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  • #8876
    Whale
    Flatchatter

      I have a situation where a deceased owner of five (5) Lots in our Plan left her estate to a relative, who on the basis of my initial contact seems like a real pain in the a***.

      She’s one of those people whose perception is that the Owners Corporation pays for everything, and she told me that she has a list of demands ready for when I send out our Preliminary Notice calling for Motions to be submitted for inclusion on the Agenda of our upcoming AGM.

      I don’t object to such requests and have had no problems in the past with doing what needs to be done and with batting away the others, but the five (5) Lots concerned are long-term permanent rentals, and quite frankly I’m not looking forward to a protracted discussion at our AGM in circumstances where at first glance, some of the maintenance for which our O/C is responsible is much more extensive than it would have been if we’d been advised of it earlier.

      I’d sooner deal with this woman’s issues in detail after the AGM, and have in fact suggested that approach, but to no avail as she wants her day in the sun!

      I have not as yet received a S118 Notification for the Lots involved, so:

      1) When I’m establishing the details of those persons who are entitled to vote on the day of our AGM, would it be in order for me to advise this person that she is unable to vote, and;

      2) As the executrix, can she submit a proxy from the “Estate of the Late *****” appointing herself?

      Thanks in advance for the feedback and advice.

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    • #18704
      Kangaroo
      Flatchatter

        Whale,

        You’re probably way more familiar with the Act than I am, but these are my thoughts from a bootstrap perspective:

        1) The dead owner can’t sign anything.

        2) Nobody is an executor or executrix until probate has been granted.

        3) The size of that estate sounds like it will need probate.

        4) If probate hasn’t been granted, nobody has the legal right to sign a proxy.

        5) If probate has been granted, there’s a part of the Act that seems very strange to me, Schedule 3 section 10 clause (7) which says:

        Exercise of voting rights where owner holds lot as trustee

        If the owner of a lot holds it as trustee, a person beneficially entitled may not vote at a general meeting.

         

        5) That seems very unfair to me, as it’s usually the beneficiaries of a deceased estate trust who take on the executor job.

        6) So that clause would seem to leave the lot disenfranchised and unrepresented until probate has been granted.

        7) And then the executor would have to appoint a proxy other than themself.

        #18707
        Whale
        Flatchatter
        Chat-starter

          Thanks Roo – I agree that the deceased owner can’t sign anything Laugh

          Seriously though, if I was sure of my ground I wouldn’t be seeking comments, but maybe I should approach this from a different angle.

          My take is that the trustee of the estate (probably a lawyer) can’t vote, my problematic future owner can’t vote if she’s still a beneficiary of the estate, and IF probate has been granted, as a new owner she can’t vote unless the Owners Corporation receives a Notice under S118 of the NSW Strata Schemes Management Act (1996) prior to the commencement of the General Meeting

          As I said that’s my “take”, but what do you all think?

           

           

           

           

          #18717

          I think you’ll find that Schedule 3 Clause 10 (7) is saying that where the owner is a trustee, only the trustee can vote and not someone who is a beneficiary under the trust. That is, the trustee still gets a vote which stands in place of any potential beneficiary.

          #18718
          Whale
          Flatchatter
          Chat-starter

            Upon reflection I agree. So if probate has been granted (and that’s likely) then the new owner can’t vote until such time as the O/C receives a S118 Notification. But who if anyone may vote if probate has not been granted?
            (sent from my mobile)

            #18719
            Jimmy-T
            Keymaster


              @Whale
              said:
              … a new owner she can’t vote unless the Owners Corporation receives a Notice under S118 of the NSW Strata Schemes Management Act (1996) prior to the commencement of the General Meeting

              As I said that’s my “take”, but what do you all think?

              I think you’re covered by section 118.  Basically, it says that in cases like this, if someone wants to vote at the general meeting, they have to establish the grounds on which they have that right in a statutory declaration before the meeting.

              And you can preempt that by asking them to provide proof that they are entitled to do so and if they don’t withing 14 days, you can reject their votes.

              And that’s your real dilemma.  Do you wait till the meeting then aske them to show proof that they are entitled to vote (and endure the shouting match that ensues when they don’t) or do you agive them 14 days notice to do so and invoke sub-section 5 when they don’t.  Here’s what the Act says

              118   Notice to be given to owners corporation of right to cast vote at meeting

              (1) Person with right to vote at meetings must notify owners corporation

              A person who has an interest in a lot that, subject to this Act, gives the person a right to cast a vote either personally or by nominee at meetings of the owners corporation must notify the owners corporation in writing of that interest.

              AND

              (3) Other matters to be specified in notice

              The notice must specify the manner in which the interest arose and be verified by statutory declaration if any of the following applies to the interest:

              (a)  the interest is that of the executor or administrator of the estate of a deceased person …

              OR

              (4) Owners corporation may require notice to be given

              The secretary of the owners corporation, if of the opinion that a person obliged to give notice under this section has not done so, may by a requisition in writing served on the person, require the person:

              (a)  to state, within 14 days, whether or not the person is a person required to give notice under this section, and
              (b)  if the person is such a person, to give that notice.

              (5) Person prevented from casting vote if certain requirements not met

              A person is not entitled to cast a vote at a meeting of the owners corporation if the person has not complied with a requisition served on the person under subsection (4)  …

              Of course, I’m not a lawyer so this might all be completely wrong.

              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.
              #18721
              Kangaroo
              Flatchatter

                I agree with JT, I think you’re protected by s.118. If you haven’t received a new s.118, the OC can only act in accordance with the old one.

                Probate will be required as there is real property involved.

