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AJC – on the assumption that your Plan’s in NSW, I’m afraid that if the Special By-Law that’s quoted in your post was properly considered by way of a Special Resolution at a General Meeting, that it’s Registered, and that the Owners Corporation’s (O/C) decision to deny consent to your proposed works (i.e. the floating floor) was also correctly taken and accurately minuted, then in my opinion you have no grounds to seek Orders or in fact any other redress in the NSW Civil and Administrative Tribunal (NCAT).
That’s not to suggest that the arguments and supporting information that you put to the General Meeting weren’t valid, it’s just that there are few limitations on the ability of O/Cs to make and to enforce Special / By-Laws, and none of those limitations applies to the one that’s affecting you.
As you’ve noted, some Proprietors in your Plan have in the past suffered noise-related inconvenience as a consequence of some activities involving changes to floor coverings in Lots, and the O/C’s Special By-Law didn’t discriminate between Lots; that is those on the bottom residential floor and those located elsewhere.
Noise transmission from hard flooring, and particularly from wooden / floating floors that it appears you’re proposing, is a REAL issue for O/C’s, and previous posts to this forum have revealed many so-called experts that will guarantee anything in terms of their product’s sound insulation capabilities in order to secure a job, and then leave the consequences of non-compliance and neighbours’ complaints to their former client.
Everything considered and given the positioning of your Unit, and taking into account that proper sound insulation doesn’t just apply to the floor, but also to the margins where a hard floor abuts common walls with adjoining units, IF you can obtain the services of a properly qualified and insured Acoustic Engineer who’s prepared to not only specify suitable sound insulating materials for your Unit in terms of a product’s ability to meet a suitable “weighted normalised impact sound pressure level” (Ln,w) [typically <60], and additionally to indemnify you should noise-related problems later arise, then I, for the first time with regard to such matters on this forum, would suggest that you proceed; cautiously.
Matthew – I think we can all rely on Missy’s post (#2), where as a Tax Accountant she clearly explains your original queries.
As for the subject of levies being income, as a non-accountant I’ll have a go at explaining that, as they (i.e. levies) are payments made for the procurement of services by the Owners Corporation, they represent income in the hands of the O/C, and if the annual total of levies and other income then exceeds the threshold for the Goods and Services Tax (GST), then the O/C needs to Register for the GST.
The O/C’s liability for Business Income Tax by the ATO is however determined differently, under the “principle of mutuality”, which to quote the ATO (with my emphases in brackets)…. “is based on the proposition that an organisation cannot derive income from itself, so where a number of persons (i.e. Owners) contribute to a common fund (i.e. Admin & Sinking) created and controlled by them for a common purpose (i.e. the management of the Strata Plan), any surplus arising from the use of that fund for the common purpose is not income.”
But… income by an O/C from sources other than levies, such as interest and the leasing of common property is, as Boronia mentioned, assessable as business income (30%) and a Taxation Return needs to be lodged; interestingly using THIS 2 page Form just for Strata Plans – so simple really and hardly worth the $450 that our past Strata Managers used to charge us (back in 2006) to complete and lodge a normal Business Taxation Return!
Charlie – in the first instance, your Owners Corporation (O/C) should have approved of a method to repay those monies incorrectly expended from its Sinking Fund within 3 months of the first such payment – refer Sect 71(3) of the NSW Strata Schemes Management Act.
Whilst I can’t comprehend how your O/C or its Strata Manager could allow an Owner to fall so far behind in their Levies, now that those arrears have been paid, the funds have to be allocated in accordance with the relevant components of the contributions as originally invoiced; that is as your Strata Manager has advised.
Once those allocations have been made, if there’s still a deficit in the Sinking Fund relative to the past administrative fund expenses paid from it and the arrears to that fund as now received, then Sect 71 (3) applies, and if there’s a surplus then your O/C could resolve to leave it there as a “safety net”, or to scale-back future contributions to that fund accordingly, or resolve unanimously to transfer it the administrative fund.
