[Millie]

Thanks for the advice.

I’ve been told aready that building management staff are going to be used to stop my tradies crossing Common Property to get to my Lot. 

[Millie]

Thanks Whale.

The neighours are pleased for me that I’m getting a new kitchen.  They’ve been warned about possible noise/other possible minor inconveniences.

Noise:  Short-term lets next door and down the hallway…don’t know who’ll have ‘checked-in’ when the work is being done so not much I can do there – I’ll be sad for them as they will have booked into their ‘hotel/serviced apartment’ in good faith.

Works are a replication of what I had done in my old flat 3-4 years ago with the exception that this time there’s no removal of a common property window sill.  All was passed as ‘ok’ back then.

The advice received via this website and the Owners Corporation Network is invaluable!  

Cheers

[Millie]

Thanks so much JimmyT. Appreciated, big time.

The renovations – “Ref:  Legalblah, blah, blah”:  

Lawyer/EC Secretary prepares a letter to me, dated last Thursday, and sends it to me after close of business on Friday.  He says: “my proposal may need to be considered at the next EC Meeting” – week after next.  I’m not to communicate with anyone but him…bless him!

I email back tonight, Sunday, with confirmation from the Installer that no common property is going to be altered, just disconnection/reconnection of water/electricity.  Kitchen cupboards affixed as per current kitchen, other cupboards in other areas are free standing, bathroom cupboard gets screwed to the wall, like all other bathroom fixures.

Auto ‘Out of Office’ reply from the Lawyer/Secretary tonight…out of office first half of the week…intermittent email contact…won’t be back until Wednesday.  Renovations due to start Thursday.

Do I push project back or soldier on?  I’ll be punished, with a Capital ‘P’, underscored 50 times, if I go ahead.  But then, “no change to common property, all work inside my Lot, trades people all have appropriate insurances.”

The ABC’s ‘Rake’ is much less predictable than this little Legal ‘drama’ – and much funnier.

Advice please?

 

[Millie]

Thanks guys.

Alas, there is no ‘bluff’ involved – we are deadly serious here.

The first episode was the Law firm trying to sue me personally.  Someone wrote something – a personal opinion – and the Law firm is trying to sue for defaming their Partner.

I was told at last month’s EC Meeting that a motion would be put to the Owners Corp at an EGM scheduled for the end of this month to apply a special levy so that the Owners Corp could sue me personally in the Supreme Court.  This is due to my attempts to convey to Lot Owners what’s going on within our Strata via a website.  I didn’t make a single statement; I simply collected information available on the web plus added documents that have already been circulated within the Strata – documents from the CTTT, EC Members etc – and popped all of this on the site.  My ‘opponents’ claim this is all defamatory.

I’ve submitted Motions for next the EGM.  I have prepared letters to Lot Owners telling them in the briefest of terms what’s going on in our Strata, plus proxy forms – it’s all ready to go.  Advice is:  Don’t do it.  They will never stop pursuing you because they simply can and they’re so powerful.

Now:  what about my renovations?  The other things are too, too debilitating.

[Millie]

Thanks Whale.  Very interesting.  It all helps!

In our case:

2011:  The Insurer offered us insurance, short-term letting was declared by the OC.  The Insurer issued PROVISOS with the insurance:

“..If the Owners Corporation approve such occupancy, then it is the responsibility of the OC to ensure the lot owners comply with all relevant laws and regulations pertaining to this type of occupation. Failure to do so may prejudice a claim under your Policy.” 

2012:  Insurer – “That the OC take reasonable steps to get offending lot-owners to cease this practice.  This would be in the form of a letter to all lot-owners confirming they are in breach of the occupation certificate on their building and as such must not continue to lease their lots on this basis.”

NO ACTION TAKEN BY THE OC

2013:  Insurer – “No change to the terms of our Policy.”  

Still NO ACTION TAKEN BY THE OC.

Late 2013:  Council issues ORDER TO STOP short-term letting, describing it as an “Illegal Use”.  

2014:  Those short-term letting are disputing Council’s Order – this includes every Executive Committee Member.

