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edna – so far as I’m aware the following are the only exceptions to the legal requirements that apply to NSW Strata Schemes, where those comprise only 2 Lots:
- If the Lots are physically separated then the O/C doesn’t have to take out a Building Insurance or to establish and contribute to a Sinking Fund if both Owners so agree at a General Meeting (e.g. an AGM)
- There’s a difference in the method used for determining a quorum at General Meetings so as to avoid that resulting in less than a whole number (i.e. a fraction of a person). So the presence of both Owners will suffice, and;
- Whilst the normal financial accounts do have to be kept in accordance with Part 2 of the Regulation, if at its AGM an O/C decides that those will be audited (note that they can decline to at each AGM) then the procedures determined by the Federal Auditing Standards Board, and that an accountant would therefore apply to Strata Schemes, can be relaxed to some extent.
Hope that assists you.
PS @ 1610 hrs – after racking my brain to recall the above, I just remembered that Flat Chat has forum that’s dedicated to 2 Unit Strata HERE (hope nothing there contradicts me
)Your Owners Corporation (i.e. the 12 Owners) has entered into a Strata Management Agency Agreement (SMAG) with its Strata Manager, that in addition to it’s legal framework sets out what services will be provided and at what cost.
You need to obtain that SMAG from your Strata Manager or from the Secretary of your Executive Committee, who should have been provided with a copy at the time of signing, and have a very thorough read through the document.
There will be a number of attached Schedules, and to answer your question you’re looking for one titled something similar to “additional charges” or perhaps “associated fees” where as that title implies, there will be a number of listed services and their associated fees. Sorry for the vagaries, but our Plan’s self-managed and I haven’t see a SMAG for almost 10 years.
The two (2) fees to which your post relates appear (logically) to be for your Plan’s use of some strata management software for which your Strata Manager’s purchased a License, and for their fee to keep and report upon your Owners Corporation’s Trust Accounts (the Admin and Sinking Funds) in accordance with the provisions of the NSW Property, Stock and Business Agents Act (2002).
Whether those fees can be justified is a whole other question, but if they’re not listed in one of the Schedules to the SMAG then you have a case to have your Strata Manager reverse them, and if they are listed, then like a lot of other Owners Corporations yours will have to live with it until the date that the SMAG may be reviewed; that date too will be shown within the document.
zorg – you may receive more specific replies if you can you advise under what authority the fee it is charged, to whom it is paid, and the nature / extent of the renovations you propose?
Sasha – I assume that you’re aware of the process (in NSW) to obtain the Owners Corporation’s consent to an exclusive use arrangement, but briefly that requires:
- A Motion on the Agenda for a General Meeting, and the passing of a “special resolution” by a minimum 75% of those entitled to vote (i.e. including proxies), with that percentage being calculated from the units of entitlement (UoE) of those voting and the aggregate UoE of all those in attendance (a “poll vote”); and
- A further Motion passed by the same means (i.e. a special resolution) to approve of and register (with NSW Land & Property Information) a Special By-Law to cover the conditions of the exclusive use privilege, including responsibilities for the maintenance of the area and any fee payable by the beneficiary (i.e. yourself) on an initial and possibly an on-going basis to the Owners Corporation (O/C).
In answer to your question about how the initial fee might be calculated, a method that’s been discussed here in other posts and which it’s thought was established by the High Court for situations where a Lot is added to by an Owner, but is nonetheless applicable to exclusive use, is:
X = A – (B+C), where…….
X is the amount payable to the Owners Corporation
A is the market value of each Lot with the exclusive use area included as if part of it, as determined by a Registered Valuer
B is the the market value of each Lot as it currently is, determined as above
C is the costs to the proponent of, in this case, convening the General Meeting (unless it’s an already scheduled AGM), obtaining the Valuations, and having the Special By-Law legally prepared and Registered.
I’ve referred to an initial fee, because there’s also the matter of an on-going fee to reflect the difference between A and B above in the context of Levy Contributions, where a hypothetical increase in value of the Lot/s of say 10% might be expressed as an additional / separate fee payable (quarterly?) by the beneficiary to the O/C that equates to 10% of the Levy Contributions then applicable.
Not an overly simple process, but is nonetheless a way forward if you can garner sufficient support from another three (3) Owners (assuming equal UoE for each).
Div 4 of the NSW Strata Schemes Management Act applies
By way of background, a Certificate of Currency (CoC) is issued by your Owners Corporation’s Insurer, usually at the request of lenders at the time of a Lot’s sale or refinancing, and it confirms that there is a current policy in place and the amounts of monetary coverage for individual risks as of the date that it’s issued.
I’ve found that a copy of the receipted Policy Schedule will usually suffice in such circumstances, but if a CoC is requested of an Owners Corporation’s Strata Manager by a lender or by an individual Owner then the Insurer charges a fee for preparing it, and that’s what your Strata Manager is passing on, possibly together with their own admin. fee for making the (on-line) application.
So YES…. that’s common practice, and if there is an admin. fee from your Strata Manager then that would be declared in one of the Schedules to their Agency Agreement.
