair the common property without delay.

 

Reference https://www.stratafinance.com.au/

[leif]

Although maintenance of common property is an obligation the maintenance of internal walls and roof that is common property still is to some limit the owner’s responsibility.

In summary it is the size of the cracks that determines if the fix is owners or owners corporations responsibility

The extremes are easy, cracked paint owner, large cracks Owners Corporation but I have not seen any clear definition of in between nor any definition of large enough to change from owner to owners corporation.

[leif]

62 What are the duties of an owners corporation to maintain and repair property?

This clause does not apply to a particular item of property if the owners corporation determines by special resolution that:

(a) it is inappropriate to maintain, renew, replace or repair the property, and

(b) its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme

 

We are quoting a special resolution but that is only applicable if:

its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme

Not having seen the cracks do they not detract from appearance? And if not why raise the question?

[leif]

At first it seems simple but are we trying to simplify it to the point it does not work

To me there are three different cases:

1. Maintenance

2. Enhancements

3. Change

 

 

Light bulb breaks and is changed under maintenance not an option but an obligation

 

Light bulb breaks and is changed to a chandelier under maintenance an option but only under a special resolution

 

Chandelier breaks and is changed to a light bulb under maintenance an option but only under a unanimous resolution

 

Compensation and damages:

 

If the common property is not maintained an owner is entitled to both damages and compensation

 

Enhancement (positive) the majority rules and the losers do not get damages or compensation

 

Changes that has negative impact on a lot value without the lot owners consent and (any) owner is entitled to both damages and compensation

 

 

Exceptions:

Only a unanimous decision by the owners can change the above, and a new owner needs to be aware of this when purchasing into a property where this has been done

 

The ultimate law is the Australian law that does not approve of the majority stealing from the minority any local law that does not have all involved agreeing is overridden by the federal law.

In summary if you know the law has been broken you go to court and get both damages and compensation, if you think or believe the law has been broken you get advice and an arbitrator may be cheaper than a solicitor.

 

If you only want it fixed, and do not seek damages or compensation, the option of an arbitrator may be the simplest and quickest option.

 

An owners corporation must properly maintain and keep in a state of good and serviceable repair the common property (SSMA 1996 s. 62(1))

 

The reference is common property and all common features as registered as a strata plan.

 

The case in this tread seems to concentrate on “positive” change – enhancement and then apply it to all

 

PS I still know nothing about law but like all I have a strong opinion.

[leif]

The real problem is we are owners in a property registered as strata plan and have minimal knowledge about law but still have strong opinions.

The judge stated you cannot claim damages (I assume in his case he meant when request for change/ upgrade / enhancement was not approved by the owners) but at the same time did not make any statement about not being able to claim compensation for lost value when your lot lost value due too not being maintained as required by the strata Act. To read between the lines and state you cannot take a thief to court and should go to an arbitrator is a bit long.

But who knows this is the real problem as we all have different opinion and I do not know the law.

[leif]

There seems to be too much simplification even by the legal people that then makes it open for wrong interpretations and often the difference between a property registered as domestic is confused with one registered for other use.

I did believe: The domestic property is registered as a strata plan and all features are then referred to that day and have to be maintained without delay.

At the same time the property had each lot valued based on the dollar value of the lot, this may be totally independent of size and location but often has some relation but does not need to have.

From this lot value the unit entitlement is calculated. The unit entitlement is then used to calculate the lots share in all common costs.

But equally the unit entitlement is also used for the lots value in any vote (if requested by the owner). Often forgotten is the lot entitlement is also used to calculate any dividend distributed back to the lots.

The lot entitlement is also the base for the lots rights.

When a property with ten lots has a single power supply of 200 amperes it is normally divided by ten and each lot is assumed to have 20 amperes each but as normally not all lots use the power at the same time and the individual lot fuse is larger at say 40 amperes.

When calculating the lots share of power it should not be divided by ten but by the unit entitlement.

When some unit’s upgrades including installing air conditioner(s) they may exceed their share of power and the problem does not become noticeable until the total power requirement exceeds the 200 amperes available and the central circuit breaker blows.

This is clearly not a maintenance issue as the power available to each lot was known from the day the property was registered as a strata plan.

This is an issue of change of the building features to allow more power to each lot, this type of positive enhancement would most likely be through an owner’s special resolution.

The opposite of removing power say from 300 amperes down to 200 amperes would be classified as a loss of value to a lot and require an owners unanimous resolution.

 But neither cae is a maintenance issue as it is a change to building features.

Not being able to fit air conditioning was a feature you purchased into and if not acceptable you should have purchased a lot with this feature and cannot demand maintenance but can request a feature upgrade.

Not only air conditioning but other feature enhancement that these days are seen as normal includes building security by adding entrance door locks but neither is maintenance but an owner’s decision for feature change that cannot be demanded but only requested.

In our property the power was downgraded from 360 amperes to 200 amperes and all entrance doors locks where removed or made in operational all under maintenance and never minuted or told to the owners.

I must be wrong as I thought in NSW this is theft a criminal act in which property belonging to another is taken without that person’s consent.

With the locks removed we already have people sleeping in the stairwells, and with easy access we may build a swimming pool on the roof for the general public under maintenance.

NEXT?

[leif]

@Very Nice Landlord said:
apartmentalize

I appreciate your post & information however, as installing a new hills hoist clothes line in the back yard is adding something new to common property, we actually require a special resolution which is at least 75% of the votes.

Lot 4 has 45% & this has been the cause of many of our problems.  In effect, if Lot 4 calls ‘poll’ on votes (& has done so many times in the past) we cannot add to, change, or alter common property.

