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….and remember that due to the high numbers of failures involving the waterproofing of wet areas such as Strata bunny‘s bathroom, Contractors undertaking such works both originally and remedially (in NSW) must hold a Waterproofing License issued by the Department of Fair Trading, and must additionally provide a Statement of Compliance indicating that the work they’ve done complies with Australian Standard AS 3740 – Waterproofing of Domestic Wet Areas.
Tracey – advise your friend to have a look at THIS Factsheet and to then contact Tenants NSW who she’ll find extremely helpful.
Strata bunny – if it’s the original shower area (floor/walls) that was in place when the Building was constructed, then it’s the Owners Corporation’s problem and conversely, if the area’s been since renovated by an Owner (not necessarily you) then the problem’s yours.
Assuming the former, then you need to advise the Owners Corporation (that’s not some separate entity and rather is made up of all Owners by the way) in writing of all the relevant facts that you’ve mentioned in your post, and further advise that if the repairs for which it’s 100% responsible under the provisions of Sect 62 of the NSW Strata Schemes Management Act (SCMA) and for which it’s already admitted (some) responsibility are not commenced in say 7 days, then as it’s been 15 weeks since you first requested it to “exercise its functions under Sect 62” (use those words) that you’ll be seeking an Order in the NSW Civil & Administrative Tribunal under Sect 138 of the SCMA so as to have it immediately exercise those functions.
You’ll find some additional information about Mediation and how it fits into dispute resolution HERE.
That’s why I answered “TRUE” to the statement by the Department of Fair Trading; the deal’s not done and your Owners Corporation could, either voluntarily or if petitioned to do so by a minimum 25% of Owners by unit entitlement, convene another General Meeting to re-consider the recent Proposal or to consider one from a different Strata Managing Agent.
Strata bunny – I recently had an almost identical problem in our self-managed Plan where as both Secretary and Treasurer, I have to deal with matters of this type.
This recent matter in our Plan was not the first of its type, where Property Managers have made the Owners Corporation (O/C) aware of problems involving areas of Common Property within a permanently tenanted Lot, and have concurrently provided a “maintenance request” for the O/C to urgently attend to it as (typically) their tenant is complaining.
Upon receipt of this most recent request, I made arrangements with the tenant (with whom I’m acquainted) to allow me access to inspect the problem, whereupon I found a common wall of the shower recess with lifting paint above the tiles, white residue from the render oozing from the grout lines, and extensive mould in both corners and along the ceiling interface.
On the basis of my visual inspection, it appeared to me that the problem started long before the Property Manager reported it, and after some inquiries of the tenant that suspicion was eventually confirmed.
The tenants advised me that they had left an advisory note inside the Unit prior to the last advised inspection by the Property Manager “around 6 months ago”, and that after they returned home and found the note where they’d left it, and no customary “calling card”, they then personally advised their Property Manager of the problem, even though they weren’t too concerned as they didn’t intend to renew their Rental Agreement upon the expiry of its fixed term.
A few more questions and I was able to determine that the problem in the shower recess was evident at least eight (8) months prior to the tenant advising of their intention to vacate, and that it was only reported to the O/C via the Property Manager’s “maintenance request” at that time.
Anyway, as I avoid dealing directly with Property Managers I advised the Lot’s Proprietor / Landlord of the problem and the extent of it, where by the way there was also an accumulation of moss on the outside (brickwork) of the shower recess wall, and of the O/C’s intention to in the circumstances attend to the necessary repairs to its Common Property, and to then invoice the Proprietor / Landlord for 100% of its resultant costs.
Well….. didn’t that set the cat amongst the pigeons!
The Proprietor/ Landlord complained bitterly and sent me a copy of the last two (2) Condition Reports that she’d received from her Property Manager, including one that was dated just 15 days prior to my inspection, both of which showed that everything was just hunky-dorey, and in fact the most recent one included a postscript from the Property Manager stating that there had been no need for any additional outgoings (maintenance or repair costs) during the past 12 months; presumably due to their great management!
Anyway, a few e-mailed photos to our Proprietor/Landlord from the O/C showing the extent of the water damage and some other areas of concern that my phone just happened to capture such as of damaged ceiling fans and floor-coverings, and the next phone call that I received was from the Property Manager who desperately tried to cover his backside with that of the O/C, or more specifically with mine!
There a bit more to all of this, but suffice to say that it came about that the Property Manager didn’t personally inspect the Unit at any time during the tenancy but had only signed-off of paperwork prepared by “others”, but in an effort to add-value to his role when little actually exists (my opinion) merely signed-off of those hunky-dorey Condition Reports, and then tried to have our O/C attend to their “maintenance request” before the Property was again made available for rental.
The Property Manager’s strategy didn’t work, and our Proprietor/Landlord has received and paid the O/C’s invoice for 100% of its direct costs to repair the Common Property, that turned out to be quite minor plumbing repairs and extensive consequential civil works ($$).
