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  • #72949
    Sunny
    Flatchatter

      Strata townhouse complex of about 12 probably built in 80’s or possibly earlier

      Subsequently an owner erected a studio in his lot. Seems it made it ways to court in 1989, presumably due to some sort of breach. In 1997 Council issued approval certificate for the studio. Thereafter a by-law passed(using wording from the 1989 court) giving OC consent and for the studios continuing existence, assuming responsibility for insurance, maintenance and upkeep as if common property and that owner must reimburse costs to OC for any insurance, maintenance and upkeep(and if any changes to registered plan).

      History between then and now obscure, so no knowledge as to what consideration if any given to administer the by-law, if any

      Now it has come to attention with Committee asking for all costs related to insurance be reimbursed, including premiums, any related excess and consequential increases in premiums due to any claims. Originally seeking to be retrospective but that appears to have taken a backseat. Mechanism to pay premium suggested as based on area of building as a portion of total complex. Mechanism to pay for any increase based on claims not specified.

      To be clear, it is accepted that the Lot Owner pays for insurance premiums, as they currently do know through their entitlements. Therefore it is patently absurd that they pay further premiums based on a separate formula. It also seems unjust, and tantamount to re-prosecuting the case that where there is a claim on this studio it is subject to the charge back of excess, something that no other owner is liable for in a similar circumstance. Also to seek reimbursement for any insurance increase based on claims history from the studio seems equally inequitable, and absurd. Whose claim triggered any increase? The one studio claim for $1000 or the 10 for $100000?! An administrative nightmare.

      So I guess this all comes down to interpreting what is meant by insurance, the narrow view commonly accepted or any associated activity. Admittedly a positive answer to that could then see “excess” and “claims history increases” spun of into “maintenance”, whee again it comes down to interpretation of what is meant by “maintenance”.

      I argue “excess” and claims history” is not valid/acceptable as it imposes something different on a lot owner, while at the same time accepting their common property responsibilities. They cant have it both ways.

      Insurance premiums based on a specific and seperate formula is just outright wrong. It imposes a burden on the lot owner over and above their liability.

      Of course this all would be resolved by a reassessment of entitlements, however with an outcome which may not even move the dial. Hence why it is not being persuaded, but that is the generally accepted mechanism(a proposal for reassessment a few years back for similar but different reasons was knocked back).

      Finally it is acknowledged that other owners are picking up a portion of strata costs, including insurance premiums, for the entire complex, which includes that of the studio, based on original entitlements and is not reflective of the addition of the studio or any other by-law supported building changes to the complex subsequently ie exclusive access by some lots to common property and alterations to common property by another(where responsibility to maintain remains entirely with the owners corporation).

      Fascinating to navigate through . I guess I am seeking some indication that my views have merit and that insurance premiums the only argument with some merit. How that is worked out outside entitlements needs to be worked out

      NB The owner has been paying all direct costs

      PS They are seeking the by-law to be changed(and paid for by the lot owner) where the studio becomes the entire responsibility of the lot owner. The lot owner would have to seek out their own building insurance for the studio and the strata have to ensure it was excluded from their own insurance valuation

      Apologies for the length

      • This topic was modified 1 month, 2 weeks ago by .
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    • #72953
      Jimmy-T
      Keymaster

        Just to clarify, what kind of stuios is this – a flat or an art studio.  And on what legal basis is the OC demanding insurance premiums retrospectively? Sounds to me as if it may be personal.

        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.
        #72980
        Sunny
        Flatchatter
        Chat-starter

          Thank you for your reply.

          It has been used as a occasional flat when a relative staying over but generally just used as a separate living space, akin to a living room. It has its own bathroom space.

          The historical claim seems premised in that none of any costs(in the form currently being proposed) have been recovered since the by-law was passed, regardless of current ownership. I did read somewhere that the current owner has to accept liabilities of previous ownership and thrash it out themselves. That the strata has seemingly failed, or even previously made a considered decision not to pursue costs outside of entitlements seems to have escaped them ie demonstrate to me that what is occurring to date(all costs through entitlements) has not previously been agreed, rather than the boot being on the other foot!