I’m not a heavy weight ‘Legal dude’, in fact many would, in line with the Industry in which I work, would put me in the category of a ‘professional air-head’.  That said, and considering the above, I’d still very much reckon our Insurance is compromised – full stop

 

 

 

 

[Millie]

Hi JimmyT

Although correspondence from the lawyer/EC Secretary isn’t on his firm’s letterhead, each piece of correspondence from him/them has a ‘legal’ reference number quoted on it. Correspondence comes: 1) via the firm/Lawyer’s business email, 2) a follow-up hard copy in the firm’s envelopes – one envelope for every topic arrives…so I could get a total of six pieces of correspondence from them in two days.  Perhaps this is meant to intimidate?  Who knows.

Instructions are that the correspondence go to him/them directly, and not via any other party eg, the Strata Manager’s Office.  I now ask that a copy of my correspondence be given to the SMA so it can be placed on the Strata’s files.  Don’t know if this happens.  

I did fax a request for motions for an EGM – sent via email a few weeks ago to the EC Secretary – to the SMA’s Office yesterday.  A ‘little birdie’ warned me that Motions must be received either by fax/mail/hand delivered – email won’t suffice.

The ‘confidential’ agreement between the Lawyer/his firm/EC Secretary and the other EC Members quotes a fee for their ‘Legal advice’ to the OC of up to $1,100+/hour.

Search of strata records – I asked specifically to see a line-by-line account of what OC monies had been spent on.  I also asked specifically to see all ‘Legal’ correspondence:  Strata Manager denied there was any further Legal correspondence, even though I have seen in the EC Minutes, legal correspondence to certain Lot Owners…this wasn’t produced; plus mountains of account folders were presented as I was ready to walk out their office, after asking for more than an hour.  I was told to simply have a search through them…

Motion that OC Lot Owners be able to access on-line details of expenditure was voted down unanimously at the last AGM.

Happy Saturday all

[Millie]

One hears that Melbourne City Council is going back to the Building Appeals Board on this.  We’ll wait and see what happens…

[Millie]

Thanks Whale. The other way around. Evidence was presented and it was the respondents who replied with false statements.

[Millie]

Thanks for the advice Stratafied.  Very much appreciated.

Latest from the Insurance:  “All claims submitted to us will be reviewed accordingly and in line with the policy contract in force between the insurer and the insured.”  That’s as far as they will go.  They won’t of course guarantee that there won’t be an issue.

Two major Strata Insurance Companies:  One rescinded their offer of insurance when short-term lettings were declared.  The second issued a policy but with a proviso that a letter had to be sent to all lot owners telling them they had to stop short-term letting.  (This hasn’t happened.)

Tucked away in the Insurer’s Policy Disclosure Statement:  One has to adhere to ‘any law’.  Short-Term Letting in our Residential property is classified as ‘Illegal’.  

I really don’t want to be arguing the case, when our building is insured for around $75 million (add contents on top) and other buildings are a laneway away.  One can call me a worry wort…  

[Millie]

Hi Whale

Word from the NSW Dept of Planning & Infrastructure:  “The long established practice of short term holiday letting has traditionally played an important role for holiday accommodation in NSW.  It contributes significantly to both local and state economies and for the most part occurs without incident… The Department of Planning and Infrastructure is also currently reviewing issues relating to short term holiday letting and how these are addressed under current planning legislation.”

I very much hope they’re not going to ‘fix it’ so that short term holiday letting becomes ‘legal’ across the board!  Not only does this blight cripple and buggar up Residential Lot Owners, these bods don’t pay any GST, they don’t have to pay for the infrastructure found in legitimate, purpose-built ‘Tourist’ facilities/properties, thus they effectively undercut legitimate Tourist Operators and deprive us of GST revenue.

Secondly, in your Insurer’s ‘Duty of Disclosure & Policy Statement’ there will no doubt be something along the lines of:  “you or anyone doing anything on your behalf must obey all laws.”  If short-term letting is considered by your Local Council, the body granting the Development Consent on your building, as an ‘Illegal Use’ – as does City of Sydney Council – then I’d take this to be NOT obeying all laws = your insurer has the right to withhold payment in the event of a major claim.