Because it’s a “key”, just like the one that you’re responsible for to the entry door of your Lot – that’s also Common Property.
OMG – No problem; posts often overlap with two-fingers typists!
I think there’s a way forward for you, but so as to not lead you down the garden path, without identifying your Plan can you tell us what your WH&S concerns relate to – like something that your Owners Corporation should in the normal course of events be attending to?
OMG – without in any way diminishing the need for your Owners Corporation to be aware of and to correct any risks arising from Workplace Health & Safety issues (WH&S) and from Asbestos Containing Materials (ACM) on its Common Property, IF your Plan is entirely residential then Audits of neither is legally required.
Chesa – a Special Resolution is required for your Owners Corporation (O/C) to consent to the upgrade works, where ≥75% of those Owners in attendance, both personally and by proxy, at the General Meeting need to be in favour in order for the Motion to pass.
That percentage is calculated on the basis of the sum Lot Units of Entitlement (LUOE) of those at the Meeting who vote in favour, and the sum LUOE of all those in attendance (i.e. a “poll vote”).
The relevant section of the NSW Strata Schemes Management Act is 65A, which in part states, at clause (1):
For the purpose of improving or enhancing the common property, an owners corporation or an owner of a lot may take any of the following actions, but only if a special resolution has first been passed at a general meeting of the owners corporation that specifically authorises the taking of the particular action proposed:
(a) add to the common property,
(b) alter the common property,
(c) erect a new structure on the common property.
By the way, if the proposed change of use for the building eventuates, it would be prudent to discuss that (change) with your Strata Insurer.
That’s not entirely correct, and whilst I don’t want to indulge in pedantics about the status of a “substitute” E/C Member as determined by thesculpture‘s Owners Corporation and that of an “acting” E/C Member as permitted under the NSW Strata Schemes Management Act (Sch 3, Cl 3), there is a difference.
So KWP (post #2) and thesulpture’s E/C Treasurer are both correct, in that whilst “substitutes” certainly are not Members of the E/C (only the 3 elected are), any of them (or in fact any other Owner) could with the majority prior approval of E/C be nominated as an “acting” E/C Member by any elected Member who couldn’t attend a particular Meeting.
So whilst the terminology and the procedure taken by thesculpture‘s O/C was incorrect, what it’s effectively done is to provide the details of each E/C Members “acting” counterpart ahead of time, and so long as that’s approved by the other Members attending on the day, it’s compliant.
By the way, the “substitutes” can attend E/C Meetings as non-participating observers, just as any other Owner/s could at their discretion.
Costa – under the provisions of Sects 68 and 71 of the NSW Strata Schemes Management Act (the Act) the only payments that can be made from the Funds of the Owners Corporation are those for which an estimate (of that expenditure) has been made in the respective Budgets under the “items and matters” shown there.
Strata Managers generally try to overcome Sects 68 and 71 of the Act by having broad categories such as “General Repairs” and “Building Replacements” in the Budgets, thereby hiding otherwise specific items and matters within.
Notwithstanding, and even in the absence of any limit on its committal expenditure, the E/C cannot authorise expenditure on projects such as those to which your post refers unless an estimate of the expenditure on those projects appears in the approved Sinking Fund Budget, and even if such estimates have been made, E/C’s of Plan’s >100 Lots (only) still cannot authorise expenditure on any item or matter if that would cause the corresponding estimate in the Budget to be exceeded by ≥10%, unless that limitation as prescribed in Sect 80 of the Act has been specifically removed by the O/C at the preceding AGM.
Hopefully one of the above provisions will be applicable to your Plan’s circumstances.
@Marvin said:…….. What if I was to get the OC to fund the preparation of a generic aircon by-law which would be considered at the next AGM? I would put my own individual aircon motion on the same agenda, which would be considered subject to the new SBL being passed.
