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It sounds to me, without knowing exact details, that the appropriate thing is to have this general meeting to approve a special levy to deal with the admin fund deficit/repay the sinking fund. Then, I would expect, with everything square again, when the time for the regular AGM comes around again, there would be a normal budget resolution at that AGM to approve the next year’s budget and raise a levy sufficient to cover that, or possibly a little more than just cover it, to build up a little reserve in the bank to cover cash flow through the year of routine, anticipated expenses.
It is not always necessary to levy an amount to exactly equal the budget. Sometimes you might have money left over from the previous year and a more than sufficient reserve in the bank and could levy a bit less than the budget. Other times you might levy a bit more than the budget to build up a comfortable reserve if the previous year went over budget a bit, eating into reserves. Our strata manager once advised aiming for 25% of a typical annual budget in the admin fund just kept in the bank to cover imperfect matching of the timing of income and expenses. I have tended to err on the side of caution and we have had around 33% in reserve in the admin fund. This year our proposed budget is balanced but the last couple of years we budgeted for slight deficits (levied slightly less than the budget) as we had more than needed in that reserve.
The sinking fund is separate and should not be dipped into to deal with day to day cash flow.
We are paying ~$25,000 for ~100 townhouses so that fits the range suggested below since that works out at ~$250/unit/year.
Sorry guys, one more question and hopefully answered by tomorrow, please cos big day on Saturday. Can someone be nominated for EC although that person is not present at the EGM due to change of meeting date at the last minute? Thanks.
Unless there is some weird requirement of another state (I’m in ACT) I don’t see why not. However, you would need evidence that the person accepts the nomination. If I were chair I would accept a written and signed extra statement written onto the end of a proxy form. EG. “I would be happy to accept nomination for a position on the EC at this general meeting. signed, Joe Blogs”
When the strata plan was built I would assume there was a part of the development approval that established that sufficient parking was provided to meet the likely requirements of the 16 lots. I would ask how much parking exists overall and what was implied in the design of the site about its use. Is it obvious that it was assumed that the 4 units would park on common property? Is there enough common property parking that all 16 units could be granted exclusive use of one space. Then 4 would have one common property space and 12 would have one common property space plus the space that is on their title. If it would be practical, done that way all units gain the same benefit from the common property.
The situation here is reminiscent of the situation we have. In our case a minority of units had spaces specifically to construct carports adjacent to the units shown on the unit plan and part of the title etc. The majority however simply had sufficient parking in a series of open asphalt pads on common property but none was allocated to anyone in particular. Over the years these were allocated on the condition that the unit owner funds the cost of carport construction and maintenance. Recently all but a few had such a deal. Then we some of the last applied to have the same benefit from the common property that the rest had they ran into resistance and (long story short) the OC discovered that none of the allocations had been properly granted over a period of 30 years. We then had no choice but to devise a scheme to correctly allocate all the previous allocations while also allocating similarly for the last few units without parking. In the ACT that required an unopposed resolution (not Special as in NSW) and it was opposed by a few owners who had the wrong end of the stick (they lost nothing etc). It required a tribunal ruling that their objections were unreasonable to fix the issue.
So, there might be a way to help out the 4 owners that nonetheless makes equitable use of the common property and benefits all. Then make sure you do it correctly! In our case the resolution given effect by the tribunal sets out conditions on the use of the common property parking spaces for limited purposes including maintenance obligations on the benefiting owners. The exclusive use does not preclude owners from allowing others to use their space or to rent it out.
If the bamboo affects only one lot and not the common property, why be concerned about it at all if the lot owner is not bothered? As a courtesy, just being helpful, the EC might inform the non-resident owner that they might want to do something about it. The EC could offer to be supportive of any action the owner wanted to take against the neighbour etc.
I think the EC need only get involved if the bamboo looks like affecting the interests of the OC as a whole, such as infesting an area of common property.
…We have put forward an agenda and motions and the SM has amended it for suitable wording. Now the questions is if the SM send out the amended agenda and motions without our approval, what can we do?…
If I were on the EC, I would very quickly send an email to the managing agent, perhaps CC’d to the agent’s boss, and CC’d to all EC members stating the EC has not yet approved the amended wording and directs the managing agent to not send the meeting notice until the wording has been reviewed and approved by the EC.
Be polite but firm but make it clear (without using this expression) that the tail does not wag the dog. Acknowledge their expertise but also assert that the ultimately responsibility lies with the executive committee and you wish to be certain of what goes out in your name.
The SM works for the OC not the other way around. I am not familiar with non-ACT details about delegation but I would expect that the EC and OC retains all powers they care to exercise if they consider it necessary even when some of those powers have been delegated for day to day purposes. So, if enough owners call for a general meeting you can have one. You can organise it anyway you care to so long as it is consistent with the requirements of the relevant Act.
In the ACT, the EC has to approve the proxy voting form which amounts to approving the agenda since the form lists the motions.
Consider that an OC might want to call a general meeting to decide to engage a different strata manager. If the SM were in charge you might not find that easy to do.
It seems very unreasonable of the agent to not accept a direct deposit. It would be reasonable to expect you to include identifying notation (eg. ‘7SmithStreet-AprilRent’) so they don’t have to work hard to sort out which tenants have paid and which have not.
