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Right, ok. Bearing in mind this is not legal advice.
The failure to specify which section applies re termination doesn’t necessarily mean the agreement is null and void, if the strata manager has been acting as strata manager then he has been performing services under the agreement so to that extent the agreement is “live”.
The real issue is which clause applies to termination, there are three options. Ordinarily where there has been failure to specify (where there are options), an agreement is read down, so the most onerous clause/s won’t apply. Here the last option effectively gives the manager a term of 6 years, or maybe 3 years and 3 months, it’s badly drafted. Arguably that wouldn’t apply because it hasn’t been specifically agreed to by the parties. This is presuming that there hasn’t been anything else said or written, e.g. an email from an EC member saying that clause would apply.
The first and second options are not as onerous and therefore one of them would likely apply. The first one lets you terminate at any time provided three months notice is given, the second provides that the agreement expires at the AGM at which time presumably you would have to refresh the agreement.
Clause 15 read with the first and second options is a bit confusing. Under the first option you can’t say there is a term (note in clause 15 it states “prior to expiry of its term (if any)). If the second option applies, then if you terminated prior to the AGM then on its face you would have to pay out the term up to the AGM.
Sorry if that is as clear as mud, but what I would be saying to the strata manager is could he/she advise you which clause in relation to the term does apply, i.e. what exactly is the term of the agreement. They won’t be able to tell you. If they can’t tell you, then on what basis are they seeking to enforce clause 15?
No, you’re right. The EC/OC doesn’t have a contractual relationship with the tenants, the landlord does, and the landlord has a legal relationship with the OC.
The EC certainly can’t tell tenants to perform duties, that is just ridiculous. They can’t tell owners to perform duties either, e.g. rubbish, gardening etc. In both cases how they are going to make them comply? A strata plan isn’t a police state.
It doesn’t matter what clause 15 of the REINSW proforma agreement says, what does clause 15 of your agreement say, and what does clause 5 say, i.e. what are the three options/what does the clause deal with?
The only relevant agreement is the one you have, whether or not it is unenforceable.
Does clause 5 deal with the term of the contract?
An EC meeting is not the same as a meeting of the Owners Corporation. A meeting of the OC is a general meeting, and certain requirements are applicable to that. An EC meeting is a meeting of the members of the EC. The EC makes decisions on behalf of the OC, with certain decisions being reserved to the OC in a general meeting.
EC meetings can be held either in person or by paper and/or electronically, i.e. by email. An OC meeting cannot be held by paper or electronically, although you can have a “dummy” OC meeting where everyone sends in proxies.
What you have here is a failure of the notice requirements. The issue then is whether the decision would have been any different had the notice requirements been met. The primary people who may have cause for complaint are the EC members, although other owners do have the right to give notice that they object to a certain decision of the EC being made. If that is not the case, then at the most it is a procedural irregularity and in any event as Jimmy points out, all the EC has to do is have another meeting and ratify the decision/s.
If you are effectively unable to access your garages, then that is probably sufficient grounds for rectifying the situation. There are five of you who can’t use their lots (assume they belong to each owner) for their intended purpose, so the OC has a responsibility to ensure that they can. It’s a bit like being on the top floor and the only way up being impassable.
If that (air) space is shown on the strata plan as common property, then the owners corporation owns it, not the lot owner. Taking another example, say there was a laundry in a block of apartments that was common property and an owner converted that laundry for their own use, then the OC could take action against that owner in relation to their use of that space. There is no statute of limitations because the strata plan shows it as common property.
There have been cases on this, in the ones I have seen the person has had to reinstate the common property to what it was. I don’t know how that would work with air space, but in theory the principle should be the same. This is presuming when the renovations were done that no special by-laws were created giving the other owner exclusive use of that air space, but that would have been noted on the strata plan. So I suggest you have a look at the strata plan.
Jimmy is right, you don’t want to get into a war with your neighbour, it could cause you a great amount of grief. So think about how you want to approach this very carefully.
The mediation step is compulsory (although you can ask the Tribunal to allow you to skip that step) but attendance is not – the advice given by Fair Trading is not correct. If someone applies for mediation and you are the other party you can decline to attend, in which case the person who applied can then take the next step of going to the Tribunal.
We were recently the subject of an application for mediation. The letter specifically states that you can decline to attend. That is the nature of mediation – you can hardly force someone to mediate, at least not at that level. Of course if you decline, then it doesn’t look that good.
Yes anything that occurs at the mediation is confidential, all the people attending have to sign an agreement to that effect.
In terms of who you take action against, no you can’t take action against the EC, the other party is the Owners Corporation. As the EC represents the OC, it is essentially the same thing anyway.
As a starting point, the Act doesn’t say that the EC can’t choose colours etc. Going from there you have to look at the specific scheme, how large it is and the delegations and limits you have in place. The EC stands in the shoes of the OC, other than in relation to specific decisions set out in the Act.
