#18753
Jimmy-T
Keymaster

    Waverton said:

    My problem is that we have an EC of 7 people, 3 of whom are the owners who are looking to get permission to permanently park on common property and 1 who will vote with those 3.  That means at EC level the remaining 3 (which includes myself) who are against the proposal would be outvoted.  If the matter had to go to a GM or AGM as a special resolution, I know there are enough owners who would vote against the proposal and it would be lost. 

    According to your original post, these three owners aren’t just asking for permission to park – they are asking to be handed permanent exclusive use of common property which they can then add to the value of their homes when they sell.

    The EC can give people permission to park on common property temporarily but they can’t give that permanently.  That has to be done as an exclusive use bylaw which requires a special resolution by the Owners Corporation at a general meeting. And if it’s not in the by-laws then it can’t be included in the sale of the property.  

    NB: Don’t get confused by the special resolution by-law required when altering common property and an exclusive use by-law used to confer rights or privileges.  These are different things even though they use the same mechanism.

    To give an owner exclusive use of common property, you require a special resolution which carries with it statutory conditions (such as who maintains the property after exclusive use has been conferred).

    The EC is specifically forbidden from passing special resolutions so that should really be the end of that discussion.

    Here are extracts from  the relevant sections of the Act:

    52 How does an owners corporation make, amend or repeal by-laws conferring certain rights or privileges?

    (1)  An owners corporation may make, amend or repeal a by-law to which this Division applies, but only:

    (b)  in accordance with a special resolution.

    special resolution means a resolution which is passed at a duly convened general meeting of an owners corporation and against which not more than one-quarter in value, ascertained in accordance with clause 18 (2) and (3) of Part 2 of Schedule 2, of votes is cast.

    21 Executive committee’s decisions …

     … the following decisions may NOT be made by the executive committee:

    (a)  a decision that is required by or under any Act to be made by the owners corporation by …  special resolution or in general meeting,

    So the land-grab by the three members of your EC is illegal if they try to do it as an EC ruling.

    However, even if they were able to award themselves the car spaces for free by getting 75 percent of votes at an General Meeting, it could still be challenged in court as a fraud against the minority since they have annexed part of common property which has real value without compensating the other owners. 

    By the way, a seven-member EC is far too big for a block of 16 – three or five should be perfectly adequate.  Reduce the numbers at your next AGM and take the opportunity to get rid of the land-grabbers.

    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.