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I am reluctant to jump on any contributor’s opinion but there are times when allowing people to express their thoughts means that wrong and misleading information is being sent out.
So let me make this clear – if you are talking about lot owners asking for exclusive use of common property for whatever reason, then the ONLY way to do that legally is by the creation of a special resolution by-law.
It might be easier to just pass a motion a general meeting but that approval has no standing in strata law in NSW and can only lead to problems down the line. I will express my reasons for this below (and I have included the relevant sections of the law) but after that, this matter is CLOSED. I am stating FACTS here – not the way things should be but how they are.
@kiwipaul said:
If you create a bylaw granting permission you would have to be very careful about the wording as a bylaw is permanent change and passes on to new owners of the lot when sold. A bylaw can be cancelled but only with a 75% vote of the OC (not sure if the recipient has to agree as well (as in the case of a Exclusive use bylaw)).
You’d have to be a bit dim to have a by-law that wasn’t properly worded – you get a strata lawyer to write it and the lot owner who is seeking exclusive use pays for it (and the cost of the meetiong held to approve it).
And no, the special resolution by-law can’t be rescinded without the approval of the lot owner – it’s their protection against the Owner’s Corp changing their mind and withdrawing permission for something that has cost them time and money to establish.
Also with a bylaw after a number of years maybe the owners does thing you don’t agree with and he tells you he has a bylaw authorizing this, you would then have to go to CTTT to obtain a ruling and as I keep hearing the CTTT decision are a lottery and having a bylaw would significantly increase his chances of winning (even if it didn’t specifily grant exclusive use)
The by-law will only give permission to do something specific – if the owner did something different then they would still be in breach. An exclusive use by-law is not a carte blanche. It has its own set of parameters specific to the work being done. I think you are much more likely to have problems with something that has no firm legal basis, such as a simple approval that can be withdrawn.
With a simple motion granting permission, this could be withdrawn at any time (if unhappy with whats being done) with simple majority and tell the owner to restore area to original condition. If he goes to CTTT he has no bylaw to explain his actions and any motion he produces as proof of his action is only valid so long as it’s not revoked by the EC.
The lot owner –
a) needs to compensate the Owners Corp for any use of common property
b) they need to be locked into a maintain and repair contract for any future issues that might arise, and
c) they need to to have certainty when they are selling their property that they had the right to do what they have done. A simple vote of approval will not provide this.
Also if you say major alteration have already been done on just a motion, and you have let it go what are the chances of obtaining a successful ruling if you apply different rules to different owners without good reasons.
There is no logical basis for this assertion. Owners corporations and executive committees, especially, change all the time. If you go to the CTTT and say things have been done incorrectly in the past but we are doing the right thing now, you would expect them to follow the law and if they didn’t you could appeal to your district court on exactly that basis – the law, not opinion.
This is what the law says – the Owners Corp can make or allow changes and can give owners permission to use common property But it MUST be by a special resolution …
65A Owners corporation may make or authorise changes to common property
(1) For the purpose of improving or enhancing the common property, an owners corporation or an owner of a lot may take any of the following action, but only if a special resolution has first been passed at a general meeting of the owners corporation that specifically authorises the taking of the particular action proposed:
(a) add to the common property,
(b) alter the common property,
(c) erect a new structure on the common property.
(2) A special resolution that authorises action to be taken under subsection (1) in relation to the common property by an owner of a lot may specify whether the ongoing maintenance of the common property once the action has been taken is the responsibility of the owners corporation or the owner.
(3) If a special resolution under this section does not specify who has the ongoing maintenance of the common property concerned, the owners corporation has the responsibility for the ongoing maintenance.
(4) A special resolution under this section that allows an owner of a lot to take action in relation to certain common property and provides that the ongoing maintenance of that common property after the action is taken is the responsibility of the owner has no effect unless:
(a) the owners corporation obtains the written consent of the owner to the making of a by-law to provide for the maintenance of the common property by the owner, and
(b) the owners corporation makes such a by-law.
(5) A by-law made for the purposes of this section:
(a) may require, for the maintenance of the common property, the payment of money by the owner concerned at specified times or as determined by the owners corporation, and
(b) must not be amended or repealed unless a special resolution has first been passed at a general meeting of the owners corporation and the owners corporation has obtained the written consent of the owner concerned.
(6) The provisions of sections 52 (3), 54 (2) and (3) and 55 apply to a by-law made for the purposes of this section in the same way as those provisions apply to a by-law to which Division 4 of Part 5 of Chapter 2 applies.
65B Owners corporation may grant licence to use common property
(1) An owners corporation may grant a licence to an owner of a lot to use common property in a particular manner or for particular purposes if the owners corporation has approved the granting of the licence by special resolution passed at a general meeting of the owners corporation.
(2) A licence may be granted subject to terms and conditions.
Note. Division 4 of Part 5 of Chapter 2 enables owners corporations to make by-laws granting exclusive use rights and special privileges (including licences) in relation to common property.
Please, no more debate on the right and wrong way to do this. The law could not be more clear.