A caller to my fortnightly spot on ABC 702’s Afternoons with James O’Loghlin this week didn’t get a chance to explain her issue properly – such are the vicissitudes of live radio and stacks of callers – so here it is in all its complexity.
She asks, ‘in an NCAT case where the respondent is the body corporate (owners corporation) but there have been no strata elections in the decades-long history of the scheme, who can represent the respondent?’
It seems that the family who built the apartment block and own a couple of units in it, have presented themselves as office holders to lawyers, the government, the bank and the subsequent owners of the minority unit for over 20 years.
However, she says, they can’t rationally claim legitimacy due to their reduced voting rights which would give her a majority vote under Schedule 1, Section 14(2)–(3) and sections 5(2A) and 32(2) of the SSMA Act). Neither can they rely on section 38 or any other section to claim authority, as there have never been elections.
“They also have a conflict of interest due to demonstrated wide-spread mismanagement of the scheme,” she says. “The purported office holders hold the password to the strata email and the key to the strata letterbox. There is no other known contact to provide to NCAT for the respondent. NCAT assumes that any correspondence coming from this email address is from a valid office holder.
“I have already tried unsuccessfully for a professional strata manager to represent the respondent just for the case. Acknowledging that other owners have a right to speak as interested parties, what are the options here for valid representation of the respondent which will be fair to the respondent?”
To clarify, Section 14 of the SSMA says that votes by the “original owner” usually the developer, are reduced by one-third until they have sold more than half of the lots in a scheme.
Section 5 relates to the value of votes at a meeting, section 32 relates to eligibility of people for membership of a committee and section 38 says that decisions made by a committee are still valid even if there was a flaw in the make-up of the committee when the decisions were made.
This is really complicated but to answer the original question, the respondent in this case are the people who purport to be the committee. It’s up to the Tribunal to decide whether or not they are there on false pretences, and is perfectly capable of doing so if enough hard evidence – unit entitlements, ownership papers and proof of relationships between the developer and other owners – is presented at a hearing.
That said, in my very non-legal opinion, there are at least three separate grounds for Tribunal orders:
- if the original owners’ voting power should have been reduced to less than the other owners’ but hasn’t
- if they claim they are effectively the owners corporation and the strata committee but have held no meetings
- if they have made decisions that financially benefit them and not the strata scheme, but have not declared a conflict of interest.
If any or all of the above are the case, the scheme is clearly dysfunctional and the Tribunal may well appoint a strata manager to sort it out or at the very least order that an AGM be held, that the strata committee be constituted and that an election be held on the basis of legitimate voting power.
The reluctance of a strata manager to get involved may stem from the fact that this is a low-revenue, high-stress scheme with a powerful entity used to getting their own way.
If the Tribunal rules in her favor, and she uses her vote judiciously, our frustrated radio caller could find herself the only member in a committee of one. Good luck with that!
You can put in your unconflicted 10 cents worth HERE and listen to this week’s phone-in on ABC 702 by clicking here and whizzing forward to 90 minutes in.
Elsewhere on the Forum
- Developer-appointed manager ignores committee. That’s HERE.
- UPDATE: Keysafe refused over Airbnb fears. That’s HERE.
- UPDATE: Who’s responsible for resident safety. That’s HERE.
- UPDATE: How do I manage key swap return? That’s HERE.
- UPDATE: They want to put a mobile phone tower on top of our building. That’s HERE.
- UPDATE: Chairman’s privacy hedge will block our views. That’s HERE.
- UPDATE: How much does it cost to replace lifts? That’s HERE.
So easy to ask and answer questions
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Forum: Family ignores strata law to rule block, developer-appointed manager ignores owners, and a stack of updates on your questions.
[See the full original blog post at: Forum: Family’s 20-year control of block challenged To comment on the post, click on reply here.]
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