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Hi,
A long story – but any advice re: compulsory admin a good idea to resolve dysfunctional committee.It began with: lift replacement agreed to at AGM but 1 committee member later obstructing and mounting a mission to stall replacement at pre covid pricing.
After avg of 3 per year out of order lift calls and elderly residents complaints of doors not opening, grinding noises etc over time, the long term project to replace / upgrade 48 year lift that included an independent report suggesting that although maintained well, the lift is old and will require upgrade or replacement in the future. Followed by 4 quotes, walkarounds with companies for residents questions, and culminated in an AGM special resolution to install a new lift, the successfull company quote was accepted.
But here is the rub – the special levy was not carried, in place of this the raising of Capitol Works Fund levies was agreed to enable payment by due date of final payment. This allowed those that had not voted to agitate that no special levy was raised and if lift goes ahead there are no funds are left for works that are also required – much work needs doing with Engineers report listing priority work that has since been refused funding by special levies in further EGMs.
NCAT was involved with mediation and showed no reason why contract could not be signed, Strata Management agreed, a lawyer was asked they too agreed. No further applications to NCAT had been made at this time.
So Strata Committee signed. As if not, a contract at post covid prices would have to be negotiated.
An EGM was called to reverse motion as no special levy to pay (but funds raised in CWF will cover) however was not worded correctly and was not carried and funding for further repairs required was also not carried.
Now we are at another NCAT calling for strata manager & committee to be sacked, to not hold positions ever again (?) and these SC Members to be held personally liable for costs of lift for signing this contract, and questions about not having another meeting to place the seal on the contract that was not held.
Q: 2) Do we need another meeting to put the Seal on the contract? as this has been done on the basis of special resolution AGM & following Strata Committee agreement. Is another general meeting for the seal “double handling”? We have not called meetings for seals before on any work contracts.
But wait there is more….A cabal of older residents have signed to provide a “bloc” of 75% resolution to give these new actions weight, however with one of them stating when asked “i dont know – they come past with these notes and I just sign them..” & another “i just dont want to pay more..” makes it all very difficult with less access to covid electronic meetings for them to be fully informed.So here we are and my main question is how do we come back from this acrimony and chatter that is very close to defamation towards committee ? I am not hopeful and am thinking a compulsory admin can ensure work required is done while we all have a rest from the ongoing and relentless negativity. It is exhausting and becoming debilitating – but to resign would be handing the keys to the kingdom to 1 person – which we are not happy to do.
There are 14 units with 1 energetic dissenter, with many emails of “tone” and accusatory “language” – despite a code of conduct written to attempt to establish a baseline of communication civility.
Anyone that can independantly advise on this process would be much appreciated, admin horror stories abound – any successful admin stories ? Story has more detail – but these are the broadstrokes. Thankyou for reading this far.
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Hi Stratanaive, Well as the Old curse goes “May you live in interesting times” that’s very true of Strata. I will not go into all the legislation etc around repairs and rectifications, its been done hundreds of times on this site. So this is a basic response.
Go to NCAT with an application to appoint a Compulsory Manager. You can do it as you are an owner. Talk to the current managers they are following the committee/owners directions and they might think that the current direction is stupid; but they get no say/vote on that and could be willing to be compulsory managers.
The lift is vital if you have elderly resident, just think ambulance and Heart attack.
The owners corporation MUST do the lift and CAN’T issue a work order to proceed without funds being available (in the bank or a Loan has been setup). They can’t approve works on the proviso that levies coming in will cover it.
I have been a Compulsory Manager and it is a thankless job, as you have total say on works and Levies being raised, so Owners facing levy increases blame you. But it does mean the work gets done.
Go to NCAT with an application to appoint a Compulsory Manager.
I am not hopeful and am thinking a compulsory admin can ensure work required is done while we all have a rest from the ongoing and relentless negativity. It is exhausting and becoming debilitating – but to resign would be handing the keys to the kingdom to 1 person – which we are not happy to do.
I agree with spmanager. But you could give this one last shot. Convene a meeting or a webinar or just send out a flyer and explain to all owners how they are in breach of the Act by not repairing the lift or raising the finances to do so.
Then explain that by not complying with the law, they are likely to have a compulsory manager appointed.
Then explain what that means.
For at least one year (probably two) they will have no say in the running of their homes, levies WILL go up, but by amounts over which they will have no control. The strata manager will be legally obliged to follow the letter of the law, which means that little flaws and repairs to common property that have been ignored WILL be fixed and, again, levies WILL go up.
Why? Because the strata manager has legal obligations and duties and the owners have no say in the matter. I’d feel tempted to add “Now, do you feel lucky punk?’ but that’s probably inappropriate.
Instead, I might suggest that you hire someone like our sponsors StrataAnswers to come along and explain the facts of life to your owners. And if that doesn’t work, by all means go for a statutory appointment.
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.
I agree with the earlier two replies, in particular that
* Compulsory Strata Management (CSM) is to be actively considered. But seeking CSM would not be my first choice;
* Jimmy’s point of informing owners of exactly how life would change if a CSM appointed; and
* Jimmy’s point on getting a third party such as StrataAnswers to give owners the facts of life. In my experience, owners (many of which are unthinking drones) often defer to the existing committee on most issues, but are often nevertheless curious to hear what outside third parties have to say. Their interest heightens even more when they are not footing the bill of the third party.
Also I would urge you to rely on a flyer rather than a meeting or webinar or similar for various reasons:
1. Folk may be unable to attend a meeting or not be tech savvy enough to log into a webinar and
2. Many elderly folks when confronted with the possibility of higher levies will want to run the matter by family or friends, so the earlier you send out a DETAILED flyer covering ALL the relevant points, the better for you.
