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Iain asked…. Does anyone know what the most correct legal answer is to the question of whether a replacement of balcony railings which are common property should be paid for by lot owners individually or borne across all units by way of unit entitlements?
I agree with Jimmy’s comments about the Owners Corporation (O/C) backing away from what appears to be an ill-conceived proposal, and further advise that O/Cs cannot raise levy contributions other than to all Owners (who as Jimmy advised collectively comprise the O/C) in accordance with the units-of-entitlement (U.O.E.) allocated to their respective Lots – that is it cannot, as you suggest is being canvassed by the Executive Committee (E/C), recover the costs of replacing balconies only from the Owners whose Lots are involved.
So the legal advice obtained by the Executive Committee (E/C) is incorrect, and that obtained by you (Iain) and some other Owners is correct.
In summary, whoever it is that commissions the works pays for them, but irrespective of who that may be under the scenarios now being contemplated by the E/C, both involve alterations or additions to, or erecting a new structure on the Common Property and they’re not matters to which an E/C itself may consent.
Rather, prior to a consideration of the Special By-Law that will be necessary in order to assign responsibilities for the maintenance, repair, and replacement of those items, a “special resolution” will first need to be put before a General Meeting of the O/C, where ≥75% of all those voting there, as calculated from their individual U.O.E. (i.e. a “poll vote”), would need to do so in favour in order for either scenario to pass; Sect 65A of the NSW Strata Schemes Management Act (1996) applies.
mojo – fair enough, but if the Owner is made fully aware of the conditions that will be attached to any licence, and makes an informed decision to go ahead, then I’d expect she’d be prepared to accept the consequences of future reviews and to make damn sure that she and/or her tenants behaved themselves so as to ensure a continuance of such an arrangement. Conversely, if she refused the conditions, then I don’t consider that the Owners Corporation (O/C) could be adjudged unreasonable.
But then I’m neither a member of that O/C nor a Lawyer!
just – based upon your previous posts I’m concluding that a new building manager has been appointed (i.e. to replace a previous one), and that’s been done without an enabling resolution of the Owners Corporation at the recent Annual General Meeting (AGM).
It’s too late now, but a Motion submitted by you for the Agenda of that recent AGM would have been a better means to raise and discuss the matter than was correspondence to the Executive Committee Meeting that you say was ignored.
I’m a little confused by the Strata Manager’s reported comment that “their firm would never permit this to occur” – where if I assume “this” is a reference to the new appointment and to the resultant increase in expenditure, then you may have an ally there (?).
Anyway back to your question, as there was no resolution taken at the AGM you can’t seek Orders to invalidate it, so your only course of action in my opinion is to apply for Mediation of the dispute involving the new appointment etc by the NSW Dept. of Fair Trading and depending upon how that goes, proceed to Adjudication in the NSW Civil & Administrative Tribunal (NCAT).
A final query…. what if anything did the original Building Manager have to say about the termination or transfer of their Agreement?
just – Jimmy’s been a bit quiet lately, so in advance of any response that he may make, there’s been some recent discussions on the subject of good, strata-experienced Lawyers HERE.
Mojo – you may wish to consider that just like her Lot, the pavement / floor of the Owner’s carspace is still Common Property, and as such she cannot permanently fasten anything to it without the prior written consent of the Owners Corporation (O/C).
I don’t wish to confuse matters prior to your O/C seeking some expert legal advice, but as an alternative to a grant of exclusive use it is possible under the provisions of Sect 65B for the O/C to grant a licence to the Owner for her use of that section of its Common Property. At least a licence can be regularly reviewed, amended, and indeed cancelled by the O/C upon reasonable grounds without the requirement for that Owner to give the prior consent that’s mandated when a grant of exclusive use exists.
At least in that way the O/C can’t be judged obstructionist, and can buy some time to assess how things pan-out with the Owner’s business venture by, figuratively speaking, dipping its collective little toes into the water before jumping straight in to the exclusive use pool; just a thought!
dc – you’ve been provided with some sound advice, and you should also consider that, depending upon the positioning of the new wall, you may create another room that won’t be shown on the Strata Title Plan or on the Plan of your individual Lot, that may compromise both the Owners Corporation’s insurance coverage and any insurance that you may hold for contents, and could at least complicate matters should you ever want to sell your Lot.