                There are 3 phases of managing a deceased estate:

                1) From Death until Probate

                No-one is allowed to “deal” with the property because the Court has not decided who has that right. This is the same principle as banks freezing the accounts of the deceased during this period. I suspect “deal” includes voting or writing a proxy.

                However, you might also check whether levies have fallen into arrears (which has some nice consequences) if you are still in this phase.

                2) From Probate until Transfer

                The Executor should submit a s.118 to notify their right to vote as a Trustee. And they should pay the levies as they have a duty to maintain and protect the assets.

                3) After Transfer

                The new Owner should submit another s.118 to notify their right to vote as an Owner.

                I also agree with Mountain man’s interpretation of what Schedule 3 Clause 10 (7) ought to say. The ambiguity arises when the Trustee is the same “person” as the (intended) beneficiary, which happens often. The clause should have distinguished between the two roles of the same “person”.

                Another piece of the SSMA to be rewritten! Until then, the words are all we have (apologies to The BGs) and smart lawyers (and I am neither) could argue either way.

                #18725
                Whale
                Flatchatter
                Chat-starter

                  You know when you’re fairly sure about something, but you need some confirmation? Well I did better than that, so thanks everyone!

                  Whilst I don’t want to deny this owner an opportunity to discuss her issues, I just want to do that rationally, and I believe that right now the best way to do that is, if possible, by denying her an audience; legally.

                  Slightly off topic, but the reason I need to take this approach is because many of the repairs that this new owner wants the Owners Corporation to address within her five (5) newly acquired rental properties have arisen from long-ignored faults and unauthorised works on Common Property by numerous past tenants.

                  On the basis of what I’ve inspected so far (and there’s more to come), repairs relate to three (3) showers that have been leaking for so long that water has damaged the kick-boards of kitchen cupboards in one (1) unit and lifted paint on adjoining (common) walls in two (2) units, “peep-holes” drilled through entry doors (3) from the inside that have splintered the outside surfaces, bent window frames in another unit that been caused by long-term impacts with lengths of dowel placed in the sliding tracks to overcome broken latches, and badly damaged render on internal (common) walls of two (2) units after the removal of flat-screen TVs and the metal clips used to fasten cabling / power leads to those walls.

                  It will be an interesting discussion, because whilst the majority of the damage is to Common Property, it has been caused by the malicious acts (or naïve intent) of various tenants, and the extent and cost of the works now necessary to make repairs is much more extensive than would have been the case if Property Managers had properly inspected the properties on a regular basis, and promptly reported those very obvious faults.

                  #18728
                  scotlandx
                  Strataguru

                    You have to rely on the name of the owner registered on the strata roll.  In a case where the person registered on the strata roll is deceased, then the question is whether a person is authorised to act on behalf of the estate.  If the  name of the owner has not changed to reflect that they are deceased, you would also need to see evidence that they are, such as a certified copy of the death certificate.  For a start, the relative can’t just submit a proxy from “The Estate of…” unless she has documentary evidence of a) the death and b) that she is authorised to act on behalf of the estate.

                    There is a difference between being authorised to act on behalf of an estate/exercising the rights attaching to the property of the estate and being able to deal with the assets of an estate.  Dealing with property encompasses things such as selling it or mortgaging it.  Voting or giving a proxy is not “dealing” with property, it is exercising certain rights attaching to the property.

                    You may be authorised to act on behalf of an estate (essentially standing in the shoes of the deceased person) before probate has been granted – this may be way of court order etc. This would allow the person to do things such as exercise the right to vote.  In that scenario what you need to see is documentary evidence of that authorisation.  Note that a statutory declaration from the person would not be sufficient, you would need to see something like a court order/evidence of appointment.  

                    An analogy is where someone has a power of attorney, and in that case you would need to see the documents related to that, including evidence that the power of attorney had not been revoked. (a power of attorney lapses when the grantor dies, so it doesn’t apply here).

                    Re trusts – all that Schedule 2 para 10(7) means is that where a lot is held by a trustee on behalf of a trust, a beneficiary of the trust can’t vote.  That is quite normal, and doesn’t deprive anyone – if it were any other way you could have a very confusing situation, with a number of beneficiaries wanting to vote.  It is the trustee who is entitled to vote, because they are the one who hold the lot on trust for the beneficiaries.  They have a fiduciary obligation to act in the best interests of the trust as a whole.  Note that an executor of an estate is in a similar position, but trusts can take a number of forms.

                     

                    #18777
                    Kangaroo
                    Flatchatter

                      So the SSMA defines who can vote:

                      1) For Corporations in the positive (i.e. a nominee)

                      2) For Trusts in the negative (i.e. not beneficiaries)

                      I think they should be brought into line by changing the Corporation rules:

                      1) For Corporations in the negative (i.e. not shareholders).

                      #18779
                      scotlandx
                      Strataguru

                        No, they’re not inconsistent. 

                        Shareholders of a company can’t vote on behalf of the company in that capacity, and beneficiaries of a trust can’t vote on behalf of a trust in that capacity.  This makes sense because a company can have numerous shareholders, and a trust may have many beneficiaries.

                        In both cases a shareholder or beneficiary can be appointed/authorised to vote on behalf of the company or trust.  For a company that would be the person nominated to act on behalf of the company.  For a trust, it could be a person authorised to exercise certain powers of the trustee, who is the entity/person who can exercise the right to vote.

                        Note that for a trust you can have either a corporate trustee or a natural person who is the trustee.  In the former case, the authorised representative of the company would be able to vote on behalf of the trust.

                         

                         

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