Say a claim could be worth well in excess of $100 million plus in a large City-based building, where surrounding commercial and other properties are affected, which way do you suspect an insurer would jump?  Would they pay up, or simply opt out saying that there was an ‘illegal use’ going on within the building…

Jimmy, I agree with you:  If owners/tenants are in residence and they rent out their spare room, this is along the lines of house/flat sharing etc.  Same as when friends/rellies come to stay for up to a couple of weeks…building management advised…etc.  The problem is when flats are let on a quasi ‘hotel type’ basis with little to no supervision.  People ‘checking in’ to our property are constantly amazed to find that people live in the building; they understand it to be a hotel/serviced apartment complex.

Cheers all

[Millie]

Congratulations Whale on the passing of the by-law!

I’m about to put forward a Motion along the same lines, even though I suspect it will be resoundly defeated.

I’ve been down the Dept Fair Trading Mediation and CTTT Adjudication ‘road’ – if history repeats itself, you will get absolutely nowhere there.  No assistance was forthcoming to us. 

Under the present legislation – and I don’t believe there are plans afoot to address this gaping hole in the legislation – there is absolutely no minimum to what is considered a Residential ‘lease’. 

Will be watching this matter with great interest.

Cheers

[Millie]

I’m not sure exactly what illegal short-term letting has to do with sustainability?

Notice in Sydney’s SMH on Saturday:  “Sustainability Forum – Representatives from Airbnb, the University of Sydney and Garage Sale Trail chat about how the digital era has transformed the potential to share belongings.  Thursday, 7pm, City Recital Hall…Sydney”

[Millie]

Jimmy, your comment in ‘Parking thieves:  some strategies’ is so very interesting. 

Could the same thing happen…review of Local Government Act AND Strata Act…on short-term letting? 

There’s got to be a way that we can come at the Short-term Letting parasites – sounds like we need a pincer movement?

Maybe it’s time to start putting pressure of the NSW Minister for Local Government – Don Page?

[Millie]

And further to scotlandx’s email, if, let’s say, Council issues orders to ‘stop’ the illegal non-Residential operation (hairdressing salon or whatever), and the Exec Committee writes back to Council (on behalf of the OC) challenging Council’s orders, are they not landing every member of the OC in very, very deep ‘poo’ (can we swear?) if it ends up in Court?

If the Courts find in Council’s favour, how do we then split the whopping fines amongst OC Lot Owners, when some owners have been against the ‘illegal’ operation all along?

Just got to love the twists and turns in Strata Land…something to ponder every day!

[Millie]

I’ve spent more than two years on this subject and hope the following will help you NOT repeat the ground I’ve already covered.  Firstly, with regards to Kiwi Paul’s comments, which are all logical:

 

1) I’ve been told that short term letting is considered a buisness and generally their is a bylaw that requires approval by the EC for running a buisness from a lot.

Check with Council:  City of Sydney’s ‘word’ on short-term letting is that it is NOT a ‘commercial’.  They say:  

“If units are being let as short term accommodation, then that would be a use that is characterised as Tourist and Visitor Accommodation which is a use that is different from Residential.”

 

2) Short-term letting / holiday accomadation requires different fire standards and so I would have thought you should have some leverage here.

According to the Building Codes of Australia, Residential buildings are ‘Class 2’ buildings.  Short-term letting is a ‘Class 3’ activity and, yes, Class 2 and Class 3 buildings require very different infrastructure to meet Fire standards/regulations.  Melbourne City Council has just lost a case in the VIC Supreme Court when following this line of argument so ‘Forget It!’ for the present.

 

3) Your strata insurance is based on a residential complex and if you are doing holiday lets that is no longer the case and so your insurance premiums should go up (the extra payable by the holiday letting owners). – See more at: http://www.flatchat.com.au/forum/renters-rants/Supreme-Court-win-for-party-flat-operators/#sthash.iwZwwijq.dpuf

 

Here’s the screamingly obvious point, though I suspect those doing short-term lets will be absolutely deaf to this, as they are in our Strata.  As a member of an Owners Corporation (NSW), you must (legislation) insure your Builidng.  You also need to know that you have unlimited liabilty, so in the event where your Insurance Company doesn’t pay a major claim, every single one of you can lose everything you own/possess/have tucked in bank a/c’s and super funds.

