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  • #8540
    basjan27
    Flatchatter

      Hi, 

      Our strata has been engaged in a long and expensive campaign to recover costs and get compensation for construction on a neighboring property 11 years ago that resulted in damage to the boundary wall, subsidence causing damage to our driveway, and encroachment by a small amount across the boundary.

      That’s right.. 11 years ago.  Let’s just say, there has not been competent management of the issue.  To date, the OC has spent $125k in legal, consulting and engineering costs.  Strata fees are 50% above average and we’re regularly hit with special levies.  We are no closer to a result.  

      The campaign is going nowhere.. but there is a deep emotional investment on the part of some long term owners to punish the neighboring strata and recoup these costs (discussion of taking legal action against former SM’s, former EC member, the local council, the certifying engineer…) 

      There are three new owners, and a fourth property is going on the market, and we’re making headway toward ending this debacle.  

      However, the EC and the SM are highly secretive and will not share legal correspondence and advice that could bolster our case to end the battle. 

      Legal invoices reference key documents that we would like access to (for example, a complete file of all correspondence and advice from the past two solicitors, prepared by our new solicitor (that’s right…there have been three solicitors).  Also, reference to emails sent to the SM, preparation of briefs for consultants and letters of advice from experts. 

      Do all owners have a right to view any legal documents?  We have inspected the records at the SM, and very little documentation is in the files.  How can we get access?  Can we contact the solicitor directly and ask for copies? 

      Help and advice greatly appreciated. 

    Viewing 8 replies - 1 through 8 (of 8 total)
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    • #16271
      Whale
      Flatchatter

        If you were to regard your Owners Corporation as a private company, your Executive Committee as its Board of Directors, your Strata Manager as its paid Consultant, and yourself as a part owner of the company then that would be a good analogy.

        So of course you’re entitled to view all the Owners Corporation’s records, including those relating to legal advice / actions, where in NSW and with reference to the Strata Schemes Management Act (SCMA), those must include “copies of correspondence received and sent by the owners corporation” [S104 (c)], “records served on the owners corporation by the strata managing agent relating to the exercise of functions by the agent” [S104 (g)], and “any other record or document in the custody or under the control of the owners corporation” [S108 (g)]. So surely those provisions will well and truly cover what you’re looking to peruse. 

        I don’t know on what basis you inspected the records on the occasion to which your post refers, but if your “Board” and your “Consultant” refuse to oblige on this occasion, I suggest that you put your request in writing to the Secretary of your Executive Committee and copy your Strata Manager, specifically referencing the records you want to inspect at the offices of the latter, and advise that your request is made pursuant to S108 of the NSW Strata Schemes Management Act.

        On your side, there’s a prescribed fee of $30 for the first hour of your perusal pus $30/30 mins afterwards, both payable to your Owners Corporation, and whilst you can’t take any papers away from the Strata Manager’s offices you can take notes and make photocopies.

        On your Strata Manager’s side, there’s a Penalty of $300 if the records held by them on behalf of your Owners Corporation (of which you’re a part owner remember) are incomplete or otherwise not in accordance with the SCMA. 

        If all else fails, it sounds to me like there are sufficient like-minded Owners to secure ≥25% (by Unit Entitlement) support for a “requisition” to the Executive Committee Secretary to convene a General Meeting of the Owners Corporation to review the documents and to consider a Motion to continue legal actions. If those actions are quoted (and they have to be) to exceed the lesser of an amount equivalent to $1K/Lot or $12,500 in total, then the Meeting needs to resolve to proceed or to knock a continuance of those legal actions on the head!

        Just in case the quoted legal expenditure is less than the threshold (above), then you should include a Motion to restrict the delegations of your Committee and/or the Strata Manager such that the approval of legal actions/costs resides solely with the Owners Corporation. 

        There are more radical solutions available, but hopefully one of the above will work for you. I just hope you’re in NSW because every State and Territory is a little different legislatively, but the principles still apply.

        #17120
        Anonymous

          If you were to regard your Owners Corporation as a private company, your Executive Committee as its Board of Directors, your Strata Manager as its paid Consultant, and yourself as a part owner of the company then that would be a good analogy.

          Whale, yes, this does seem like a good analogy but is it actually so. (I am new to Flat Chat and amazed at what I’m learning here!)

          #17121
          Whale
          Flatchatter

            Yes, in my opinion it best describes the operational relationships in a Strata Plan, particularly the one between the Owners and the Owners Corporation that many people posting here regard as being exclusive from one another.

            You can indeed learn a lot from posters, but always note Jimmy T’s advice that nothing posted is a substitute for good professional advice.

            #17122
            scotlandx
            Strataguru

              Yes that is a good way of explaining it.  And the same principles of corporate governance apply, or at least they should.

              In the immediate case, the strata manager and/or the EC or even the solicitor may try and claim legal privilege on the documents.  I don’t see how they can, because basjan is an owner and effectively is a party to the dispute.  It does seem very strange if you have inspected the strata records as you say, and there is very little documentation there.  The strata manager should have it.  They may not have all that is on the solicitors’ files, but they should have things such as any legal advice given.  If the EC members have it, and I bet they do, they are holding it in their capacity as EC members and are obliged to provide you with copies.