They have said that if/when they move back to the property, they will remove the clothes line.  They do not care that their tenants, with their 1 year old baby, value this clothes line greatly.

We have a drop down clothes line in the shaded side yard but the position in which we have installed the hills hoist (ie 3 of the 4 owners with a combined unit entitlement of only 55% WITHOUT authorisation) is the sunniest part of the back yard, near the common laundry which, to us, is common sense.  We have tested many, many, many things in the Tribunal but this time, we just DID IT as we are SO over the many months & application fees to achieve something that is so common sense, it is not funny.  Our view now, is let him remove it if he ever moves back (so not going to happen as he has a adult family of 4 that he squeezed into a 2 bedroom unit for 10 years) & we will address it then.

I am still interested in the view of others about his rationale of it not being nice for his ‘view’ of the property.  Also, some prospective buyers of Lot 4 have said “Oh, isn’t this back yard all our own?” & when told no, “Oh, so who uses this laundry & who uses this clothes line & do we have to see other people’s underpants on this clothes line?”  I admit, our property is poorly designed but I have seen so many other properties with facilities in the common back yard & their owners don’t carry on like this dude.

 

It is a losing batle

We have no common property clothes line but all Lots have a small balcony with a clothes line that can not be seen from the street but several still use the balcony for drying washing.

When the item is raised at the AGM the strata agent recomends no futher action that is supported by the majority of members attending that hang their washing on the balcony visible from the street

[leif]

Jimmy

I agree that under special resolution,
(a resolution which is passed at a duly convened meeting of an owners
corporation and against which not more than one quarter in value of votes is cast against),
changes can be made:

1. Under maintenance if its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from appearance of any property in the strata scheme.

2. Under property change for the purpose of improving or enhancing the
 common property.

But I do believe that for changes that affects the safety of any building,
structure or common property and does not improve or enhance the
common property a unanimous decision by the owners are required
as the majority cannot diminishing the value of a single lot.

This changes the required objection to one and a unanimous decision is not achieved.

[leif]

Flat Chat March 24 2012 EC has a false sense of security.

This seems to be a common issue, but has two answers the one given is commonly the only one addressed.

The issue answered is for building enhancement and the associated
cost issues.

But the reality is most buildings where originally fitted with locks that may have been only operational (lockable) for a short time (during construction).

The main reason for making the locks inoperational or in some instances removed are the issues addressed in the answer stating the inconvenience and the lack of an intercom system and the expense to fit one.

If the building did have locks fitted at the time of registration as a strata plan, the strata acts states that the locks should be kept in good and operational condition.

If this is the case only a unanimous decision by all owners can downgrade the building features like the removal of features like security.

If the door lock has a key hole and is now in operational or there is evidence that the locking feature has been removed it is a maintenance issue and no justification for maintenance is required nor can the downgrade be justified under any circumstances outside a unanimous owners vote.  

Typically this issue are hidden under maintenance but can be seen under the expenses of purchasing new (unlockable) locks commonly associated with replacing a “round” handle with a “leaver” handle under fire (exit) safety.
 

It seems to be a common issue where features has been removed without any documentation and later when an owner requests the reinstalment of the feature it is treated as a new feature and rejected as not economical to implement.

Asking for perceived new expensive features that may not be wanted by some seems a waste of time and effort.

The clever way may be to formally ask for a vote for the removal of the feature installed as built and present when registered as a strata plan and as you would vote against it would not succeed as it does not achieve unanimous status.  

As not maintaining and prevention of maintenance is an criminal offence it may quietening the loud opponents in the EC that commonly thinks security starts at the entrance of a lot.  

Finally if the locks are maintained as required, it is likely that an intercom system would be installed sooner than later.  

Or have I got it totally wrong?

[leif]

Resolution: A decision of the meeting (after taking a vote) and 25% or more owners present

Special Resolution: No more than 25% of votes are cast against and 25% or more owners present

Unanimous Resolution: No vote is against, and 25% or more owners present

As a normal AGM struggles to get the quorum 25% of owners is the Special Resolution then possible to be No more than 25% of 25% of owners vote against.

Or in plain English

If a quorum is at the meeting (25% of owners), it takes 50% precent
of the attendees (that is equal to 12.5% of the owners) to pass a special
resolution provided less than 25% of the attendees (that is equal to 6.5% of the owners) do vote against

And if based on majority of votes, and there are owners abstaining from voting the actual percentage of owners voting in favour could be even smaller.

This would then comply with the “definitions” of the ACT

And in the ACT

27 How is strata managing agent appointed

…. By a resolution at a meeting.

47 Amendment or repeal of by laws

An owner’s corporation, in accordance with a special resolution (does not refer to a meeting)

62 What are the duties of an owner’s corporation?

(3) This clause does not apply to a particular item of property
if the owner’s corporation determines by special resolution that: (does not
refer to a meeting)

The question is does it mean owners corporation or a quorum of owners corporation members when in some instances it says meeting and in other it does not.

I assumed it meant as printed majority of all owners, not as seems to be the case the majority at a meeting with quorum.  A possible change from 50% of owners to possible 12.5% or even less if there is owner present that abstains from voting.

I can recall but not find the source. When the required number cannot be achieved in a meeting and no negative vote is casted a second meeting can be called and only a majority at the meeting is required.

Hence my understanding owner’s corporation means Owners Corporation and not a quorum of owners unless specifically defined as in case one.

 

Thanks Jimmy for your first reply

[Author]

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