I suggest you do NOT ask the committee’s permission nor give them a heads up about your flyer as they will only discourage you (politely or impolitely) from sending one out. They may deceive you by stating that they will hold a meetings where all views will be aired, only for you to find out on the day that while all views are aired, you are limited to 2 minutes of air time! Where their views, their experts etc will have all the time they need.
When writing your flyer give your name and contact details and present the case in all its history. Don’t assume readers in the complex are au fait with the issue. Focus not only on how the committee may be or is breaching the SSM Act, but also on the pockets of owners: make clear that the committee’s solution will cost more over time than your proposal.
As someone who has recently been to NCAT (against a strata committee/OC) and won, I suggest if you make your way there you must have bucket loads of evidence. I did and that’s why I won. In your case, in addition to listing the breaches of the Act, you must back up your position with:
* A costing of recent repairs and maintenance (R&M) costs, say over the last 3 or 5 years;
* Duration the lift was out of commission for R&M;
* Likely costs over the next 10 or so years to R&M, if the current lift is not replaced (the quotes should help with this);
* Duration the lift will be out of commission in the future for anticipated and unanticipated R&M;
* Quotes (plural) for lift replacement (total) and estimated life;
* Estimate of upgrade cost per unit; and
* Estimate of increase in the value per residences in the complex that such an upgrade will result.
In fact, the more that I think of this, the more I am convinced that your flyer should be a summary of the NCAT application .
Disagreements between owners regarding which works should be undertaken in relation to common property, and how to pay for them, often happen. Acrimony in an owners corporation is not always equivalent to dysfunction requiring the appointment of a compulsory strata manager.
Stratanaive stated a special resolution to install a new lift was passed at an AGM. This indicates that the works are considered to be outside the duty to repair and maintain common property under s106, and are an improvement or enhancement to the common property covered by s108.
Given the ensuing disputation and confusion which has arisen and progressed to action in NCAT the owners corporation should obtain professional advice.There is relatively recent Supreme Court authority which explains the extent of the duty to repair and maintain common property, the powers of the owners corporation to carry out repairs and maintenance, and discretionary works under s108. The test for what an owners corporation “must”do is spelt out. Coincidentally, the case also involved the replacement of an aged lift.
There is relatively recent Supreme Court authority which explains the extent of the duty to repair and maintain common property, the powers of the owners corporation to carry out repairs and maintenance, and discretionary works under s108. The test for what an owners corporation “must”do is spelt out. Coincidentally, the case also involved the replacement of an aged lift.
Any chance of a refence or document number?
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.
Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425
Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425
Our sponsors, Sachs Gerace Lawyers have provided a comprehensive summary of that decision HERE.
The suggestion that professional advice be sought is reinforced. The case is complicated and arcane.
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.
I question if the lift needs to be replaced immediately or if at all. My strata recently received a proposal from the company that does our lift maintenance. The lift is probably out of service a couple of days a year for maintenance.
The estimated cost of replacement is $130,000 and the work is estimated to take 8 months. The cost could increase in certain circumstances so is likely to cost more and if more work is needed, the time to complete the work would also obviously increase.
As it stands the lift works and if the lift is out of service a few days a year it is less inconvenient for elderly and disabled residents than the eight months minimum it would be out of service to replace.
My real issue is if owners should accept the claims of the company that does the maintenance as it is sole source of information on the merits of replacement versus repair. The company in my view has a real conflict of interest as it may lean to the option most profitable to the company. We have at this stage no plans to accept the offer from the lift company but before we did I would want an independent assessment of the merits of repair versus replacement.
This is the dilemma owners corporations are caught in, when there is disagreement about how to proceed with remedial works. In many cases the person specifying the scope of works is also going to be the person conducting the tender process for a fee, then supervising for a percentage of the contract value. Little wonder some owners may be sceptical when this person has a pecuniary interest in the project. More so when they actually sell the equipment.
Owners can choose to “eke out” the repairs and maintenance if they have insufficient finances or other priorities. The law is fine with that, but how often are owners told this? It may not be the “best” course of action, and it is not desirable to encourage a race to the bottom, but it can help owners reach decisions if they have all the relevant facts, and maybe the sceptics are more likely to agree if they feel confident they are making their decision knowing all the options.
Anyone that can independently advise on this process would be much appreciated … any successful admin stories
I have heard of one case where the existing strata manager was appointed with the support of a majority of the committee (although the serial dissenter had enough votes from other owners to block progress on serious issues).
The strata managers engaged with the remainder of the committee to get their opinions and keep them informed, although they didn’t have to.
Section 237 of the strata management Act allows for a fairly nuanced appointment, which can takeg over of some or all of the duties of the committee or owners corporation and some or all of the responsibilities of some or all of the office-bearers.
The problem is that by the time you get to that stage, it’s usually such a mess that the easiest thing to do is give the strata manager blanket powers and let them get on with it.
But theoretically, you could apply to the tribunal on the basis that things have got so bad that you need intervention but not so bad that you need to cede total control. A sympathetic strata manager would support your application.
How bad does it have to be? Section 237 says, among other things, that “the Tribunal may make an order only if satisfied that the management of a strata scheme … is not functioning or is not functioning satisfactorily,” or “an owners corporation has failed to perform one or more of its duties.”
That’s a pretty broad brush and it doesn’t require the total collapse of the scheme to allow for an appointment.
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.
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