That’s pretty much what’s been suggested, although taking Paul’s point on-board about the O/C perhaps wanting (as opposed to needing) to read the draft Special By-Law before voting on it. They could of course at their option leave finalisation of the final draft to the Executive Committee.
The matters to be incorporated in the Special By-Law that you’re after have been spelt out in past responses, and whilst there are quite often Plan-specific subtleties that need to be incorporated, you may find something by way of a “shell” on-line or if you have a Strata Manager, they may have something on-file that’s been used by other Clients.
Time to get moving!
My Mate Paul said ….. One thing doing it Whales way you not only need the motion to install the a/c approved by 75% but you then need the SBL to be approved by the same 75% as well. So skip the motion just submit a SBL for the a/c unit which saves having 2 votes.To be clear, in NSW (assuming that’s where Marvin’s Plan is located) any change or addition to the Common Property needs the prior consent of the O/C by way of a Special Resolution taken at a General Meeting, and ONLY if the O/C then wishes to make the Owner seeking to make those changes or additions and subsequent Owners of their Lot responsible for the ongoing maintenance, repair, and replacement of whatever’s changed or added, is a Special By-Law necessary.The O/C’s desire to shift its normal common property maintenance responsibilities to an Owner would depend upon what that Owner’s changing or adding to that property, but as I don’t envisage that Marvin’s O/C would want to accept those responsibilities for his aircon system and its points of attachment to the common property (wall), or to go through the Special Resolution / Special By-Law procedure for every similar request by other Owners, it makes sense for it to cover the costs of drafting and Registering a generic Special By-Law covering the installation of aircon systems at the Plan.Such a Special By-Law (if) prepared by Marvin’s O/C would likely cover generic conditions such as the permitted location/s for the aircon systems, the screening of the outside unit and refrigerant pipework, max. noise levels, operating times, contractor access to the common property, times of work, licensed tradespeople, and responsibilities for on-going maintenance/repairs/replacement.All that could be achieved by a single Motion worded such that the Special By-Law is conditional upon the aircon system’s installation being consented, or by two separate Motions; that latter being my preference if Marvin accepts my suggestion about the benefits of his O/C drafting and Registering a generic Special By-Law; or searching for one that’s already in place as Paul suggests.Contrary to Paul’s assertion, the Motions put by Marvin could be as simple as:“THAT it is Specially Resolved that the Owner of Lot X be permitted to install a XXX Brand XXX kW split system air conditioner, the technical specifications of which is attached, on the (aspect) wall of Lot XXX”“THAT subject to the preceding Motion being carried and to avoid future requests of that type being put to General Meetings, the Owners Corporation Specially Resolves to draft and Register a Special By-Law to cover all relevant consent conditions for both the works by the Owner of Lot XXX and those applicable to any and all future requests for the installation of air conditioning systems by Owners at the Plan, at an estimated cost of $XXX.”Doing things the right way in NSW isn’t as Paul suggests a bottomless pit (of $ or bureaucracy), but rather Special By-Laws in particular are a short-cut to ensure that from the first day they’re Registered, the matters that they address can handled smoothly, consistently, and expeditiously by the Executive Committee (i.e. no GMs).Marvin – firstly, it’s always best to manage strata “by the book”, particularly so in your case as in the absence of a prior consent to your aircon system by your Owners Corporation (O/C), it could successfully obtain Orders from the NSW Civil and Administrative Tribunal requiring you to remove the system and to reinstate the common property.
The correct procedure is for you to formally seek the consent of your O/C to the proposed aircon installation by placing a Motion to that effect on the Agenda for your next General Meeting, where ≥75% of those Owners in attendance would need to vote in favour for your Motion to pass.
Then once your Motion passes, and if your O/C wants to make you and subsequent Owners of your Lot wholly responsible for the maintenance and repair of the aircon system and that part of the common property to which it’s attached (i.e. the wall), then it should concurrently resolve to create and Register a Special By-Law in those terms, inclusive of the general conditions covering the installation of your aircon system.
