#25077
Jimmy-T
Keymaster

    Until you have the first AGM of your strata scheme, you do not need to accept any contracts signed by the original owner (developer).

    The requirements for an AGM are very specific and require proper agendas be sent out prior to the meeting and quorums be established.  Meetings held that don’t abide by these regulations have no standing.

    As you will see from the section of the Act printed below, there are very specific requirements for the initial AGM and it doesn’t sound as if your building has met them.  Therefore, the meeting for which the “minutes” were produced was not valid and you and your neighbours need to send a letter stating that it was not a meeting of the owners corporation and you dispute the content of the minutes.

    Also, the ‘initial period’ referred to lasts until units carrying one-third of the unit entitlements have been sold.

    You guys really need to talk to Fair Trading and, at the same time, find a strata manager who will advise you on what to do, on the proviso that you will propose them as managers at the first AGM.

    Here are a couple of extracts from the Act.

    Division 1 Requirements relating to holding of first annual general meeting

    1   Definition

    For the purposes of this Division, the first annual general meeting of the owners corporation is:

    (a)  a meeting convened and held in accordance with clause 2, or

    (b)  a meeting held in accordance with an order under clause 5, or

    (c)  if no meeting is held as referred to in paragraph (a) or (b), the first meeting, however convened and whenever held, of the owners corporation having an agenda consisting of the items referred to in clause 3.

    2   When must first annual general meeting of owners corporation be held?

    (1)  The original owner or, in the case of a leasehold strata scheme for which there is no original owner, the lessor of the leasehold strata scheme must convene and hold a meeting of the owners corporation, in accordance with Divisions 1 and 2 of Part 2, within 2 months of the expiration of the initial period.
     

    Maximum penalty: 10 penalty units.

     

    (2)  An original owner or lessor who has failed to convene and hold a meeting of the owners corporation in accordance with subclause (1) remains liable to the penalty provided by that subclause even though an order has been made under clause 5 or a meeting has been convened and held in accordance with any such order or otherwise.

    (3)  Divisions 1 and 3 of Part 2 apply to and in respect of the first annual general meeting of the owners corporation and voting at that meeting.

    3   What is the agenda for first annual general meeting of owners corporation?

    The agenda for the first annual general meeting must consist of the following items:

    (a)  to decide whether insurances taken out by the owners corporation should be confirmed, varied or extended,

    (b)  to decide whether any determination of the amount of a contribution required to the administrative fund or sinking fund should be confirmed or varied,

    (b1)  in the case of an owners corporation to which section 75A applies, to discuss the preparation of the plan required by that section,

    (c)  to determine the number of members of the executive committee and to elect the executive committee,

    (d)  to decide if any matter or class of matter is to be determined by the owners corporation in general meeting,

    (e)  to decide whether the by-laws for the strata scheme should be altered or added to,

    (f)  to decide whether a strata managing agent should be appointed by the owners corporation and, if a strata managing agent is to be appointed, which functions of the owners corporation should be delegated to the strata managing agent,

    (f1)  to decide whether a caretaker should be appointed under section 40A and, if a caretaker is to be appointed, what functions the caretaker should exercise,

    (g)  to consider the accounting records and the last financial statements prepared,

    (h)  to decide whether an auditor should be appointed,

    (i)  to decide whether insurance of the kind referred to in section 88 (2) should be taken out.

    4   What documents and records must be produced at first annual general meeting?

    (1)  An original owner or lessor required to convene a meeting under this Division must not fail to deliver to the owners corporation at its first annual general meeting the following:

    (a)  all plans, specifications, certificates (other than certificates of title for lots), diagrams and other documents (including policies of insurance) obtained or received by the owner or lessor and relating to the parcel or building,

    (a1)  without limiting paragraph (a), all development consents, complying development certificates and related endorsed plans, “as built” drawings, compliance certificates (within the meaning of the Environmental Planning and Assessment Act 1979), fire safety certificates and warranties obtained or received by the owner or lessor and relating to the parcel or any building, plant or equipment on the parcel,

    (b)  the certificate of title for the common property, the strata roll and any notices or other records relating to the strata scheme, if they are in the owner’s or lessor’s possession or under the owner’s or lessor’s control,

    (c)  the accounting records and the last preceding financial statements prepared,

    (d)  any other document or item relating to the parcel or any building, plant or equipment on the parcel that is prescribed by the regulations for the purposes of this subclause.

     

    Maximum penalty: 100 penalty units.

     

    (2)  This section does not require an original owner or lessor to deliver to the owners corporation any documents that exclusively evidence rights or obligations of the original owner or lessor and that are not capable of being used for the benefit of the owners corporation or any of the other owners.

    5   What happens if first annual general meeting not held?

    (1)  The Adjudicator may, on application, appoint by order a person nominated by the applicant (and who has consented to that nomination) to convene and hold a meeting of the owners corporation if a meeting of the owners corporation has not been convened and held in accordance with clause 2.

    (2)  The meeting is to be convened and held within the time specified in the order.

    (3)  An application under this section may be made by an owners corporation, an owner or a mortgagee of a lot.

     

    113   Restrictions on powers of owners corporation during initial period

    (1)  An owners corporation 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 section 182:

    (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 sinking fund,

    (c)  appoint a strata managing agent or a caretaker 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 subsection (1).

    (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 subsection (1) (other than paragraph (b)).

    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.