          It is felt that it is personal, an aggrievance and somewhat anal given what I expect the cost to be involved. However there was/seems to be no real animosity at a personal level(the owner on her 90’s).

          A more recent by-law was passed granting exclusive rights to three owners included that they had to pay a one-time compensatory charge of $123.45 each(or similar amount) and there was no on-going liability to beneficial owners, for the ongoing exclusive right to a total of 1.11sqm) . Maybe that gives you an impression of their thinking, while also being also to/leader of declining a motion for a reassessment of entitlements requested by another owner on a separate matter. And to top it off, the argument/request/demand has been communicated via the SM in legalese, with no independent legal input.

          Both by-laws in principle have merit in being assessed through entitlements, but the chosen path seems to be direct charging(maybe because a reassessment of entitlements will result in no change? eg the lot owner being nearest to a freeway passing the property, and maybe a consequential consideration taken into account in any reassessment and potentially a reassessment coming back to bite them in the bum, albeit the correct basis for determining levies).

          I would like the excess and cost of insurance increases due to a claim on the studio be put to bed as unsound and that an additional premium charge also be legally unsound as it puts an additional burden on the lot owner, something that does not apply to other lot owners.

          I am sure that the original intent of the by-law was that the studio owner incur the same costs as any other owner in the scheme, and nothing punitive was intended(I mean it was “just” a local magistrate who agreed to the words in 1989!).

          The approach being considered is to lie low at the moment but expect this wont, and will make itself on to the record. In the meantime we will just point out that the drain from the lot to the street is blocked, either on Council property and by Council tree or on strata  property and more meritous in pursuing!

          #72984
          Jimmy-T
          Keymaster

            I am still deeply confused.  Could you provide a timeline on what happened when in terms of this studio – forget all the extraneous tuff about what other people did aor said.

            When and where was it constructed? Was permission sought, given or refused, and if given, under what terms?  What has triggered this dispute now? And what is the claim being made and by whom?

            Keep it simple and we are more likely to be able to advice. Bullet points would be best.

            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.
            #72987
            TrulEConcerned
            Flatchatter

              Hi,

              I’m with Jimmy.
              Your post is extremely confusing and unclear. As Jimmy recommends: use bullet point, focus on the key issue and re-post the problem. I don’t know where to begin with my queries, so here goes:

              1. The by law you refer to, who prepared it?

              (a) The strata committee?
              (b) The OC’s lawyer?
              (c) The studio owner’s lawyer?

              2. Was it registered?

              3. As the studio gave the relevant lot more usable space and possibly increased the risk profile for the strata scheme, was a redistribution of unit entitlement (“U/E”) attempted or even considered by the OC? If not, do you know why?
              If a redistribution was undertaken and a reasonable determination was arrived at then liability for insurance premiums would be a function of U/E. This is separate from any other term or condition of the by law.

              Note:

              A. Note, in recent weeks I have been reading up on by laws and understand they CAN be amended retrospectively by the OC. I have not checked if such amendments have a time bar on them; and
              B. You misunderstand who or what is liable as user of the studio: as I see it, in most by-laws it is not the owner of the lot at one point in time eg when the by-law was voted on or register which is the person responsible, rather it is the lot’s owner, which over time will change as people move in and out.

              • This reply was modified 1 month, 2 weeks ago by .
              #72993
              Jimmy-T
              Keymaster

                I have been reading up on by laws and understand they CAN be amended retrospectively by the OC.

                Yes, but with common property by-laws (which this appears to be) usually this is only with the written consent of all parties – including the lot owner to whom it applies – or by an order from NCAT to correct a clear anomaly.

                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.
                #72994
                Jimmy-T
                Keymaster

                  I did read somewhere that the current owner has to accept liabilities of previous ownership and thrash it out themselves.