              As an owner, you can’t ask the solicitor directly for the files, and technically some of it may fall outside the ambit of the sections that Whale quotes (at least that is what the solicitor may claim).  So that is a trickier one.  I would start with the EC and strata manager.

              As an aside, was there a resolution at a GM to spend all that money on legal and related fees?  There may well have been, but if there wasn’t, the EC members could be personally liable.

              #17123
              Jimmy-T
              Keymaster

                I agree with Whale and ScotlandX (below – read them before you read this rant). There is very little privacy within an Owners Corporation.  As an owner you are entitled to see every document produced by and for the Owners Corp or executive committee.  The “commercial in confidence” concept doesn’t really apply in strata. As an owner you can go along  to your strata manager and, for a fee, examine all EC files.

                That’s why, increasingly, some ECs keep their real discussions “off the books”, one of the reasons I’m not keen on the Company analogy (although I can’t think of a better one). 

                I’m often asked to advise friends living in strata and in one building I know – with a very young, trendy and noticeably gay demographic – the EC is dominated by retired business people (RBPs) … not that there’s anything wrong with that. People with some business experience and plenty of time on their hands are often a godsend to strata buildings.

                However, these particular RBPs have switched from running the building in a business-like manner to running it like a business and they think it’s perfectly reasonable to keep the share-holders (i.e. owners) in the dark about what’s really going on, have secret meetings to which other EC members aren’t privy and basically make up strata laws as they go – until some irritating “bush lawyer” has the temerity to put them right.

                The  bunch I’m thinking of seem to be living in a fantasy in which they are actually running a real corporations with profit and loss and share prices and homes are now referred to as “product”. They recently produced an entirely bogus “survey” in which they described the majority of owners as ‘heterosexual gays’ and ‘somewhat self-obsessed’.  Needless to say, this was not for general distribution.  The general thrust of the document was, I’m told,  to create an entirely false “need” for a 25 percent reduction in levies which, since the finances are tightly controlled, means a 25 percent reduction in services.

                Why do the RBPs want this? Because they are on fixed incomes and levies will go up just as prices do. So, to avoid this,  they argue that property values are being depressed by excessive levies that aren’t offset by the attractions of the services provided.

                Sounds feasible but how do we know? Well, we don’t.  In fact, according to  Australian Property Monitors figures, values in this particular building are currently out-performing the rest of the area by 25 percent.  Apparently one RBP went ape-shit when an EC member tried to distribute this information to other EC members – yes, other EC members – and ordered them not to do so. No surprise, then, that owners are yet to receive the good news – just as they haven’t been told that their levies are the second-lowest of comparable buildings in the area.

                This might all seem to be petty piddling politics but it’s sad to see a popular and largely well-managed building hurtle towards being undemocratic, elitist and run by fogies for fogies. 

                Pretty soon the RBPs will crank up their annual  scare campaign about how expensive it would be if they had an AGM with no quorum (which has never been a remote possibility in this particular building, what with all the self-obsessed heterosexual gays wanting to know what’s going on) and use that as an excuse to hoover up an obscene number of proxy votes, currently running, I’m told, at about 30 percent of Unit Entitlements.

                The realities of owner engagement (or lack thereof) being what they are, that means they will be able to select the EC of their choice, block any changes to by-laws they don’t like, promote their own agendas and remove restrictions on funds for their pet projects – which funnily enough mostly benefit other RBPs and don’t seem to have any effect on levies.

                I’m reliably informed that this block’s AGM  has disintegrated from a once-a-year talking shop to an all-spin, no-substance show-and-tell where the owners get shown the decisions they are about to make and told where to go if they don’t like them

                So roll on the day when proxy farming is banned, EC office-bearers in large blocks have to undertake strata law training and every discussion, behind-the-scenes or at an EC meeting, has to be properly minuted and distributed to the owners and residents.

                Oh, yes, and in the interests of democracy and fair play, autocratic attention-deprived RBPs should be locked up in common property stocks and pelted with bull manure for carrying boardroom bully-boy tactics into the EC arena.

                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.
                #17124
                Whale
                Flatchatter

                  As Secretary, Treasurer and all round dog’s body in our self-managed Plan, and a RBP on a fixed income (no money from Julia here), I think I’m offended; but wait, just maybe I’m the godsend type – whew!

                  Seriously though, I can appreciate the point that you’re ranting and hope that such activities aren’t widespread, but if Minister Roberts is even contemplating training for Executive Committees in the same model as the ‘continuing professional development’ program that his Department administers (but doesn’t audit) for Real Estate and Strata Agents, then that will be a similar disaster; guaranteed.

                  I fear that compulsory training won’t make for better Executive Committees, but rather individuals who will just think they’re better because they’ve passed a course (that nobody can fail). That’s my rant!!

                  #17128
                  Jimmy-T
                  Keymaster

                    Whale

                    You’re not just a “godsend type” – you’re a national treasure!

                    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.
                    #17134
                    Whale
                    Flatchatter

                      @JimmyT said:
                      Whale – You’re not just a “godsend type” – you’re a national treasure!

                      Thanks Mate EmbarassedEmbarassedEmbarassed

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