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Hi there, your penultimate paragraph regarding a special levy and the rescinding of the contract if the levy is more than 1% of the purchase price is pertinent in my situation.
We had an EGM recently when there were two units in the block that were in the process of being sold, exchange had taken place but settlement was not complete.
As a potential purchaser I received the contracts for both of the properties, each one had in their contracts at clause 23.18 that if an EGM was convened in the intervening time between exchange and settlement that the prospective purchasers must be informed in order to attend the EGM or send a proxy.
This was particularly important for these two purchasers because the EGM was convened solely to vote on whether legal fees should be paid by the raising of an urgent special levy which would cost approximately $3,000 for each unit.
Neither of the two new purchasers or their representatives were present at the EGM and when I questioned the owners present as to whether they had been informed all I received in reply were blank expressions, and the OC’s lawyer stating that the contracts I had in my possession were not the executed contracts, although I doubt that clause 23.18 would have been removed from both contracts on settlement.
I have asked the new purchasers and they say they knew nothing of the meeting except for receiving the minutes after the fact and being receipt of a levy notice from the Strata Manager stating they had to pay the special levy within a few weeks.
It does not seem right that the outgoing owners can vote at an EGM in favour of a motion for the payment of a special levy which will not be paid for by them, especially when the new owners had nothing to do with the reason for the legal fees being payable in the first place.
Also, the holding of the AGM was delayed (by the outgoing EC members, one of whom was a seller) for at least one month past the usual annual date, which in the past has been at the end of June. (I tired to find out when the very first AGM for my strata plan was held, in order to ascertain the anniversary date, but being an older property the records were unavailable).
Having the AGM very late in July meant that the budget for the quarterly levies was not approved by the OC, and therefore no levy notices were sent for payment on 1st July. The notice for the new quarterly levies was sent after the AGM stating that the instalment for the first quarter of the year was payable on 1st October instead of 1st July.
Once again the previous owners got away with not having to pay their quarterly levies because settlement on both properties took place in early September, and both the new purchasers (who happen to be new to strata) told me that they did not have an adjustment on their final sale prices to take this into account.
What recourse do the new owners have in order to claw back some of the extra levies, they have had to pay?