                  This is true – that’s why these agreements are enshrined in by-laws, so that they survive transfer of ownership. However, there are avenues available to the new purchaser to pursue the vendor for non-disclosure that a liability existed that they knew about or should have known about.

                  You could even turn this back on the OC and threaten to take it to NCAT for failure to fulfil its responsibilities – i.e. pursue debts incurred by the previous owners.  That’s a long shot but it might get them to back down if there is no evidence that they previously sought the payments from the owner.

                  Either way, you should at least chat to an experienced strata lawyer to discover what your options are and find out if the cost of putting things right would be more than just paying the bill.

                  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.
                  #73021
                  Sunny
                  Flatchatter
                  Chat-starter

                    Thank you for your feedback

                    Apologies that my writing is unclear

                    The said by-law

                    “With regard to lot 10 the Owners Corporation states the Owners Corporation gave the previous owner consent to erect a studio room within lot 10 and adjoining and supported by the (Studio) common property.
                    A building certificate was issued by Hunters Hill Council dated 20 November 1997 in respect of approval of the said Studio.
                    The Owners Corporation by this By-law confirms its consent to the erection of the Studio and its continued existence.
                    The Owners Corporation assumes responsibility for the cost of insurance, maintenance and upkeep of the Studio as if it were “Common Property”.
                    The owner of lot 10 must reimburse costs incurred by the Owners Corporation in relation to the insurance, maintenance and upkeep of the Studio and also any costs in relation to registering amendments to the registered plan (tt any).
                    Wording obtained from Chamber Magistrate -Hornsby Local Court 31/10/89.”

                    Nothing of import can be added as to its history other than it is the first of the special by-laws  in the consolidation of  2021, and subsequent ones were approved as late as 2019, thus indicating it was passed prior to then. The SM is relatively new, they were unable to provide any further information or historical records and just deferred to the Committee.

                    This issue was triggered by water damage in studio following December storms and a query to strata whether a claim be made. No claim has actually been put forward. Actual damage is relatively minor ie carpet damage and some furniture but the issue has opened a can of worms.

                    Whether a redistribution of entitlements was previously discussed by strata is unknown. It is just an assumption that because it is being pursued now that no previous actions have been taken/agreed.

                    The strata claim, inter alia

                    “As per the by-law, all costs related to the insurance claim including but not limited to:

                    * excess

                    * increase in premiums in January 2025 and going forward that can be attributed to this claim

                    * a portion of the building insurance premium calculated in relation to square meterage of the studio or any other means agreeable to the parties from 2024 and going forward, will be reimbursed by the owner of lot 10 to the Owners corporation”

                    As I said in my last post, a insurance claim is not being pursued. However the concern is the position adopted by the strata and the possibility they will seek to formalise their position.  I would like to be able to rebut the unsoundness of their claims for excess and increase in premiums, as being outside the intent of the by-law, and the  (illegal?)burden of a separate calculation for insurance premiums for the studio, in addition to that already paid through levies.

                    #73041
                    kaindub
                    Flatchatter

                      I think your problem stems from a poorly worded by law. It’s seems that the bylaw was not drafted by a lawyer ( the language and form give it away).

                      I think that this forum will not be able to provide you with an answer as the bylaw contains some ambiguities in it. Ie firstly states that OC will pay insurance then owner will reimburse.

                      It’s a case that probably will end up in a court to have a judge provide their interpretation of what is meant. Now that probably will not suit anybody and the interpretation may be surprising.

                      It’s also goin to be hard to sort this out since it was so long ago. The players have probably moved on and the records lost.

                      I’d suggest that both parties start from a clean slate. Decide and agree what how the outbuilding is treated. Get a lawyer to draft a new bylaw ( and cancel the old by law).
                      As for how to treat your insurance claim today, the owner may have to pay up to get something done as the ambiguity of the bylaw means a long legal battle.

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