#24829
Jimmy-T
Keymaster

    I’ve never come across this specific situation before but I have seen circumstances where developers have pushed through agreements that were highly advantageous to them … and then lost in court.  The chisellers who retained a one square metre space in a new building’s lobby so they could rent it for an ATM spring to mind.

    I am not a lawyer and I know even less about Victorian law than I do about NSW legislation.  But I did find this in the Victorian Owners Corporation Act.

    5. Owners corporation must act in good faith

    An owners corporation in carrying out its functions and powers—
    (a) must act honestly and in good faith; and
    (b) must exercise due care and diligence.

    I think you would have a pretty strong argument that the OC, no doubt due to ignorance and under undue influence from the developer, acted neither in good faith in regard to the peppercorn rent nor with due diligence with regard to the electricity supply. It’s also arguable whether or not they acted honestly.

    Proving the point could lead to a messy and expensive legal battle … or you could just tell my colleagues at The Age who, I’m sure, would love this story.

    The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.