But with regard to your original questions, as the proposed new internal wall will by necessity be joined to the floor and ceiling of your Lot, and as both of those areas are common property, the Owners Corporation (O/C) must at least be advised of your intentions, and as accidental damage to that common property could occur, the O/C would also want to know the details of the tradespeople who’ll be doing the work and of the currency of their liability insurance, may wish to impose limitations upon the times of work (e.g. to limit noise impacts on neighbours), upon where construction materials are stored, and about the disposal of wastes (e.g. off-site). Sect 65A of the NSW Strata Schemes Management Act (SSMA) applies if your O/C regards your proposed works as “erecting a new structure”.
Additionally, if you intend to alter any services within your Lot, such as putting wiring for new powerpoint/s or television services within the proposed wall, again the O/C must be advised. Sect 116 of the SSMA applies.
In terms of your proposal being rejected by the O/C, provided you follow the provisions of the SSMA in the terms that I’ve advised then any rejection or imposition of unreasonable conditions by the O/C can be taken by you to Mediation by the NSW Department of Fair Trading (DFT).
As you probably appreciate, doing anything at a Strata Property and doing similar things at a stand-alone property (e.g. a house) is very different in terms of the rules and considerations that apply, so for an overview of those have a read through THIS excellent document produced by the DFT.
Matt – There’s nothing applicable in the Strata Schemes Management Act as it more a public health matter that you’re trying to resolve, but you mention that each each Unit has an electrical power point (presumably in the common laundry) so that individual Owners pay for the electricity consumed when they use the clothes dryers.
That may be a means to restrict or to at least segregate the usage of the dryers, but how does that allocated power point system currently work?
enquirer – some of the possibilities are that the Executive Committee Secretary can postpone or cancel a General Meeting, notwithstanding that the Strata Manager has convened it under a delegation contained in their Agency Agreement with the Owners Corporation OR an adjournment may be called for at the Meeting itself by anyone in attendance there who’s entitled to vote.
A lot depends upon whether the mediated decision was issued as an Order (by a NCAT Adjudicator) or just as a written statement of the outcomes agreed between the parties.
A little more background information would help with more definitive responses!
Pete – I hope you wrote down the name of the Fair Trading employee that you spoke with, because you’ve stumbled upon the one who actually understands Strata
.Regarding the responsibility for payment, as it’s the current Owner’s bathroom and they and subsequent Owners of the Lot will be responsible for the on-going maintenance and repair of that entire bathroom post its renovation, I’d suggest that the current Owner obtains the quotes, has each itemised to identify as closely as is practicable the two (2) cost components of the work involved (i.e. the O/C and the Owner), and then submits those to the Owners Corporation (O/C) with a indication of their preferred quote / contractor.
In that way, unless its vehemently against the Owner’s preferred quote /contractor, the O/C can simply make a payment for its cost component of the work directly to the Owner, who will then be responsible for commissioning the work and paying the entirety of what will then be their contractor’s invoice.
As for the required Statement of Compliance under AS3740, if the bath needs to be removed in any of the circumstances such as I earlier described (and it appears that’s the case) and the Owner wants to pay for and install a new one, if any contractor then refuses to warrant the entire job, the Owner should find one who will.
One final word form me. I don’t know if you’re representing the O/C or if you’re the Owner of the bathroom, but in either case don’t get too hung-up on itemising the respective cost components down to every tap washer and bath plug, but rather stick to the pareto items lest you frighten-off the contractors.
Mojo – with regard to the O/C selling part of its Common Property to the Owner, that requires a special resolution with ≥75% voting in favour in order for the matter to pass, and so far as the price (as opposed to the value) is concerned, it’s really up to the Owners Corporation (O/C) to determine, provided the price has some basis that’s defensible.
One further string to the O/C’s bow may be that, to the best of my knowledge, the installation of a grease arrestor requires the prior consent of Sydney Water, by way of an Application for “Commercial Trade Waste Permit” by the Owner of the property. So a representative of the O/C should perhaps contact Sydney Water with the relevant details of the property (address & lot number) and ascertain who the “applicant” was, who it should have been assuming a Rep. of the O/C (such as the Strata Manager) didn’t sign an Application, the status of any Permit that’s been issued, and to who its been issued.
Finally, even if the original resolution for the Owner to alter the Common Property in the manner that you describe was properly made (i.e. by special resolution), then the O/C may at a later General Meeting vote in that same way to rescind its earlier decision. The Owner concerned could seek to challenge that decision on the basis that she’s already acted upon the original resolution, but in the circumstances that you’ve outlined with respect to this entire saga, I doubt such a challenge would succeed, particularly with the O/C obtaining good legal advice beforehand.
