Definitely seek legal advice and take this to VCAT. This will be a case that pushes the ‘benefits principle’ further than it has previously gone before. The Grundl case is here: http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2017/1550.html?context=0;query=grundl
You may be able to seek costs for fee recovery if you are successful.
Check the procedural validity of the imposition of the special levy of the $695,718. If the amount of the proposed special fees is more than double the amount of the owners corporation’s annual fees, it must be approved by a special resolution. A special resolution requires support from at least 75 per cent of all lot owners or lot entitlements.
I am not certain that your OC will be successful if this matter goes to VCAT as I am not convinced that the benefit to those who are Lot owners of Hotel apartments are substantial, nor am I convinced that the non Hotel apartments derive no benefit or only negligible benefit from the maintenance that has been described.
All owners benefit from a well maintained building that is professionally managed as this raises the value of all Lots in the building.
Is your building a stratum subdivision and if so does it have a registered purpose outlining the obligations of the various stratum- see Subdivision Act 1988 (Vic) ss 27B(2), 27C(2)
As you have pointed out there are a LOT of assumptions being made in that Report! There are a lot of statements that have been made that were not proven, but were mere ‘thoughts’. A lot of assumptions that have been made are merely speculative.
What is the occupancy rate of the your Lot and the other Lots in general? The accountant appears to be basing his figures on 100% occupancy – how accurate is that assumption? Are some Hotel lots rented out more frequently than others? Your Hotel Manager should be able to give you these figures.
How and where are the hotel linens laundered – is there a commercial laundry onsite, or are the linens sent off site? Do non Hotel Lots also use the laundry? Is there a restriction or are there any guidelines on how often Lot owners may use the laundry?
Why would the cleaning trolley create more damage than a pram or a bike? Take a photo of it and its wheels. If it has rubber wheels then I don’t see an increased problem.
How often would the common property carpets be cleaned if there were no Hotel guests? Have the carpets in the areas occupied by the Hotel been replaced at a higher frequency than other areas in the building where there are no Hotel guests? If you see damage to carpets in other ares of the building not occupied by the Hotel then take photos of it to prove that general damage occurs throughout the building.
Has painting of the common walls been undertaken at a greater frequency in the areas occupied by the Hotel guests?
Would an onsite caretaker be employed if there was no Hotel, and if so are they paid a flat fee for hours worked? If paid a flat fee why would their fees be any higher if there is a Hotel onsite?
Why would electricity charges be higher when I presume the lights are on in the common areas and the Lots whether there is a short term lease or an owner occupier?
How many resident owners own a car and use the garage compared to the number of Hotel guests that have cars? It is often the case that Hotel guests, particularly international guests, don’t use cars so why would the use of the garage door be any greater for Hotel guests?
Why would insurance be any higher on the common property for a user who is a short term tenant than a user who is an owner occupier? What reasons are given for the higher insurance premiums? If the insurance is 25% higher than usual then perhaps the OC should shop around and get a better deal?