Rogue developer gets a reality check


Regular readers will recall the saga of the rogue developer on the far North coast who basically tried to run his new building to suit himself, with no regard for strata law – and responded aggressively to anyone who tried to do things the right way.  You can read the background here.

After months of frustration – and complete lack of interest let alone action by the paper shufflers at Fair Trading who had promised to take an interest but did NOTHING – the Flat Chat posse swung into action.

Daniel Linders, Group Managing Director of our principal sponsor Strata Choice, took on the case pro bono, for the simple reason that there was so much wrong with this situation that could so easily be put right.

So here, from FarawayGirl, our FlatChatter on the front line, is what happened next …

Well the first AGM was held today and what an interesting meeting it was.
Firstly there was some confusion over which Act we were using – the old laws or the new ones – and then the developer insisted that the proxies he held for three apartments because “it was written into the contracts of sale” were valid. They weren’t, of course, but even if he had used them he did not have a majority vote.
Despite planning to shift ownership of his units to family members – so he could keep control of them without having his voting power diluted because he owned more than 50 per cent of the properties – he had not transferred any of the apartments so still held 60% of the Lot entitlements and his voting power was reduced accordingly.
On a number of points where the Agenda had motions the wording of which was out of date, as advised by Daniel,  we informed the Strata Manager and she agreed to alter the minutes.
 There was one point on which the developer got himself very worked up  – his proposal that we should all retrofit two water meters instead of one (because that would save him money) and so, after much discussion and some personal abuse mainly directed at me, we asked that the motion be put and he lost.
One of the owners raised the issue of a financial statement and the developer said that he ran these apartments through his business account and could not separate his other rental apartments and all his other businesses.
He said he runs it all as one unit and that the money we paid him ( quarterly contribution, annual insurance in accordance with Lot Entitlement etc was a ” contribution not a levy”).
He said that there was no money for these apartments as he has been running them as a loss.  He has not provided a Maintenance Schedule and claims that he has no Maintenance contracts .
He did not have a Strata Roll and said we did not provide the information to him when he asked for it. When three of us advised that we had placed the information he asked for in the Owners Corporation mail box he said he had never looked in that mailbox and it should have been posted to his home in Sydney.
The other three owners said that they had not been asked for information and we all said that in any case he has the information to prepare the Strata roll from the contracts of sale.
We believe that he is pretending to not know about his obligations so that he can argue that he didn’t know, when we take him to the Tribunal. However we have copies of the many emails referring to specific sections of the Act that he was obliged to follow.
Now the good news:
– We have now elected a Strata Committee consisting of five owners and the developer.
– We have appointed the Strata Manager for 12 months, as per the legislation for new strata schemes.
– We have resolved to prepare and register a new set of by laws with the basis being the most current Model Rules.
We are now feeling very positive that the Apartments will be managed appropriately and in accordance with all legal requirements.
We believe that we will need to go to the Tribunal because as of today the Owners Corporation has absolutely no money at all and will not have any until people pay their next quarterly installment of strata fees which is for the period July to September.
Thank you for all your advice and help.


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