Therefore unless you determine at an AGM that the EC can only decide certain matters or certain things have to be determined by all the owners, the EC has the power to make the decisions. The EC can also delegate specific decisions to one or more people. For example in our block we recently had to replace a major piece of common property. Two of us made all the decisions associated with that, which included types of materials used, paint colours etc. The EC signed off on the plans, the design/scope of the project, and the general colour scheme, but from there it was up to us. We have one owner who has complained about numerous aspects of what we have done, but everybody else loves it.
Democracy is a wonderful thing but in practice if you want to consult everyone you will never make any decisions and/or the end result will be a mess – as they say a camel is a horse designed by committee. That is not to suggest that people shouldn’t have a say, but if we had gone down that route we would still be arguing about what screws to use.
It doesn’t. Someone has to choose the replacement, and there is nothing that limits you in terms of colour/type.
I’m not sure why the DOFT says that – the CTTT can’t award damages but a court can, and there have been a number of cases where damage to a unit has been caused by defects in common property, and the OC has been ordered to pay. As a general proposition if damage is caused by one party, generally that party is responsible for fixing it.
For example https://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/nsw/NSWSC/2010/68.html?stem=0&synonyms=0&query=NicitaThe OC has an obligation under section 83 to insure the building under a damage policy. Section 82 sets out what a damage policy encompasses – which includes repair and restoration of damaged parts of the building. I’m not an insurance expert but if you are in a flood area, surely you would have an obligation to insure against that known risk? If so I don’t see how the OC can opt out of it – $180 each is not a lot of money.
Under section 81 the building includes:
(a) owners’ improvements and owners’ fixtures forming part of the building other than paint, wallpaper and temporary wall, floor and ceiling coverings…
Which means that the policy would not cover a range of things inside a lot that may be damaged in the event of a flood, like carpet, but would cover certain other items. So ideally the OC would take out insurance which would be supplemented by the owners taking out insurance to cover what isn’t covered by that policy.
If the damage to your lot is due to a defect or defects in the common property, and from what you have said it sounds like that is the case, then the Owners Corporation is responsible for the cost of repairing the damage.
To that extent it is irrelevant whether the things in your lot form part of the common property, or whether strata insurance covers it. Even if their insurance doesn’t cover it they are responsible.
For example:
– leak in roof which is common property causing damage to inside of unit – OC responsibility to fix damage.
– a fire caused by a fault in something that forms part of your lot, e.g. wiring installed by you, causing damage – your responsibility.
KP I think we share the same basic concerns but a few points:
– there is no requirement in the Act that all owners vote as to whether funds be invested and if so how. The section says the OC – this may be the EC, it depends on whether any limits have been put on decisions they make. The owners may decide they want it put to a resolution at an AGM, that is up to them;
– a strata manager may be empowered to invest funds on behalf of the OC, it depends on what delegations have been given to him/her. For example, the owners could resolve at a GM to invest the funds in a term deposit and for the strata manager to effect that investment for them.
– the money is trust money, special obligations in relation to accounting for those funds flow from that. Note that any investment should be in the name of the OC, not the person. Otherwise if the person went bankrupt you would have a hell of a time proving that the money didn’t belong to them.
– personally I would never agree to a single person on the executive committee having control of the investment of funds. You need to ensure there are checks and balances, e.g. have two people who are signatories to an account. In addition to that I would expect to have regular reporting in relation to the investment, i.e. at every EC meeting, backed up by statements etc.
– refusing to pay levies isn’t really going to achieve much, it’s still a debt you owe the OC. If the investment went missing and the OC was in a black hole, you would still be liable to make up the shortfall. Yes the OC could pursue the errant investor, but that is a separate issue.
If it were me, I wouldn’t be waiting for the next EC meeting, I would be asking for one to be convened asap.
$700 seems a bit on the high side for an EGM. We are in a block of 9 units and have had a number of managers over the past few years (long story). They generally quote $250 to $300 for a GM, but this can depend on where it is held, if it is offsite you pay for hire of a room which is a waste. Our current strata manager offers one EGM for nothing. The manager should have suggested doing it by proxy anyway.
Perhaps you should have asked for an estimate of costs first.
Section 73 of the Act deals with investment of strata money:
73 Can money in administrative fund or sinking fund be invested?
(1) An owners corporation may invest any money in its administrative fund or sinking fund in any manner permitted by law for the investment of trust funds or in any prescribed investment.
(2) Any interest received on an investment made under this section forms part of the fund to which the investment belongs.
I would be very concerned if I found out that the strata funds were being invested by a single person and there was no accounting in relation to the funds. As a matter of corporate governance you would expect a resolution to approve the investment of the funds at the outset, and ongoing reporting in relation to those funds. This is trust money, it should not be in the control of someone who has no obligations under any legislation, unless there are proper controls in place. This is distinct from a strata manager who does have obligations and if something goes wrong you have recourse.
There is nothing wrong with investing strata funds, we resolved to invest a set amount in a certain way at the AGM. Note also that the Act requires that you must invest the money in a certain way. You can’t just put it on the horses.
If I were you I would be raising it now and insisting on an answer – it is very puzzling that the strata manager is being defensive. If I didn’t get an answer I would be asking for the accounts.