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Our building has 4 owners, in a building of 16, who do not have parking spots as part of their title. They have asked the EC to give them the right to permanently park on common property. They do not want to pay any extra levies or fee for this right and they want the rights if granted to pass to any future purchasers of their units. Is this a reasonable request when other owners have paid a premium on the purchase of their unit with car parking, and can the EC give them this right without a Special Resolution going to an GM or AGM?
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@waverton said:
Is this a reasonable request when other owners have paid a premium on the purchase of their unit with car parking, andCan the EC give them this right without a Special Resolution going to an GM or AGM?
NO on both counts!
@waverton said:
Our building has 4 owners, in a building of 16, who do not have parking spots as part of their title. They have asked the EC to give them the right to permanently park on common property. They do not want to pay any extra levies or fee for this right and they want the rights if granted to pass to any future purchasers of their units. Is this a reasonable request … and can the EC give them this right without a Special Resolution going to an GM or AGM?So many questions and all the answers are the same – no, no and no.
Firstly, this is not a reasonable request – they want a free parking space and to not have to pay extra levies when they get it. On your bike, would be my response.
Second, the EC does not have the power to give them permanent exclusive use of Common Property – that would require a special resolution by-law passed at a general meeting with no more than 25 percent of those voting to be against it.
Finally, they have to pay something like the going rate for a car space or you are defrauding all the other owners (at least one of whom, I’m guessing, will take you to the CTTT and blow this out of the water).
Tell them to come back with a reasonable offer including a by-law drawn up to your specifications at their expense.
Or, a better way, if you have the space, is to offer them car spaces for lease from the Owners Corp with some sort of guarantee that the owner or tenant will have first refusal on the space whenever it becomes available, say on a six-monthly basis.
That way they get their car space and nobody gets ripped off.
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.
Totally agree with other posters.
Giving away common property (granting exclusive use) is giving away money that belongs to the strata.
If they want it make them pay for it. Having a parking space is worth lots of money depending on where the Strata is.
You might suggest they look at this to give them an indication of what you will be looking for
https://www.bbc.co.uk/news/world-us-canada-22910579
$560,000 was for 2 parking spots mind you.
They are essentially asking to be given a piece of land, for nothing. The answer to both your questions is a definite no.
When the strata plan was built I would assume there was a part of the development approval that established that sufficient parking was provided to meet the likely requirements of the 16 lots. I would ask how much parking exists overall and what was implied in the design of the site about its use. Is it obvious that it was assumed that the 4 units would park on common property? Is there enough common property parking that all 16 units could be granted exclusive use of one space. Then 4 would have one common property space and 12 would have one common property space plus the space that is on their title. If it would be practical, done that way all units gain the same benefit from the common property.
The situation here is reminiscent of the situation we have. In our case a minority of units had spaces specifically to construct carports adjacent to the units shown on the unit plan and part of the title etc. The majority however simply had sufficient parking in a series of open asphalt pads on common property but none was allocated to anyone in particular. Over the years these were allocated on the condition that the unit owner funds the cost of carport construction and maintenance. Recently all but a few had such a deal. Then we some of the last applied to have the same benefit from the common property that the rest had they ran into resistance and (long story short) the OC discovered that none of the allocations had been properly granted over a period of 30 years. We then had no choice but to devise a scheme to correctly allocate all the previous allocations while also allocating similarly for the last few units without parking. In the ACT that required an unopposed resolution (not Special as in NSW) and it was opposed by a few owners who had the wrong end of the stick (they lost nothing etc). It required a tribunal ruling that their objections were unreasonable to fix the issue.
So, there might be a way to help out the 4 owners that nonetheless makes equitable use of the common property and benefits all. Then make sure you do it correctly! In our case the resolution given effect by the tribunal sets out conditions on the use of the common property parking spaces for limited purposes including maintenance obligations on the benefiting owners. The exclusive use does not preclude owners from allowing others to use their space or to rent it out.
What they are proposing is that they be given exclusive use of part of the common property. That can’t be granted by the EC, it has to be voted on at a general meeting.
Waverton said:
My problem is that we have an EC of 7 people, 3 of whom are the owners who are looking to get permission to permanently park on common property and 1 who will vote with those 3. That means at EC level the remaining 3 (which includes myself) who are against the proposal would be outvoted. If the matter had to go to a GM or AGM as a special resolution, I know there are enough owners who would vote against the proposal and it would be lost.
