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I may be opening a can of worms here, but sometimes when reading about a problem/issue on the forum, I think it would be good if there was a photo accompanying the complaint so readers can see for themselves exactly what is involved before replying with a remedy. Perhaps a link to upload a small jpeg????
Then one day the car space owner who moved the rogue car from their own space, will return to their own car to find it has been keyed, or brake fluid has been poured over it. With no CCTV camera to identify the miscreant, revenge can be a two way street.
Our unit block of 10 paid $3,500 to have child safety locks installed to comply with legislation. The contractor took all of five minutes in each unit (and the stairwell windows) to drill a slide in the upper sash and slip a plastic block with key in the slide.
The apartment block gets hot in the summer and most residents, who are tenants, have removed the blocks so they can open their windows completely to let the air in. These blocks have not been replaced when they have moved out.
I am on the EC committee and being a ‘compliance check’ nazi would be a futile exercise. I can only rely on the Certificate of Compliance that the SM has on file, certifying the task was completed as mandated by legislation, as sufficient that the OC is covered in the case of a mishap.
Most owners don’t attend the AGM and I have never even met them, so trying to have them comply with replacing the stolen/misplaced/ discarded locks would be a complete waste of time.
Since you need a 75% resolution in favour of conversion to strata, theoretically that is 3 out of the 4 units in your block. So if three of you are on board with the conversion you could out vote the one CT protagonist. However, dissension in a small block of units can all sorts of ongoing ramifications which can go on for years. Plus, this may be noted in the minutes kept on file. Perusal of these minutes by a potential buyer could put them off the sale if they become aware of discord and disharmony withing the block. Real estate agents are full of all sorts of ‘fluff’ when it comes to boasting about how they could sell an apartment for more for X,Y and Z reasons. There are lenders out there who will lend on a Company Title, it is just a matter of shopping around. If your CT block is in a desirable area of the inner west of Sydney, then you need have no concern about ‘protecting your investment’ with the prohibitive cost of real estate living in Sydney in 2020!!. Most CT blocks in Sydney are located in harbour foreshore areas around Manly and the Eastern suburbs and the owners have little to worry about their apartments diminishing in value.
It is going to cost a LOT more than $10,000 per unit. The apartment block has to be surveyed, legal papers drafted and meetings held and resolutions voted upon.
Are all owners on board with the conversion? I can’t actually understand why you are self managing. If dealing with tradespeople, council etc. is the issue, then have a Directors meeting and appoint a strata manager to take over the management of the block!
It doesn’t matter that you are Company Title. Strata managers service Company Title also! The manager will be responsible for the account keeping, ASIC notifications and the holding of the AGM every year. Call a few up and ask them to provide you with a quote and a spec on the service they will provide before deciding who to go with.
If it doesn’t work out with the chosen one, then you can vote to change at a subsequent AGM. You no longer have to pay the bookeeper and accountant as the strata manager should be performing these functions. At the last Company Title unit block I owned a unit in, finance for a mortgage wasn’t an issue for anyone and the units were selling for a mint (even unrenovated).
If you do go ahead with conversion, be aware that it is a long, complicated and expensive process.
To start with, you should take the time to ensure that each of the shareholders is able to establish that stamp duty was paid on the contract by which they acquired their shares. Without this proof, stamp duty can be payable on the historical share transfers prior to the conversion being able to take place.
The first step is to ensure that enough of the owners are onboard with the idea to convert to strata title.
You will need to get at least 75% of the shareholders (or, if a poll is called, 75% of the shares) to vote in favour of the conversion.
That said, in reality, you really need all of the shareholders to be behind the conversion. If one or more shareholders hold out against the conversion, the costs involved will significantly increase. Formal conversion is a two-step process:
- First the members must resolve to convert from company title to strata title; and
- Secondly, the members must lodge a strata plan at the Land and Property Information (LPI).
Before you can lodge a strata plan at the Land and Property Information, the Council needs to give a development approval to the conversion of the property from company title to strata title. It is important to have an understanding of the development process. Importantly, you will need to satisfy the following minimum criteria:
- Does the building comply with the relevant Building Code of Australia? Note that most buildings do not but there may be certain exemptions available.
- Is the building compliant with fire regulations?
- If the building has any tenants, are the tenant arrangements regulated low income housing? Low income housing is regulated by State Environmental Planning laws, which requires landlords not to convert properties from low income housing. This policy includes the conversion from company title to strata title. It is important that you understand what rentals are being paid at the time the DA is submitted.
