Forum: Cashed-up and confused by costs levy

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Here’s a bit of a brainteaser.  An owners corp has won its tribunal case against a couple of lot owners over unapproved renovations.

The OC’s strata manager has now asked to be paid for the work they did in preparing the case and representing the OC.  Fair enough – they did the work and got the result and they deserve to be paid for it.

However, the strata manager is insisting that their fees be covered by raising a special levy, even though there is enough money in the admin fund to cover it.

Why would they do that? Generally speaking, NCAT defaults to parties in a dispute paying their own way and normally this would come out of the admin funds.  However, if either body applies for costs then, in exceptional circumstances, the Member will consider their application.

Now, strata law insists that any costs that have been awarded against a strata scheme must be paid by raising a special levy which excludes the other side. 

This ensures that lot owners who prevail in a case against their owners corporation don’t end up contributing indirectly to the OC’s costs through funds that are in the kitty.

But the OC won this particular case, so that wouldn’t apply. Or would it? Even though the Member found in one side’s favour on the legalities of the issue, the Tribunal can award costs against the winners because of the way they conducted the case.

And since the the OC can’t expect the other side to contribute towards costs that have been awarded in their favour, they’d have to strike a special levy that excludes the other parties.

Is that what happened here? Or is it something else entirely that we haven’t thought of?  You can find all the “exceptional” reasons NCAT will award costs to one side or the other HERE.

Elsewhere on the Forum

  • At the first AGM of my building – partly conducted in a foreign language – owners were persuaded to buy a lot from the developer to be used as the developer’s preferred building manager’s office, free of charge. Is any of this OK? That’s HERE.
  • I have ticked all the boxes for a planned renovation and far exceeded the basic minimum standards required for the quality of work but it has still been refused. What do I do now?  That’s HERE.
  • My garden belongs to the lot but my deck is common property.  Who is responsible for repairing or replacing the steps in between?  That HERE.
  • Our upstairs builder neighbour is about to get the OK for a massive renovation.  What are the covid-safe protections for other residents?  That’s HERE.
  • Flaws in the standard strata management agreement – Strata Community Association (NSW strata managers) responds.  That’s HERE.
  • The builder says we need a CDC for the waterproofing work on our balcony.  What is that and how do we get one? That’s HERE.

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