Unless you can obtain conclusive evidence to support a different scenario from your tenant, your Property Manager, or maybe from an independent trades-person who can assess and attest to the damage timeframe, then as you can guess I’m supporting the stance taken by your O/C and likely its Strata Manager who it appears, like me, has almost certainly been confronted with similar situations in the past.
So I’d be agreeing to pay that 50% so your O/C can get on with those repairs before the extent of the damage worsens, and so that you can get a new tenant and possibly a new Property Manager; it pays to inspect your investment property yourself on occasions by the way.
murphy72 – This will be necessarily lengthy, but in response to your statements and questions:
…I am unsure of the legality of a agency agreement that was signed on one day but backdated by nearly 4 months.
Ans: I answered that question in your last post, but to reiterate it depends upon the wording of the Motion that the Owners Corporation voted upon, and what was written on the copy of the proposed Agency Agreement that’s required for inclusion in the Agenda Papers.
Dept of fair trading informed me that even though a motion was carried at an AGM, an agency agreement had not been signed by the owners corp and therefore the option to go with another manager was there.
Ans: True. Once the Motion to appoint the Strata Managing Agent has been passed, they have to provide the Owners Corporation (O/C) with three signed (by them) copies of the document, which once all are signed by a representative of the O/C, the “deal’s done” and one copy is retained by the Secretary of the O/C.
Yes I am an authorised representative, I have General Power of Attorney.
Ans: I think you’re saying that you’re a legal representative of an Owner, when what I was referring to in my last post (#3) was a representative of the O/C. So I’ll reiterate, you are not required to sign the Agency Agreement unless you are the Secretary or the nominated representative of the O/C as shown on the Agency Agreement.
The owners corp was coerced into signing because the manager did not inform owners of their rights or give an opportunity to discuss and decide what powers are to be given.
Ans: if a copy of the proposed Agency Agreement was, as required, provided by the proposed Strata Manager for inclusion with the Agenda Papers, then Owners would have had an adequate period of time (whether that be 7 or 14 days) to read it, and if any didn’t understand the document on the day of the Meeting, then they shouldn’t have voted in favour of its acceptance by the O/C.
The Owners should not have had the meeting on strata premises. It was an Owners Corp meeting not a strata meeting.
Ans: it’s entirely appropriate, and indeed usual in my experience, for General Meetings of the O/C to be held at the Strata Manager’s premises.
The manager is aware of the obligations available for managers but not informing owners of their rights.
Ans: I don’t know what you mean, but it’s the responsibility of Owners to inform themselves, even by asking questions prior to a vote being taken on the day of the General Meeting.
In regards to time, you have just confirmed that the manager did 2 things wrong. 1st did not send notice asking owners what they want on the agenda and 2nd that only 7 days was given when it should have been 14.
Ans: what I said in my last post was the a Preliminary Notice, where Owners are advised about the date/time/venue for a General Meeting and are invited to submit any Motions for inclusion on its Agenda, is optional. The NSW Strata Schemes Management Act states at Schedule 2, Cl 27 that:
“Notice of the meeting must, at least 14 days before the meeting, be served on each owner and each first mortgagee and covenant chargee shown on the strata roll.”
So its at least 14 days before the Meeting, but in contemplating what can be done about a lesser period of notice, you need to consider that even if the Agenda Papers were provided demonstrably late, unless it can be proven that the outcome of a vote, in this case concerning the appointment of the Strata Manager, would have been different had the papers been provided earlier, then neither the O/C or you as the representative of an Owner could in my opinion win a legal argument to have that vote overturned by the NSW Civil & Administrative Tribunal.
Assuming that the Agency Agreement is currently “legal” or even if it will shortly be, then any Owners who at the time of the vote or since are dissatisfied with the document and/or with the Strata Manager, should read its termination provisions and then lobby for sufficient support to invoke those at another General Meeting.
murphy – re the Agency Agreement, weren’t you satisfied with the responses that you received on the last occasion that you posed the same question?
An Agency Agreement is with the Owners Corporation, so unless you’re the Secretary of the Executive Committee or an authorised representative of the Owners Corporation, then you as an individual Owner don’t sign the Agency Agreement and so you can’t be “coerced”.
Although I don’t know what question you put to the Department of Fair Trading, as stated in the previous paragraph, the advice that you’ve cited is incorrect.
Providing Owners with a Preliminary Notice of an upcoming General Meeting is optional, but if your question relates to the Agenda Papers, then Owners must receive that a minimum 14 days in advance.
michele – the first issue to resolve is a possible breach of a generic Strata By-Law that states:
“An Owner of a Lot must ensure that all floor space within the Lot is covered or otherwise treated to an extent sufficient to prevent the transmission from the floor space of noise likely to disturb the peaceful enjoyment of the Owner or occupier of another Lot.”
The second issue is that as the floor structure of one Lot is the ceiling of the one below, that area isn’t the sole property of any individual Lot Owner and is instead the Common Property of the Owners Corporation (O/C) as a collective of all Lot Owners.
