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G’day Struggs – Our Legal Experts are no doubt better qualified than me to comment, but I’ve always operated under the assumption that Executive Committee Members are held to the same Common Law Standards as apply to Company Directors in terms of them performing their fiduciary duties in good faith, with due care, and a reasonable level of knowledge (given that if a Member is lacking in some knowledge, they have a responsibility to inform themselves before making a decision).
So under those Standards, I would expect that an EC Member who makes an honest mistake in the performance of their duties would have any resultant legal costs covered under their Plan’s Office Bearers Liability cover.
Again, I would not expect that any legal costs to defend a mistake by an EC Member that arose from intentional misconduct, negligence, or dishonesty would be covered, or that any awarded cost against the Owners Corporation would be covered no matter what the circumstance; honest mistake or otherwise.
I am a little confused by the wording of your post, but assuming that the trees are on your Strata Plan, it matters not whether they’re on Common Property or on any part of a Lot, all growth above the strata limit (vertical) is the responsibility of the Owners Corporation.
Individual Lot Owners do have a responsibility to keep the height of any and all trees / shrubs on their Lot below the strata limit, so provided they’ve been planted since the Registration of the Plan as opposed to being existing trees that were left in place during the Development, you may be able to obtain a contribution towards trimming costs from the Lot Owners concerned – but that would of course be voluntary.
Two (2) years is long enough, and assuming that your neighbour has not received a consent to his renovations from your Owners Corporation (O/C) and that the Model By-Laws contained within the NSW Strata Schemes Management Act (1996) [the Act] have been adopted by your O/C, you are absolutely correct about the breaches of that Act and of the By-Laws.
Whilst you can certainly raise the matter of the possibly unauthorised works and the breach of By-Laws at your Plan’s AGM, nothing can be “officially” resolved by the Meeting unless the matter is on the Agenda; and I’m guessing that it’s not.
That’s not to say that your Strata Manager and/or your Executive Committee (EC) should not heed your compliant by expeditiously discussing the matter with your neighbour and, depending upon his reaction, issuing him with a Notice to Comply (with the By-Laws) under S45 of the Act.
If your Strata Manager and/or EC don’t address the matter to your satisfaction or if your neighbour doesn’t comply with the Notice, then you may independently lodge an Application for Mediation of the matter with the NSW Office of Fair Trading, where if mediation is unsuccessful your complaint may progress to Adjudication where a decision will be taken, Orders made (e.g. to alter the times of or to cease renovations), and Penalties imposed for non-compliance – see https://www.fairtrading.nsw.gov.au/Tenants_and_home_owners/Strata_schemes/Resolving_issues_strata_schemes/Strata_and_community_mediation.html
Hopefully, your Strata Manager and/or EC will be able to resolve the matter because that’s their role, but if not, make sure that you have properly documented (at least) all the matters included in your Post before heading down the Mediation path.
Finally, you can always involve the Police by making a noise complaint, and whilst that’s a last resort in my opinion, I’m not suffering the noise disturbances.
I assume that you have a consent from your Owners Corporation (O/C) to keep the dog on your Lot; yes?
You need to obtain (from the Strata Manager) a list of the By-Laws that have been Registered for your Plan, and IF they’re the Model By-Laws contained in Schedule 2 of the NSW Strata Schemes Management Regulation (2010), there will be Items covering Noise, and the Behaviour of Occupants.
That being the case, you need to speak with your Plan’s Executive Committee (EC) about them convening a Meeting, where they can Resolve to issue the tenant with a Notice to Comply for each of the By-Laws that have been breached.
The issuing of these Notices is usually delegated to the Strata Manager (SM), so your EC can instruct him to prepare and issue those Notices and to provide copies to the Landlord /Owner; remember that the SM works for you, so he must “get involved”.
Landlords / Owners have a responsibility to ensure that tenants comply with the By-Laws, and compliance is also a Condition on Tenancy Agreements, so these, together with the issue of the Notices should see an improvement in the situation.
BUT… if the tenant again causes a disturbance in breach of those Notices, then the Landlord / Owner can commence proceedings against the tenant in the Tenancy Division of the NSW Consumer, Trader, and Tenancy Tribunal (CTTT) where the Lease may be terminated, and/or your O/C can commences proceedings in the Strata Division of the CTTT where Orders and Penalties may be imposed.
There’s a strict process to be followed with the O/C’s Application to the CTTT, and your Strata Manager should know what that is, and follow it.
There are three (3) ways by which your Plan’s water usage charges can increase:
1) a change to the charging parameters
2) an increase in usage charges
3) an increase in water consumption.
Most Water Utilities (in NSW) recently made changes to items (1) and (2) by in the first instance replacing a stepped tariff where consumers paid one price for each kilolitre (kL) used up to a threshold and a higher price for each kL used above that threshold, to a flat-rate tariff for the lot, and in the second instance by increasing the amount of that flat-rate tariff.