In your Insurer’s Duty of Disclosure statement there will be a section along the lines of:

“You must advise Us immediately in writing of:

1.  All changes in occupation or circumstances to Your Insured Property.

2. Any change in information or details You have given Us in relation to Your Insured Property or You.

3. Any change that increases the risk of damage at Your Insured Property.”

And

“You must do the following things:

1.  Comply with the conditions and procedures set out in ‘The Insurance Policy’.

2. Make sure that anyone doing anything on Your behalf obeys all laws…

4. Take reasonable precautions to prevent anything which could result in a claim under the insurance Policy.

5. Tell Us as soon as possible of anything that changes the facts or circumstances relating to Your Insurance.

So, if your building is zoned by Council as Residential, and you’ve got people doing short-term lets, you are paying your insurance premium – yes, they’re always happy to take your money but you’ve been warned! – but your insurance is BLOWN.

With regards to assistance under the Strata Schemes Management Act (SSMA), the Department of Fair Trading and/or the Consumer Trader & Tenancy Tribunal (CTTT): you’ll get none.  My personal opinion is there is a loophole as wide as Sydney Heads and it’s this; according to Fair Trading:

“NSW Fair Trading cannot clarify what constitutes “commercial Purposes” as the Act does not define such a term.”

And

“The Act makes no provision regarding short-term leases or exempting short-term leases from the requirements of Section 119 (of the SSMA – registration of leases on the Strata Roll).  As the legislation currently stands Section 119 is applicable to all leases of logs regardless of the duration of lease.  This includes short-term leases of one night stays.  The Act makes no distinction of leases of a lot and makes no provision that such leases must qualify as a ‘residential lease’ to have relevance under Section 119.  The ‘licence to occupy’ description as pur forward by (an) Adjudicator…made in the context of the Residential Tenancies Act 2010, would not exempt a short-term one or two night stay under a lease from the requirements of Section 119.”

And

“There is no minimum term for ‘length of tenancy’ as long as both parties agree to the period (i.e. 2 weeks, 12 months or any other period as agreed by the parties) as long as the purpose of the agreement is for tenancy and not holiday or commercial purposes.”

You can bet that those leasing short-term aren’t complying with the bylaws:

1)  To notify the Owners Corporation of a ‘change of use’, ie Tourist/Visitor accommodation, and

2)  Under section 119 of the SSMA, notifing the Owners Corporation of all the ‘short-term leases’ they’re issuing, and

3)  Not giving their so-called ‘tenants’ a copy of the bylaws for the building.

– – – – –

The ONLY chance of help on this issue is COUNCIL.  

You have a legal and moral obligation to do this – legally you have to have your building insured and morally, you and every member of your OC can lose everything you’ve worked all your lives for if something happens and there’s a major claim against you.  You’ll be threatened, bullied, your name will be blackened, they’ll probably try very hard to sue you, if you’re in a big scheme you’ll probably get next to no support – absent landlords won’t know/won’t care, etc etc.  It’s a very, very tough gig.

Council has issued the Development Consent on your building.

I’ve seen recent Development Consents issued by City of Sydney where they actually state that the property can’t be advertised for stays of less than three months and any lease must be for a minimum of three months.

Older Development Consents don’t have this minimum provision – importantly, it depends on Council’s ‘INTENTION’.  Where your Residential building was/is zoned for ‘Permanent Residential Accommodation Only and not for the purposes of a hotel, motel, tourist accommodation, serviced apartment or the like’, the intention was that people use the property as their permanent place of residence.  There needs to be the concept of ‘permanency‘.  This means, as with some here, that a couple can have a retirment home out of town, and a city home, using their city apartment as their second residence.

When our situation is all ‘done and dusted’ it’ll be appropriate to write a Guide on the subject.  I’d do anything to avoid others living what’s been thrown about here.

Get moving, and good luck!

 

 

 

 

 

[Author]

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