According to your original post, these three owners aren’t just asking for permission to park – they are asking to be handed permanent exclusive use of common property which they can then add to the value of their homes when they sell.
The EC can give people permission to park on common property temporarily but they can’t give that permanently. That has to be done as an exclusive use bylaw which requires a special resolution by the Owners Corporation at a general meeting. And if it’s not in the by-laws then it can’t be included in the sale of the property.
NB: Don’t get confused by the special resolution by-law required when altering common property and an exclusive use by-law used to confer rights or privileges. These are different things even though they use the same mechanism.
To give an owner exclusive use of common property, you require a special resolution which carries with it statutory conditions (such as who maintains the property after exclusive use has been conferred).
The EC is specifically forbidden from passing special resolutions so that should really be the end of that discussion.
Here are extracts from the relevant sections of the Act:
52 How does an owners corporation make, amend or repeal by-laws conferring certain rights or privileges?
(1) An owners corporation may make, amend or repeal a by-law to which this Division applies, but only:
(b) in accordance with a special resolution.
special resolution means a resolution which is passed at a duly convened general meeting of an owners corporation and against which not more than one-quarter in value, ascertained in accordance with clause 18 (2) and (3) of Part 2 of Schedule 2, of votes is cast.
21 Executive committee’s decisions …
… the following decisions may NOT be made by the executive committee:
(a) a decision that is required by or under any Act to be made by the owners corporation by … special resolution or in general meeting,
So the land-grab by the three members of your EC is illegal if they try to do it as an EC ruling.
However, even if they were able to award themselves the car spaces for free by getting 75 percent of votes at an General Meeting, it could still be challenged in court as a fraud against the minority since they have annexed part of common property which has real value without compensating the other owners.
By the way, a seven-member EC is far too big for a block of 16 – three or five should be perfectly adequate. Reduce the numbers at your next AGM and take the opportunity to get rid of the land-grabbers.
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.
Why don’t you get ahead of the game, submit a motion to the next GM proposing that these owners are given permission to park on the common property via a ordinary resolution (this only grants temp permission) when it gets voted down (assuming you have the numbers) then any decision by the EC is overridden as the OC decision has precedence.
JimmyT said
By the way, a seven-member EC is far too big for a block of 16 – three or five should be perfectly adequate. Reduce the numbers at your next AGM and take the opportunity to get rid of the land-grabbers.
How do you restrict the no on the EC as you are allowed 9 and if up to 9 nominate they automatically get appointed to the EC without a vote.
That’s right – but the owners can determine the number of people on the EC, it doesn’t have to be 9, that’s just the maximum. So you can move a motion that the number be X, and go from there. If there is disagreement then the number with the most votes is the number.
I agree with Jimmy, 7 in a block of 16 is unwieldy. We have 5 in a block of 9 and I think that is too many.
Just in case anyone is interested, this story appeared on the Herald’s online pages yesterday and immediately went nuts. It was read by 123,500 people there and more than 6000 readers were then inspired to look here – a record for a single day for us – and more than 10,000 pages were downloaded. We also have a new record for the number of people accessing the website at any one time.
If nothing else, it proves (as if we needed proof) that parking is a ‘hot button’ issue in strata and so is the idea of fair play when it comes to using our shared resources. At the time of writing, the comments are still going strong on the SMH website HERE. Chip in and have your say there too.
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.
Well done Flat Chat/Jimmy T. Does this also apply to a Caretaker who has commandeered three areas of common property for 15+ years to use as storage areas for his short-term letting business? He has stated that neither he nor his staff have ever had access to the areas – our photos prove otherwise. Might this be defrauding the Owners Corporation? Might we not expect back rent at commercial rates for the use of this property?
@CWilson said:
Might this be defrauding the Owners Corporation? Might we not expect back rent at commercial rates for the use of this property?Definitely so.
Just make sure that his caretaking contract doesn’t allow him use of this area. If he is using common property he needs to pay a commercial rate to do so. At the very least you need to get the EC to issue him a NTC to stop using the area until he has agreed a price that he will pay for continuing use of the area and back rent for the last 10 years (not sure if back rent is feasible but he won’t know either and it might put the fear of god into him that he might have to pay $xx,xxx for past use of the area).
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