Your Plan’s Water Account should incorporate a graph that shows the average daily consumption for the current and past billing periods, so check for a real increase in the water usage as opposed to an increase in the invoiced charges.
You may find that your Plan’s water usage hasn’t increased, or if it has, the amount of any usage increase (kL/d) may be much less than the invoiced increase ($).
Sorry – I meant Special Resolution; slip-of-the-finger!
I guess the effectiveness of an early payment discount (EPD) depends on the “mix” and number of Proprietors, and the amount of the Levy Contributions.
For our Plan, the EPD meant that the usual early payers made sure that they were a min 7 calender days early, the usual on-time payers paid early, and most of the the habitually late payers paid a few days either side of the due date.
The biggest influence was on Rental Agents holding properly delegated responsibilities to directly receive their Clients' Levy Contribution Invoices and to pay those from rent receipts. These Agents typically paid on their Terms, like the end of the month after the invoice month, which put these payments typically 44 days in arrears.
A short e-mail to these Clients (our Proprietors) resulted in most Agents now paying in time for the EPD to kick-in; matter-of-fact, as of right now all 27 of my Proprietors and their Agents have paid the most recent Levies (due 1/4).
If SMIG's looking to encourage on-time payments, taking on-board scotlandx's comments about the permitted interest on arrears (actually 0.8%/mth), think about the O/C resolving to charge “administrative fees” for reminder letters issued at 7, 14, and 30 days after the Due Date for payment.
These Fees were an effective further incentive for our Plan as cumulatively they far exceed the permitted interest charge; just make sure that the Fees can be justified by the effort involved in producing the reminder letters.
Greg – matters involving the relationships with the E/C aside, the splitting of the Strata Scheme as you originally suggested is in fact a Strata Sub-Division, that follows precisely the same process as would apply if a Developer has just completed construction of a residential building and then wanted register the complex under Strata Title.
Whilst the expense and degree of difficulty is governed largely by the number of Lots involved and the value of those (as determined for each by a qualified Valuer), if there are any “attachments” to those Lots (e.g. parking spaces), and how the Common Property is divided, there is an easier way.
Taking on board Jimmy’s suggestion about splitting the Strata and then having some overarching entity under a Community Title or similar, your O/C could apply to the responsible State Agency (Land and Property Information in NSW) for a “Subdivision of Lots only”, where as the name of the process infers, existing Strata Lots may be grouped together and Registered separately on the original Strata Tile, and with Common Property remaining with the O/C under that original Strata Title.
You can find some information on this less complex and less expensive process here – https://rgdirections.lpi.nsw.gov.au/strata_schemes/after_scheme_commenced/subdivision_of_lots_only but you would still need some degree of competent Legal assistance to proceed.
No reasonable person could suggest that you haven’t done everything possible to appease your complaining Owner/EC Member.
Check the Consent that you originally received to install the air conditioner, and look for any conditions relating to times of operation and noise.
If your tenants are complying with those conditions and the normal requirements of the Protection of the Environment Operations Regulation (2008) where operation of air conditioners is generally permitted only between 7am-10pm Mon to Sat, and between 8am-10pm Sun and Public Holidays, then I’d do nothing other than to ignore the complaints.
However if you want to take the initiative, apply to the NSW Office of Fair Trading for Mediation of your dispute by completing and lodging this Form https://www.fairtrading.nsw.gov.au/pdfs/About_us/Forms/medform.pdf
Jimmy’s right, but on the basis of my first-hand experience, you need to make sure that the wording of your Plan’s Special By-Law is prescriptive, particularly with regard to business days vs calendar days, payments received vs payments receipted, dishonoured payments, and how the 10% (max) discount is applied (e.g. quarterly in arrears in our case).
By the way, if your objective is to ensure that Proprietors’ Levy Contributions are made (at least) on time, again on the basis of my first-hand experience, the permitted 10% (max) discount is about as effective as an incentive as the permitted 10% interest on arrears is a penalty/deterrent to late payments; not!
An excellent post; thanks Ben!
Call it paranoia, but I'll keep submitting the ATO's 2 page Strata Title Body Corporate Tax Return, where I declare the interest that our Plan receives on its deposits, and make our 30% contribution to Mr Swan's budget surplus in 2012/13.
A point of clarification, when I said that “Levy Contributions are then shown as GST Inclusive on Tax Invoices” I mean’t under the scenario described – not that I was doing that, as our Plan’s not GST Registered.
Further, when I said that Plans receiving income from sources other than from Proprietors’ (levy) contributions “should” pay company tax, that was a subtle reference to the fact that many don’t!
When our Plan parted company with its Strata Manager 6 years ago, as Secretary / Treasurer I inherited all the records, including financial statements and external audits that suggested all was well.