- Sydney Water requires each lot in a strata plan to be separately metered. This may require the installation of either separate metering for each lot, or auto metering for each lot. Someone needs to manage this project as well as; a fire consultant;A hydraulic consultant in relation to the water metering;A surveyor to prepare the survey; and If necessary, a town player may be required in relation to the development application.
When the DA is obtained, the members will need to vote to approve the lodgement of the strata plan. The strata plan only needs to be signed by the company, as it is the company that still owns the property at this point.
If the company has any mortgages or charges over its shares, or has provided any mortgages over the property, the security holders will need to be informed and approve of the proposed conversion from company title to strata title. Bear in mind the company will need to supply the certificate of title for the land to obtain the strata titles. Without the certificate of title the strata plan cannot be lodged at the Land and Property Information (LPI).
As the property is currently owned by the company, the company needs to transfer the property to a strata plan. A transfer will need to be prepared. The transfer is from the company to the Owners Strata Plan.
The strata plan should be lodged with the Land and Property Information for a pre-inspection. This will ensure so requisitions are raised.
Upon registration of the strata plan, the titles to all the lots will be issued by the LPI. This means that the owner of each lot will still be the company in the first instance. There will then need to be a separate transfer from the company to each individual lot owner.
If an owner has a mortgage over their shares, the mortgage will need to be noted on each strata title.
- All owners should inform the mortgagee that the company is converting from company title to strata and should arrange to have new mortgage documents prepared and signed. Those mortgage documents would then be lodged with the transfer from the company to the owner of the shares and the mortgage would be noted.
- Stamp duty on the transfers from the company to the owner needs to be considered. If the individual owner can show that they have a contract to purchase these shares that has been stamped, there should then be no stamp duty payable. However some owners may have owned their shares for many years and the contract of even the stamp duty evidence may not be available. If they are unable to produce their contract, a separate application has to be made to the Office of State Revenue confirming that the owner has exclusive use and rights to occupy the unit and that there is no charge in the beneficial ownership of the shares compared to beneficial ownership of the strata title lodged at the start. Statutory declarations are usually required in this regard.
- The timing for the transfer for the lots into the individual owners’ names will depend upon the provision of the stamp duty declarations and the marking of the transfers from the company to the owner.
It is in all owners’ best interests to have the one firm of solicitors advising all of the owners in relation to the transfer from the company to ensure that the transfers are effected correctly, i.e. that their name is put on the correct title for the unit and any mortgages are recorded correctly for the unit.
The Land Title Office (LPI) charges for registering a strata plan $298.30 per unit. While the cost of preparing the strata plan is subject to a surveyor quoting on the work.
Once the strata plan has been registered and the company has transferred all the lots into individual owners’ name, the company has no need to exist.
Most company title buildings will not have any capital gains tax issues as the assets were acquired prior to the introduction of capital gains tax.
An accountant needs to be engaged with the aid of your company manager to take steps to wind up the company or to dissolve the company. This would require the following:
- A resolution of all the shareholders;
- A cancellation of all the relevant shares;
- The allotment of one share to one Board member; and
- The Board member taking steps to wind the company up.
The company may either be would up or dissolved, but more likely than not it would be dissolved.
Activity relating to the company’s resolution usually requires a solicitor experienced in company title matters;
A project manager should be engaged with the Board to do all the things associated with obtaining the development approval for the strata plan;
Managing the relationship with the Office of State Revenue in respect of stamp duty usually requires the company to engage its solicitors to manage the stamp duty obligations;
Managing the transfer of the land from the Owners Corporation to the individual owners is usually done by the same solicitor as it will be a cost saving;
Dissolving the company can be done in conjunction with the company’s accountant and/or the company manager.
Usually the timing in these matters will take approximately twelve months. The Board of the company should obtain an appraisal from a reputable real estate agent of valuer to confirm that the conversion will increase value to individual shareholders. A cost benefit analysis needs to be prepared as to the other costs associated with the conversion as to how the conversion will increase the value of the shareholders’ units. Solicitors will need to be engaged to advise the Board and the company in relation to:
- The meetings of the members;
- Submitting of forms to the Office of State Revenue and the payment of stamp duty;
- Submitting of the documentation to the Land and Property Information;
- Liaising with each individual shareholder about the status of the stamp duty on their contract to purchase the property;
- Liaising with shareholders who have mortgages over their shares to ensure the mortgage in correctly on the correct title of the lot.
In a Company Title unit block the owners are issued with a share certificate which is accompanied by rights in the Memorandum and Articles of Association to occupy exclusive space. The number of shares held depend on the size of the unit and any associated garage or parking space that may come with the unit. The more shares held the higher the proportion of quarterly levies paid to the Company for the upkeep of the building.
