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We are on the verge on undertaking major works worth half a million, to be funded by two installments of special levy, agreed to by the OC in an EGM. Our CW fund is sufficient for everyday work but not for this major undertaking.
Can we proceed and issue all work orders while still awaiting the deposits from the OC?
If not, which clause in the Act is relevant to this matter?
Tried to find it but I must have missed it within the Act.
Thank you.
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Replies
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There is nothing in the act in regards to your question.
It comes down to this.
By issuing a work order, the OC is entering a contract.
That means that as the work is completed, the OC is required to pay the invoice .
If at the time the invoice is issued the OC does not have sufficient money to pay, that’s a breach of contract.
It then falls back onto who knew, or should have known that the OC did not have the funds to pay. They can be held ĺiable
If the OC cannot pay the invoice, the creditor can ask for the tribunal to appoint a manager to the property, who will then take charge and raise a special levy ( no meeting required)
It’s a tricky situation, especially if there are owners who don’t have the funds or can’t raise the funds necessary.
It comes down to this. By issuing a work order, the OC is entering a contract.
I agree with all of that. In this case, if you can’t be sure you will have the funds to hand to pay by the payment date, then you should hold off until you are. The contractors will not be interested in you telling them you are chasing up a few backsliders who will, for instance, pay their levies when they’ve sold their flat.
You might even consider getting a line of credit from a strata loan provider – or even better, a strata loan – so you don’t have to worry about chasing bad debts while running up another one for the OC.
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.
- The topic ‘Can start work when we’ve agreed on a special levy but haven’t collected it?’ is closed to new replies.