As for the costs of drafting and Registering the Special By-Law, the latter cost $115 so in your case there’s a quoted fee of $885 to draft the words, which is probably reasonable if there’s a Lawyer involved.
However, unless there will never be a circumstance where other Owners will seek the O/C’s consent to install aircon systems (unlikely?), then it’s entirely reasonable for your O/C, which includes you by the way, to pay for the drafting and Registration of a generic Special By-Law covering such installations.
This would give your Executive Committee the ability to itself grant future consents, and thereby avoid a Motion at a General Meeting on every occasion that an Owner wants to install an aircon system and further Special By-Laws of the same type (and presumably further $1K payments by Owners) for each consent.
On the other hand, if you want to pay for that generic Special By-Law ……
naivestrata – in NSW, your Strata Manager is not obliged to forward anything to you in the way of your Owners Corporation’s (O/C) records, but Sect 108 of the Strata Schemes Management Act (1996) allows Owners and persons authorised by Owners to themselves inspect all such records at the Strata Manager’s place of business.
The Fee that a Strata Manager can charge on behalf of the O/C in these circumstances is prescribed in the Regulation, and is currently $30 for the first hour, and an additional $15 for each half-hour thereafter. The Strata Manager can personally charge you additionally “at cost” for photocopying and other administrative tasks associated with your inspection.
A word of advice — when you make formal application to your Strata Manager under Sect 108, also advise them what it is that you want to inspect (i.e. the minute book) and precisely what it is that your looking for. A cooperative Strata Manager (who works for you by the way) will usually assist by doing a bit of records-sorting before you arrive.
Millie – nothing that you’ve said about the responsibility for re-rendering (see post #1) is inconsistent with what DaveB advised in post #2- i.e. the walls that separate units are considered external (or perimeter) walls and are common property.
I recall your earlier posts about your proposed renovations, and whilst your Executive Committee (E/C) and/or Owners Corporation (O/C) is relying upon the model by-law 5 which states amongst other things……
1) 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.
…… as you may remember, your E/C and/or O/C has only 2 months to respond to your application to renovate your kitchen, and after the expiry of that time you would be able to seek Orders to settle the issue.
Personally were I in your situation, even though it sounds like your O/C has had past problems with renovations involving its Common Property (hence the proposed Special By-Law), provided your new kitchen is in the same position at the original, if I’d signed a contract with someone to undertake the new installation then I’d simply coordinate the timing of those works with the neighbours on the other side of the common wall, and then tell my contractor to go ahead with caution – particularly as your matter has been dragging-on forever and you, not your O/C, would still be responsible for any future repairs to whatever your contractor screws or nails to the common wall.
bubbles – the first thing that I would do, if only to satisfy your curiosity, is to contact the EPA and try to ascertain what actions if any they took subsequent to your complaint.
Then, as the offending vehicle shouldn’t be on the Common Property irrespective of its non-compliance with air pollution laws, and as whoever it is that has given a security card to that vehicle’s Owners/s is in breach of your Plan’s Special By-Law in circumstances where neither your Executive Committee (E/C) nor your Building Manager (B/M) is prepared to do anything about that, you should immediately write to your E/C Secretary (cc your Strata Manager) advising that unless you receive a written response to your past complaints within say 7 days, then as an initial step you’ll be lodging an Application for Mediation of those complaints against the Owners Corporation with the NSW Office of Fair Trading.
Your Application shouldn’t be about the exhaust smoke, but be about your Owners Corporation (incl. the E/C as its representative) not acting to rectify breaches of your Plan’s Special By-Law regarding security keys, and the Model By-Laws 1 & 2 relating to noise (the exhaust) and to vehicles parked on Common Property.
Just ensure that you have properly documented everything, including the details of your initial complaints to the E/C and to the B/M and about the visitors to your Unit.
As a matter of interest, did you follow-up with Council regarding possible breaches of the Conditions of your Plan’s Development Consent?