[Loraine Booth]

Hello sun consulting

 

You may both file an application at the Department of Lands to terminate the strata scheme pursuant to section 51A of the Strata Schemes (Freehold Development) Act 1973.

Jimmy T is correct.  The application must be signed by all owners and each registered lessee, mortgagee, chargee and covenant chargee of a lot or a registered lease.

Upon winding up the strata scheme, the funds are distributed and all debts paid in accordance with each lot owners unit entitlements.

With respect to solicitor’s advice, it is up to you and the other owner how you want to share the costs.  There is no set precedent.

You would want to make sure that termination is viable and that where elements of common property are shared they can be effectively separated.  You would need to discuss this issue with a builder or consultant and a lawyer.

The costs you would need to consider are for Council consent, surveyor (where a plan is required), an accountant, any stamp duty implications and Department of Land fees.  Lawyers costs would be in the vicinity of $10,000.00.

 

Loraine Booth

Lawyer

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[Loraine Booth]

What is majority? said:

Hi all, our Executive Committee has 8 members in a strata of 27 owners.

Do we need 4 OR 5 votes out of 8 in order to achieve a 'majority' vote so that we can act on issues?

With the chairman being unable to give a casting vote, does that mean that if we have 4 votes out of 8 with one of the vote belonging to the chairman, then we can't proceed? That we can only go ahead if we have 5 votes out of 8 if it includes the chairman's vote?

Sorry if it sounds confusing.

Dear Guest

 

Good question.  You need a quorum of Executive Committee members to convene a meeting.  A quorum is one half of the members (so 4 in your case) – see clause 9 of Schedule 3 to the Strata Schemes Management Act 1996 (the Act).  The quorum requires a majority vote in order to pass a resolution.  This means 51 per cent of those present. (see clause 11 of the Act). 

So, lets say all 8 members are at the meeting.  The Executive Committee requires 5 votes to pass a resolution.  The Chairperson only has one vote and not a casting vote (unless he is a substitute for another member who is absent, then he will have two votes).

Even if you have the bare quorum (4 members), the Executive Committee will require 3 votes to pass a resolution.  

Each member has 1 vote.  Poll votes do not apply at EC meetings.

 

Loraine Booth

Lawyer

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[Loraine Booth]

There is probably an easier way of appointing the office bearers.  Section 18 of the Strata Schemes Management Act 1996 (the Act) states that the office bearers must be appointed at the first Executive Committee Meeting.  Given that this has not occurred, the Executive Committee should seek to convene a further meeting to sort out the differences.  In the absence of the Secretary (which is the case in your circumstances) any Executive Committee member may convene a meeting where he or she is requested to do so by not less than a third of the EC members (see clause 7(1) of Schedule 3 to the Act).

I suggest that each EC member submit to the Executive Committee their Curriculum Vitae (which may be attached to the Notice of the next EC meeting).  Whoever is best suited for each office bearer's position should be nominated to that position.  For example, a person with an accountancy background will be best suited to the position of treasurer and the person with an administrative background more suitable to the position as secretary.  A person with experience in the board room or corporation conduct would be most suited for the position as chairperson.  Obviously, not all members will be an exact fit, however, it is a matter of discretion and experience. 

If the matter is still not resolved thereafter, I suggest that an application be filed pursuant to section 19 of the Act at the Consumer, Trader and Tenancy Tribunal for an order that a further EC meeting be convened and that particular persons be established to the office bearer's positions based on their background knowledge and experience.

 

Loraine Booth

Lawyer

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[Loraine Booth]

Hi Tosa

 

Presuming that the courtyard is on title of your lot, you will need to apply to the owners corporation to make a by-law entitling you to carry out building works pursuant to section 52 of the Strata Schemes Management Act 1996 (on the basis that the strata scheme is in NSW, although, other state legislation will provide for similar arrangements).  This provision empowers the Owners Corporation to confer on you certain rights of exclusive use and special privilege with respect to the common property to enable you to carry out works to your lot.  The Owners Corporation must make a by-law of the sort in a general meeting by virtue of a special resolution. 

Provided that you are not proposing to exclusively occupy a particular area of common property (for instance, building into the air space above the boundaries of your lot) or the proposed construction will not detract from the appearance of the strata scheme, then the Owners Corporation may approve such a by-law.  (Notwithstanding this, if you offer suitable compensation, the ulterior position may be more palatable to the Owners Corporation).

Ordinarily, the by-law will require you to provide indemnities in favour of the Owners Corporation in relation to damage to common property (such as external walls etc) and you will be required to provide evidence of local government approval of the works prior to carrying them out.  Ordinarily, there will be further terms relating to the conduct of the works (ie. control of noise, transportation of building materials etc).

In terms of an amendment to the strata plan, if the total dimension of your lot is not changing, then, once the works are complete, you may lodge a building alteration plan at the Department of Lands recording the amendments to the boundary of the inhabitable area of your lot (although this is not necessary).  There may be some issue with the effect of the alterations on the unit entitlement of your lot (for instance, the Owners Corporation may consider that the value of your lot has risen thereby creating a disparity with respect to the levies which you ought to pay). 

The foregoing issue, however, digresses from your initial query.  Should you require advice concerning this matter or you would like assistance with the drafting of an appropriate by-law, we would be happy to provide our fee estimate.

 

Best regards

 

Loraine Booth

Teys Lawyers

[Loraine Booth]

Yes, I agree.  You should engage a specialist strata searcher to search the books and records and provide a report with respect to the financial position of the strata scheme, whether there are any past or current disputes (both legal and personal), by-laws including those conferring rights of exclusive use of common property on one or more lot owners; amount of levies set per quarter for sinking and administrative funds and the potential for special levies. 

You may also wish to check out austlii website and search for any cases before the Tribunal or Courts concerning the strata scheme in which you propose to purchase.  The results of such search will provide an indication as to whether the Owners Corporation could be potentially liable for damages and costs (for instance against an aggrieved lot owner).  

Primarily, your strata searcher should look closely at the last budget and the balance sheets to ensure that the Owners Corporation's spending is in line with the budgets agreed upon by the owners at the last Annual General Meeting and review any unusually large expenditure (both current and proposed).  Generally, the financial accounts speak for themselves.

In addition, review the Executive Committee minutes of meetings and ascertain the types of decisions the EC is making.  For instance, is it unreasonably litigious or agreeing to inappropriate items of expenditure. Question whether the Executive Committee is restricted in its powers by the Owners Corporation including any limitations on spending.  

Finally, the strata searcher should review any reports such as engineer's reports with respect to the structural integrity of the building and ascertain if any claims have been made on the strata scheme's insurance. 

[Loraine Booth]

I'm not certain about the Western Australian position.  In New South Wales, however, where a contribution, which is not a regular period contribution (ie special levy), is payable by the vendor and the vendor discloses that contribution in the contract for sale, the amount is adjusted between the parties as at the settlement date.  If the contribution is levied before the contract date but not disclosed in the contract, the vendor is liable to pay the full amount.

You will need to look at the standard terms of the contract for sale in Western Australia under adjustments or apportionment of charges relating to the property.  The Real Estate Institute of Western Australia may further be able to assist.  I apologise for the delay in posting this answer as I understand that settlement on your transaction may now have already taken place.

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