Kera – hopefully that Special By-Law was properly drafted to among other things make Owners responsible for the maintenance, repair, and replacement of these externally installed hotwater heater tanks, and that it was passed as a Special Resolution at a General Meeting of the Owners Corporation (not at an E/C Meeting) where at least 75% of those voting did so in favour.
Of course that SBL is still not legal unless and until its Registered on your Plan’s Strata Title by NSW Land & Property Information.
Kera – As you probably know, only (special) By-Laws that are Registered on your Plan’s Strata Title are legal, so right now the Owner who’s relied on a draft of that document to add his hotwater heater tank to the Common Property is (in NSW) in breach of Sect 65A of the Strata Schemes Management Act (the Act).
Problem is that a breach of the Act is not necessarily a breach of a By-Law, but presumably the installation of the hotwater tank has in some way damaged or defaced the Common Property, perhaps to the wall of the building by the use of screws or by placing pipework/conduit through the brickwork (?).
If that’s the case, and as the Executive Committee (E/C) has previously advised the Owner about where his hotwater tank should be installed, the most expedient action would be for the E/C to quickly convene a meeting in order to resolve that the Owners Corporation (via its Strata Manager if so delegated) issues the Owner with a “Notice to Comply” with By-Law 5, which among other things states that “an owner or occupier of a lot must not mark, paint, drive nails or screws or the like into, or otherwise damage or deface, any structure that forms part of the common property without the approval in writing of the owners corporation“.
Make sure that all Owners receive the Meeting Agenda at least 3 days in advance, as that alone may give rise to some positive reaction by the Owner concerned and perhaps gain some support by others for the E/C’s proposed actions.
By all means have a look through the Model By-Laws for one that may be more applicable, but in all cases the Notice must require compliance (at para 6) by the Owner removing his hotwater heater tank, and by restoring the Common Property to its original state.
In order to cover both bases, the E/C Meeting Agenda should include an Item to resolve that it concurrently writes to the Owner to advise him that as he’s additionally acted contrary to Sect 65A of the Act, if his hotwater heater tank is not removed etc in accordance with the Notice, then the Owners Corporation will immediately apply for a $550 penalty to be imposed on him by application to the NSW Civil and Administrative Tribunal, together with for Orders allowing it to remove his hotwater heater tank and to restore its Common Property, all at his expense.
No problem – I’m not sure what you mean by a “strata search report”, but if you mean your friend paying for and authorising (under Sect 108 of the Act) a professional to do a search of the Owners Corporation’s records, that may not be a bad idea as it would keep him at arms-length and provide evidence for provision at mediation.
I was remiss by not mentioning this in my last post, but Fair Trading has produced THIS excellent publication about matters strata, and I think that hardcopies would be available at those newly established Service NSW Centres.
Finally, you /your friend shouldn’t refer to the person who looks after his Strata Plan as being a “strata manager” – because he is actually a Member of the Executive Committee, and the use of any other “title” will only serve to confuse the issue particularly if your friend proceeds to mediation.
What a mess!!
It sounds to me like your friend needs to apply for the compulsory appointment of a “real” Strata Manager, and even though he could do that “first-up”, in the first instance I think it’s better for him to carefully package-up all the evidentiary information that he has about his Strata Plan being improperly managed, and to then follow the defined and well-trodden path to resolving that by as a first step, applying for Mediation (for the princely sum of $81), of what really is a dispute with his Owners Corporation over it not following the procedures required in the NSW Strata Schemes Management Act, including with regard to it not properly maintaining its common property, not enforcing its by-laws, and with not conducting and reporting its finances and meetings procedures.
Your friend can take you along for support, and you can both read a summary of that pathway HERE.
ArtC – don’t concern yourself about how to ascertain whether or not Lot/s in your Plan have been purchased illegally, but instead complete and lodge THIS form on-line and let the Foreign Investment Review Board follow-up.
Paddy – your Executive Committee and its Strata Manager have done precisely the correct thing in all respects, both procedurally and legally!
It sounds to me like the new tenants may be are aggrieved by the fact that they received the Owners Corporation’s advisory letter so soon after moving in, and in circumstances where they may well have been in the process of unpacking and moving things out of the garage to make room for their vehicle.
Irrespective of the fact that some Lawyers like throwing their weight around by the use of legalese such as “incendiary action” because they think that impresses and/or intimidates the recipient, if this one wants to additionally distribute his correspondence then I suppose he could do that by way of a letterbox-drop to other residents/owners, but the Owners Corporation has no obligation to do anything more than to ensure that everyone who read the advisory letter reads the response, or to in future correspond directly with him or indeed any other tenant unless of course it chooses to; so again you’re on firm ground both procedurally and legally.
He’s blown of steam in an effort to cover his embarrassment, so just ignore him, and hope that the vehicle soon fits inside the garage – because those By-Laws do apply!
In the first instance you need to speak to the Strata Manager to confirm that the courtyard is part of the Lot, and that the tree there is above the stratum of that Lot as you suggest.
If the above are confirmed, then you or your Strata Manager need to contact the Local Council’s Tree Preservation Officer to ascertain how much of the tree may be lopped and/or under what circumstances it may be removed entirely.