Peter – DaveB is correct, in that the Owners Corporation (O/C) is responsible for the removal of tiles on the common wall, waterproofing that area to current standards (to a height of 1.8m I think), re-tiling to as close as possible match the existing tiles, and only if the bath is against that wall, if it’s drainage is not leaking, and it must be removed in order for the above works to be done, then the O/C is also responsible for that removal and replacement.
If the drainage between the bath and the floor is leaking, then the Lot Owner and not the O/C is responsible for the removal and replacement of the bath if that’s required to make the repairs.
It’s worth noting that in NSW, all waterproofing in “wet areas” must be undertaken by a person who holds a specific Waterproofers’ Licence, and they must provide the Lot Owner and the O/C with a Statement of Compliance with AS3740 upon completion of the work.
nyonyakay – In addition to the valid points raised by Tess (post 2), the meters that you’re contemplating would be classified as “check meters” (i.e. downstream of the main supply meters) and so Sydney Water won’t read them, and your Owners Corporation cannot legally issue anything that purports to be an account or invoice for whatever water usage they may record.
So as well-intentioned as your motives may be, unless a Multi-Unit Development is provided with pipework to accommodate the separate metering of Lots and means to convey usage data (e.g wirelessly) to a central location at the time of its construction, then the retrofitting of individual meters to those Lots and/or the use of the water consumption data then recorded is not logistically possible.
AAY – I’m guessing that the now uncooperative neighbour was the dissenting vote (?), but provided your renovations and associated changes to the common property (sewerage) were consented to by way of a special resolution of the Owners Corporation (O/C) at a General Meeting in accordance with Sect 65A of the NSW Strata Schemes Management Act (SCMA), and that’s been minuted, then the O/C itself should be arranging access to your neighbour’s garage in order to facilitate those works.
So your O/C should, either by way of the Secretary of its Executive Committee or by an instruction to its Strata Manager, immediately write to your neighbour to arrange access to their garage within a short timeframe in order to by its agents (i.e. you / your plumber) “carry out work in accordance with Sect 65 of the SCMA”, and I’d suggest that you concurrently try to reason with them about the need for that access.
Let’s hope that a concurrent approach by the O/C and by you will see a sensible and timely outcome, but regrettably if access is still refused, as it couldn’t be claimed to be due to an emergency and as Tess observed (post 3) a Magistrate would likely refer the matter to the Dept of Fair Trading who administers the SCMA, the best course of action would be for you to then take the matter to mediation there, with the option of your O/C (not you individually) seeking Orders in the NSW Civil and Administrative Tribunal to enable access to your neighbour’s Lot under Sect 145 of the SCMA.
AAY – weren’t the conditions of your access to common services covered in the prerequisite Motion and supporting documentation that you submitted to the General Meeting of your Owners Corporation, where at least two (2) other Owners voted with you in order to grant its consent to your renovations and consequent changes to the common property?
Mojo – as I said before, the Owners in your Plan are lucky to have you!
In answer to your question about exclusive use attracting a fee, Division 4 of the NSW Strata Schemes Management Act (SCMA) prescribes how such a privilege may be obtained an Owner, and specifically Sect 53 talks to what a corresponding Special By-Law (SBL) may contain by way of conditions, and cites as an example one “requiring the payment of money by the owner or owners of the lot or lots concerned, at specified times or as determined by the owners corporation”.
Your Owner friends should really seek some relevant legal advice about the wording of a SBL that relates to any privilege of exclusive use that they, as an Owners Corporation (O/C) may consider, as such a SBL cannot be rescinded or amended without the prior written consent of the Lot Owner who’s at that time its beneficiary, and there needs to some basis to initially determine and regularly review the amount of any payment to the O/C for that privilege; such as a professional valuation and changes in property values respectively.
As for the change in use of the property involved, the Schedule 1 By-Law #19 of the SCMA states:
Change in use of lot to be notified
An occupier of a lot must notify the owners corporation if the occupier changes the existing use of the lot in a way that may affect the insurance premiums for the strata scheme (for example, if the change of use results in a hazardous activity being carried out on the lot, or results in the lot being used for commercial or industrial purposes rather than residential purposes).
So clearly, a prior notification to (and the implied prior consent of) the O/C WAS required, where it has the right to make a further condition requiring the Lot Owner (in this case) to meet the cost of any consequent increase in the O/C’s insurance premium.
There been some recent discussion HERE about strata-savy lawyers, and I again urge you to urge your Owner friends to contact one of those before matters progress too much further.