So if by your use of the term “replaced” you mean taking-up the floorboards and installing a different material, then in the absence of “special” By-Law that’s been Registered on the Title of your specific Strata Plan and which sets-out how such an activity by Owners may be undertaken, then any activity that involves a physical change to the structure of the floor cannot be undertaken without a whole lot of rigmarole that culminates with General Meeting of the O/C voting upon whether or not those works may be consented, and under what conditions.
There are some navigable ways forward, but in order to narrow those down a little, can you advise if both you and your upstairs neighbour are Owners?
isy – so far as my response to kingst ‘s post (#1) is concerned, I was coming from the position that as the “mould infestation” referred to wouldn’t have appeared overnight, that on the basis of personal experiences just maybe he/she or the Property Manager was aware of the leakage and hadn’t bothered to advise the Owners Corporation (O/C) until the tenant vacated and subsequent hits to the hip pocket arose, at which time the first reaction was, as too often occurs, to immediately look to the O/C for some kind of “reimbursement”.
That’s why, and in accord with your Lawyer’s conclusion, my post (#2) included the qualifier “unless the O/C can be proven negligent” to my suggestion that kingst should ask the question of his Insurers regarding that “reimbursement” if the cause of the leakage could be considered a defined event.
Oh and by the way, I’m never offended in the slightest by contrary opinions, and never afraid to learn something new about Strata from the knowledge and experiences of others.
Which may be just as well, if my perceptions about the circumstances above are incorrect!
Dudley – to answer your questions in their same order:
- If those Owners who vote on the Motion, including by proxy, do so in favour then its carried, and the Owners Corporation would use its (collective) funds to pay for the work
- Albeit minor, the proposed works would comprise and addition (i.e. a switch and some wiring) to the Common Property, and if that strict line is taken then the applicable Motion must be put as a Special Resolution that to pass requires ≥75% to vote in favour in accordance with the unit entitlement of their respective Lots. So in your Plan’s situation, YES, 3 of the 4 Owners would need to vote in favour for the Special Resolution to pass.
If I’m correct by assuming that you don’t want the Motion to pass, remember that as the wording of the Act actually states that for a Special Resolution to pass, a vote against by “not more than one-quarter in value” is required, in your situation with four (4) Lots having equal value (i.e. units of entitlement), a vote against by you alone won’t defeat the Motion.
Pete– thanks…. and on the subject of limits to proxy-harvesting, the NSW Government recently announced the third iteration of its long-promised reforms to the 18 year old Strata Schemes Management Act, and one of those was to limit the proxies that any person can hold to number equivalent to 20% of the Plan’s total Lots, or to 5 proxies; whichever is the lesser number.
But that, and a range of other reforms that Jimmy T recently summarised HERE are still just proposals, so right now all that you and other affected Owners can do is to make yourselves aware of those few limitations that do currently exist, and to do your collective best to outsmart the coterie (that’s often not smart).
Asked and answered!
Although there are two problems with the answer, the first being that I’m a CPEng and not a CPA, and the second is that your query is about the accounts of an Owners Corporation and not those of BHP Billiton.
My approach to the former has always been to not use esoteric account names and accounting techniques that makes it difficult for Owners to ascertain what the corresponding expense was actually for and which allow a plethora of expenses to be buried within them, and to “properly account” in a way that’s transparent and which allows Owners to easily understand what’s happening with their funds.
But then that’s my approach.
kingst – whilst your Owners Corporation (O/C), that includes you by the way, is responsible for properly maintaining its Common Property (roof) so that it doesn’t leak, unless the O/C can be proven negligent in terms of it being aware of but not repairing the leaking roof, it is not obliged to reimburse you for any loss of rent that you may claim has arisen as a consequence; that’s what Contents and Landlords’ Insurance is for for defined events.
Pete – I don’t know about the ACT but perhaps your namesake “Peter C” will jump in on that one, but in NSW a General Meeting has to be convened at a physical location that allows Proprietors to personally attend if they choose to do so, and any Owner who instead chooses to grant their proxy, can at Item 2 on the prescribed Form instruct, or more correctly place a limitation upon the matters that their appointee may vote on, and how they want that vote to be cast.
Whilst any proxies that your Executive Committee can successfully “harvest” would certainly count in terms of determining a quorum for the Extraordinary General Meeting (EGM), in order for those proxies to be validly exercised and be included in the ≥75% calculation to determine the outcome of the vote on that Special Resolution (i.e. a “poll vote”), the appointee must vote in accordance with the proxy-giver’s instructions.
So in NSW, the solution is to in the first instance find out from your Secretary or Strata Manager the “place where the Meeting is to be held”, and to then lobby your fellow Owners to ensure that they either physically attend OR that they note at Item 2 on the prescribed Form a “limitation” setting out how it is that they want their vote to be cast on the Special Resolution (and indeed on any other about which they have a preference).
This might sound really budget (pardon the pun) but the supply of the FOB could be shown in the Administrative Fund Accounts, under Income as “security fob deposits” and under Expenses as “security fob refunds”; why do you ask?