It was actually the responsibility of the Lot Owner to keep their tree regularly trimmed so that it’s kept within the stratum of their Lot, so again after confirmation as per the above, as that trimming hasn’t been regularly done and as the tree is now beyond that stratum, and as it’s in close proximity to the building, and as the external structure (i.e. the walls) of that building is Common Property, then subject only to Council’s advice the Owners Corporation can, at its expense, resolve to do whatever it chooses to with the tree; with or without the Lot Owner’s consent.
As for the Strata Manger – he’s employed by the Owners Corporation, that by the way is made-up of all Owners, and therefore his main responsibilities are to provide advice to the Owners Corporation to ensure that it manages the Property in compliance with the Act, and to do whatever it properly instructs.
So you and the other Owners don’t have to “present a case” to the Strata Manager with regard to the tree or indeed anything else, but rather, have him do some homework for you as I’ve suggested, and if everything is confirmed in terms of the ownership of the courtyard, about the height of the tree relative to the stratum, and with Council’s requirements, then you and like-minded Owners need to instruct him to obtain quotations for the tree to be lopped/removed, and to then submit to him an Item for inclusion on the Agenda for the next AGM to the effect that the Owners Corporation resolves (by a simple majority) to have the works undertaken.
In conclusion, I fully understand that Strata Owners (elderly or otherwise) can sometimes be influenced or even intimidated by their Strata Manager, and as hard as it may be in those circumstances, you and like-minded individuals need to make it clear to such personalities, in writing if that’s less confronting, that they’re your contractor; not your master!
Dudley – the provisions relating to Owners Corporations and their obligations regarding window safety devices can be found in the NSW Strata Schemes Management Act (1996) at Sect 64A and the phasing-in provisions are shown at Schedule 4 Pt 8.
As for the form of the standard Strata Management Agency Agreement, that document “template” in its latest form is provided to Strata Managers by their peak industry group, Strata Community Australia (NSW), and whilst it’s not available to non-members it can be quite easily found via an internet search, and its essential terms can be found HERE and YES, its entirely appropriate for you / your Owners Corporation to ask your Strata Manager for a copy of the latest version.
Dudley – in general terms, some Strata Managers routinely add charges that may be relatively small in the context of a Plan’s overall expenses and therefore often slip-through unchallenged, but when taken in the context of the numbers of Plans under their management, those charges can be a quite lucrative income stream.
So good on you for getting into the detail!
Specifically, the charge that you refer to for “secure records destruction” is probably, as the title suggests, a fee for the proper disposal of the Owners Corporation’s records that exceeds the period that the Regulation requires that they be kept/archived (typically 5 years). Whilst I never cease to be amazed by the amount of hardcopy records that Strata Manager’s still generate and must therefore keep in this digital age, depending upon the amount of “paper” involved the Fee’s probably reasonable.
The charge for a “window safety compliance check” is interesting, as the Section of the Act that mandates that “compliance” doesn’t require child-proof window locks to be in place until March 2018. So whilst some checking of compliance after that date may be justifiable, a Fee 3 years out is probably just for income generation purposes.
Strata Managers can generate significant “supplementary income” from additional fees of the types that you’ve mentioned, but in fairness all such items and their applicable fees are required to be included in the Schedules (I think “D”) to the Strata Management Agency Agreement that the Strata Manager has with the Owners Corporation, so obtain a copy of that from them or from your Secretary and have a close look; you may be surprised!
michele – it’s as well that you took the initiative to search for Special By-Laws (SBL) because that was going to be my next point of advice once you confirmed residency status, and if the SBL of relevance that you found has been properly Registered (on the Strata Title), then that tells me that noise transmission from all Lots except those on the ground floor must have been historically problematic, and that both you and your neighbour are legally required to abide by the provisions of that SBL.
The only way around that SBL would be to as you suggest arrange for a new one with different provisions or to amend the one that’s existing, but as both of those options would involve the drafting of a new or amended SBL, and a General Meeting of your Owners Corporation where ≥75% of those Owners in attendance (both personally and by proxy) would need to vote in favour of the proposal in accordance with the unit entitlement of their Lots (i.e. a “poll vote”) in order for it to pass, and with all of that being entirely at the expense of you and your upstairs neighbour, quite frankly I wouldn’t bother; hence my use if the term “rigmarole”.
Right now, and albeit inadvertently, your upstairs neighbour is in breach of the “model” By-Law # 14 that’s provided in Schedule 1 of the NSW Strata Schemes Management Act (1996) that I quoted in my last post, and whilst you could pursue a formal resolution to that by requesting that the Executive Committee of your Plan meets to approve issuing her with a “Notice to Comply” (with a By-Law), if you wish to remain neighbourly why not try an informal approach in the first instance?
Decent underlay seems to me the most neighbourly and effective way forward, as believe me timber flooring, and particularly that of the “floating” variety would not only be contrary to the existing SBL, but would almost certainly make matters worse – have a look HERE for some commentary on timber flooring arising from many posts on this Forum and HERE for some general advice on matters Strata.