› Flat Chat Strata Forum › Living in strata › Original owners holding on to votes in new strata › Current Page
I’m not sure exactly what has gone on here – your explanations could do with a bit more detail of how exactly the non-original owners have been impacted – but it does look like a deliberate attempt to circumvent strata laws.
My understanding of what you have written is that the original owner has sold apartments to companies in which they are the major shareholders, to try to dilute their direct ownership of properties in the block so as to avoid their vote being reduced by two-thirds.
With that in mind, you and as many other owners as you can muster should get together and approach an experienced strata lawyer (like our sponsors Sachs Gerace) as soon as possible.
If your fellow owners are worried about the cost, I’d draw your attention to Section 26 (3) of the Act (below): “An owner may recover, as damages for breach of statutory duty, any loss that has been suffered by the owner as a result of a contravention of this section.”
But there’s a bigger issue here. It seems clear to me that the original owners have set out to circumvent the law to their own advantage. What does that tell you about the future of your building?
In your shoes, I would do everything in my power not only to undo the decisions made by this cabal, but to make sure neither they not their representatives can have anything further to do with the running of the building.
Interestingly, I would say that their only defence – that they didn’t know they were breaking the law – is blown away by the lengths they have gone to to circumvent it.
Act now – call a lawyer – don’t wait!
(1) An owners corporation for a strata scheme must not, during the initial period, do any of the following things unless the owners corporation is authorised to do so by an order of the Tribunal under this Division—
(a) alter any common property or erect any structure on the common property otherwise than in accordance with a strata development contract,
(b) incur a debt for an amount that exceeds the amount then available for repayment of the debt from its administrative fund or its capital works fund,
(c) appoint a strata managing agent or a building manager or other person to assist it in the management or control of use of the common property, or the maintenance or repair of the common property, for a period extending beyond the holding of the first annual general meeting of the owners corporation,
(d) borrow money or give securities.
(2) An owners corporation may recover from the original owner—
(a) as a debt, any amount for which the owners corporation is liable because of a contravention of subsection (1) (b), together with the expenses of the owners corporation incurred in recovering that amount, and
(b) as damages for breach of statutory duty, any loss suffered by the owners corporation as a result of any other contravention of this section.
(3) An owner may recover, as damages for breach of statutory duty, any loss that has been suffered by the owner as a result of a contravention of this section (other than subsection (1) (b)).
(4) It is a defence to an action under this section in debt or for damages if it is proved that the original owner—
(a) did not know of the contravention on which the action is based, or
(b) was not in a position to influence the conduct of the owners corporation in relation to the contravention, or
(c) used due diligence to prevent the contravention.
(5) A remedy available under this section does not affect any other remedy.