The Articles should specify the boundaries of the space or area held by his unit number (and all units) , as well as what areas are common property. The agent who manages your building may also have a building plan of the unit block from when the block was built many decades ago which determines boundaries. Every shareholder should be in possession of a copy of the Articles of Association when they purchased their unit. The managing agent should also have a copy on file as well as any minutes from AGM’s and Director’s meetings.
In any case, renovations and alterations to the laundry area could not be made without a shareholders meeting being held and subsequent resolutions by a majority made in favour of the work being done. I assume all other shareholders use this laundry, so they are hardly going to be in favour of their laundry being taken from them, not to mention another shareholder getting a benefit from the building for free. Humans are inherently selfish after all. Were such a resolution to be passed by a majority, the shares held to occupy the additional space would also have to be increased. This in turn would attract additional levies to be paid to the company each quarter. The paperwork to process such changes to the company and the necessary resolutions would have to be drafted by a competent lawyer, and the matter voted on by holding an extraordinary general meeting.
I am not sure why your other neighbours are unwilling to challenge him unless they are elderly and ignorant of the law in Company Title matters. If you are a Director, perhaps you could call a Director’s meeting to discuss the matter. If he is also a Director then you cannot exclude him from the meeting. Trust me….I have been involved with this sort of contentious space grab in a Company Title block in Sydney previously.
I suppose if you have no joy with any of the above suggestions, then you can file a small claims summons in the court or through VCAT. You don’t have to get a lawyer as you can do this yourself and the filing fee is claimable. Once legal action is commenced it might prompt someone into giving you back your mistaken payment.
I am surprised the hand santiser bottles are still on the concierge desks and haven’t been pilfered by someone since they are hard to source.
We had to get a new motor also. Whoever arranged the garage door tradesman to do the work at your unit block should have been proactive and collected the existing remotes from residents to be re-programmed to the new motor once it was installed, and then given back to the owners/residents.
Our OC purchased 12 new additional pre-programmed ones from the garage door people to be sold by strata, to people when required. This saved the call out fee charged every time the tradesman had to come out and recouped our money spent on new remotes which went back into the bank. I wonder what your people are now doing to access the garage if they do not have a newly programmed remote. Since it is a past event in your case, I would enquire from strata if everyone else has had to pay for their remote or some i.e chairman, have obtained freebies. If you are a tenant, I would keep the remote when you move out as it is your property and indicate to the landlord that they have to buy it from you if they want it back. Make sure you get a receipt from strata.
The intercom issue depends on the reason for the fault. Was it vandalised or sabotaged in some way? Why is it now not working when it used to?
Try opr.com.au and scroll down to the sinking fund forecast link. It seems O’Connors has altered its website from the above link.
Honestly,
You can do this yourself instead of paying a ‘consultant’ to do it. save yourself a few bob in the mix and put the money saved to something else your SMF needs. O’Connors has a free spreadsheet. I have copied the link from the internet. Anyone with a bit of nouse can fill in the blanks. Have a meeting. Discuss what needs to be done and how much you think it may cost. VOILA!!!
http://www.opr.com.au/assets/SinkingFundAssessmentProForma.xls
Your Articles of Association cover the rules to abide by in Corporations Law. Often these are old and never updated since the incorporation of the company (sometimes 50 years ago). Some older style units (in Sydney they are often around the expensive waterfront suburbs like Manly and Fairlight) are still company title. As I recall from my university days there is a section in corporations law under oppression of the minority by a majority of shareholders which is what it sounds like with 4/6 of the units being owned by one couple.
Your Articles should stipulate the quorum required for Directors meetings of which you are entitled to stand for election to be voted onto the board. The couple who own the four units should not be the chairman, director, secretary etc to the exclusion of the two others, as this creates an oppression of the minority. An annual general meeting should be held each year, with minutes taken and an agenda created beforehand with issues for discussion and voting. If the meetings are not being held in accordance with company law, then an application to the Supreme Court may be the only avenue. You would need to see a specialist lawyer in company title law for advice. The Local Court was, I believe, given some jurisdiction recently in some issues to do with disagreements between residents in company title unit blocks.The Chamber Magistrate at Manly Local court may be able to give you some preliminary advice free of charge, or the community aid centre in Wentworth Street used to provide free legal advice some evenings. I found it easier to sell up and move into a strata unit block to escape from my unconscionable neighbors in Fairlight.