Then I found out that all income other than that from Proprietors’ contributions was not covered by the ATO’s ruling under the principle of mutuality, and that we should have been submitting Company Tax Returns for years. So much for audits !!
As for whether or not the ATO “cares about non-mutual income” (Ben's post), I’d suggest that it cares about simply everything, and that Strata Plans who don’t declare non-mutual income such as interest are risking fines and back-tax assessments, but….as a non-accountant / Secretary & Treasurer of our self-managed Plan I’d like to see some definitive information about the tax obligations of Strata Plans from the experts.
The ATO does not require Strata Plans to pay tax provided they're covered by the principle of mutuality, that is, the Plan's only income is derived from the Levy Contributions paid by its Proprietors.
Sadly, most Plans receive interest on their funds, the Sinking Fund in particular, and so should pay Company Tax on that and any other income.
So far as the GST is concerned, if the value of your Plan's taxable supplies exceeds the threshold and its GST Registered, shouldn't it be calculating its annual budgets with all amounts as GST inclusive only where that applies?
That is, in the case of water usage the amount shown in the Administrative Fund budget does not include GST, and in the case of contracted services such as grounds maintenance the amount shown includes GST, and when all budget items are summed, the total is GST inclusive (but only where applicable).
Levy Contributions are then shown as GST Inclusive on Tax Invoices.
I hope that's the correct approach, because that's what I'm doing; but then our Plan's not GST Registered as our taxable supplies (Levies) don't exceed the threshold simply because self-management keeps our costs down.
As a general rule, it's the Landlord's responsibility to ensure that the property is pest free at the time that the occupancy commences, and to keep it that way unless the nature of the problem is something to which the tenant has contributed.
For example, a mouse / cockroach infestation is typically contributed to by tenants' poor housekeeping, so initial attempts at rectification is their responsibility. I say “initial” as there may be external factors such as in a Strata Building.
So under this criterion in a stand-alone property, the presence of a wasp's nest would not be due to anything that your tenant may or may not have done, so rectification is your responsibility as Landlord.
Don't delay though, as now that you're aware of the problem, if anyone at the property is badly stung, that may make things difficult for you.
Sorry “Fcf” and “Strugs” – but I disagree, as most rumours have a basis in fact, and perhaps that’s the case here where possibly NSW Housing has taken a Lease over the Unit prior to sub-letting to one of its “clients”.
That’s becoming more and more prevalent as Owners find such arrangements attractive, particularly as NSW Housing (NSWH) is seen as a regular payer, who undertakes repairs promptly, including to Common Property in my personal experience, and who voluntarily makes-good any damage at the end of each occupancy.
The good news is that the preamble to the NSW Strata Schemes Management Act (SCMA) states “… this act binds the Crown”, so NSWH is bound by the provisions of the SCMA including the requirement to provide tenancy notifications to the Owners Corporation and to ensure that its “clients” comply with all By-Laws.
Again, in my personal experience at my Plan when we had some absolutely shocking “clients” of NSWH in residence, the Executive Committee resolved to issue a Notice to Comply to NSWH – and why not, they’re the tenant after all?
The result was a phone call from NSWH’s Regional Manager, who then arranged for a personal visit by his “Anti Antisocial Behaviour Officer“ (I kid you not) who took details of the various incidents involving the “clients” and arranged an off-site meeting with them.
Within two (2) weeks the “clients” had been relocated, and follow-up correspondence to the E/C from NSWH’s Regional Manager undertook to select future “clients” from a listing of existing people in Public Housing who “would benefit from and appreciate accommodation in a Strata Complex” (their words) such as ours, as opposed from those people on the Public Housing Waiting List.
So my advice would be to have your E/C keep a close eye on NSWH “clients” just as it would with other residents, and IF there’s a problem, be comforted by the fact that NSWH is extremely keen to be a good strata tenant, and even keener to ensure that its “clients” do likewise.
I can't determine from your post whether your parking area is a garage or an allocated space within the building's carpark, but it seems that whatever the case, the wet-well is in place to provide drainage collection for the entire basement area.
That being the case, the wet-well and pump is Common Property and the responsibility of the Owners Corporation.
My son had a similar experience with his allocated parking space within the basement carpark of his Unit Block, where alkaline seepage from the ceiling damaged the paintwork of his vehicle, and the Strata Manager went on about basement carparks being wet-areas with no requirement carspaces to be waterproof.
Armed with my advice, including about the absolute requirement for O/C's to properly maintain its Common Property, the O/C's Insurers paid for all repairs to his vehicle. The success of the claim was primarily because the O/C was aware of the seepage problem, and yet did nothing to rectify it.
So make sure that you advise your O/C in writing about the wet-well and the leakage from the wall areas, and that if any damage to your personal property or to yourself (slips/falls) arises as a consequence of that Common Property fault, you will hold the O/C responsible.
That should get them moving!