I’m not expert in meeting procedures but I would have thought you needed to have Standing Orders in place for a point of order to have any weight. I keep thinking we should have a set of standing orders available for Owners Corps to adopt but I wouldn’t know where to start.
Our owners corp at its first AGM in 1976 passed a resolution that meetings would be conducted according to Joske-“The law and procedure at meetings in Australi and New Zealand”. This is a little book about meeting procedures that has been around for a very long time and has been through various editions. My 90 year old father-in-law recently gave me a copy of the second edition that he got as an accounting student in his 20s.
Ideally, that should have been adopted as a By-law rather than just a resolution at the first meeting. Still, it has been occasionally useful for our chair to have a copy on hand that he can wave and quote when he says that he will accept an amendment to a motion or whatever.
I think there are various other more modern books along similar lines. To the extent that the Strata Act relevant in your state does not specify meeting procedures, owners could adopt Articles/By-laws/Rules to follow some such guide at its meetings. It would give a more objective standard by which the chair could assert some authority to control a debate or some owner to complain that a meeting was not properly conducted. Taking some well accepted reference is probable better than reinventing the wheel via a set of novel standing orders.
Resolving to discuss something doesn’t sound a resolution to do anything at all!
What about resolving to immediately spend up to some amount to take legal advice on defect rectification? or engaging some representation in legal action to have the orders enforced?
If there are orders made etc. then someone has been trying to do something.
@ccbaxter said:
I politely asked the Strata Manager in an email for more information on the agenda items for the big projects ahead of the AGM so I could arrive at an ‘informed decision’ on how to vote but he replied with one simple line, “These will be tabled at the meeting”. I doubt he even asked the EC.I don’t think this is good enough.
Can I propose motions at the meeting on the night to the effect that “I move that this motion be held over and not voted on because not enough information has been provided in time for owners to arrive at an informed decision.”
(Thanks PeterC, I will do this as well, while also hoping for more advice from Flat Chat readers, maybe even you, hopefully.)
I think your proposed motion could be put. It is a procedural motion. It has the virtue that you allow the possibility that the proposals could be worthwhile and that you might support them with more information. It is standard that procedural motions can be proposed, and voted on if someone seconds the motion, during debate on a motion that was on notice. One can propose that ‘the question not now be put’ which shelves the motion. Another form is a motion to ‘proceed to the next business’ IE go to the next item on the agenda. Again the main motion remains on the shelf for another meeting. Yet another form is to propose to ‘adjourn the debate’ which put the item to the top of the agenda of the next meeting and the justification could be to gather more information for an informed debate.
Such an approach has the merit of being more likely to be supported because it indicates that you are not necessarily opposed, only requiring more information before you can support.
Note, you need to line someone up to second your motion.
I am guessing the ‘low status building works’ are multiple, smaller, routine maintenance items rather than a few major urgently needed repairs. If so, why not get some information about their likely cost and put a proposal to amend the admin budget to have an increased maintenance amount to cover these things. Routine minor maintenance works might be needed pretty much continuously so it is appropriate in my view to have an admin fund amount for maintenance. If there is a strong view held that the sinking fund needs to retain a larger contingency amount than you think necessary beyond the identified matters in your sinking fund plan (your have one?) it might be better to argue about that another day. In the meantime, you might not scare the horses so much with a motion to increase the admin fund budget by a smaller amount to do a list of routine maintenance items. A minor amendment to the admin budget, rather than a whole-sale revamp of the sinking fund plan might be easier to sell and harder to object to.
If it is a resolution of a general meeting to authorise spending on those ‘low status items’, then the EC is obliged to act on it.
People can get funny about sinking funds. Some want to accumulate but never spend from it. Then, when it is suggested to spend from the sinking fund on an item they don’t approve of, they get a ridiculously inflated quote to do unnecessary works that they claim are urgent (but are not) which would make the item they don’t like unaffordable. I suggest you take the possibly easier route to getting the ‘low status’ items done. You may be surprised that people grumble and moan but are then happy when they see all the minor bits of maintenance actually getting tidied up. Then they get excited and more supportive of actual improvements, not just maintenance.
@newlsie said:
We have an EC where 2 members want to comply with CTTT orders to maintain common property and install windows agreed at a 2010 AGM and the other 3 from a part of the building where they are not affected want to spend money on lawyers to fight this…Over one third of the owners have written in to complain but still they continue!!!In the ACT, a petition by 25% of owners can force a general meeting to be called. Assuming it is similar in NSW, it seems you have the numbers to call a general meeting at which a resolution could be put that the OC recognises its obligation to comply with tribunal orders and directs the EC to get on with it. The EC will be obliged to act on the resolution. That also might protect the OC as a whole for any legal consequences of not following the tribunal orders since it would be clear that the OC was trying to comply.
You could ask a strata lawyer to look at your question. In my experience you can give them the question and ask them to quote on preparing a response. If the amount is something you could afford you can go ahead, otherwise you have lost nothing.
Alternatively, you could just argue you case on the night, that there is insufficient documentation for owners to make an informed decision and should consequently adopt a conservative position. You may or may not persuade others on the night.
A strong chair who imposes far more formal meeting procedures than might previously have been necessary so that interjections are not tolerated, people get to take turns to speak in favour or against a proposal and so on. The chair could warn the person in advance that poor behaviour will not be tolerated.