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We have a small block of units. The ‘penthouse’ unit sadly, has the only access to the roof space that contains our water heaters and some electrical wiring etc. The floors are not boarded and there is no lighting. The owner of the penthouse wishes to use a ‘corner’ of the roof space for her exclusive personal use to store items. Most owners are not keen for her to do this and have cited insurance issues, fire hazard etc as reasons for not wanting this to happen. She does not have access unless given the security master key. She has been told at an AGM that she will need clearance from our insurers, a by-law giving her exclusive use of commone property and perhaps some structural reports. What sort of numbers are required in an EGM to block her application? What other issues have we not thought of? All information is very much appreciated.
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Not knowing the precise layout of the penthouse, the only other issues that I can think of are:
1) how the Owners Corporation ensures unrestricted and perpetual access to the roof space in order to maintain or to permit others to maintain the hotwater heaters and anything else there; and
2) how the O/C could periodically check upon what / how much / what weight of items were stored in the area; and
3) who is to be responsible for maintenance / repairs of the area should the worst happen (e.g. structural problems) – remembering that if that’s to be the Lot Owner then they need to agree to that provision in writing; and
4) how well subsequent Owners of the Lot would comply with any requirements of the O/C (because the benefits of a Special By-Law pass to all future Owners); and
5) who pays for the preparation and Registering of the necessary Special By-Law (typically the benefiting Owner); and
6) what if any increase in the market value of the Lot would arise from that Owner’s use of the Common Property in the way proposed and how that could be accounted for.
With regard to that last point (6), IF needed that’s best managed by way of a once-off or annual payment to the O/C that’s provided for in the terms of the Special By-Law (SBL).
So far as consideration of the Motion at the EGM is concerned, if it’s exclusive use that the penthouse Owner is requesting then that requires a “special resolution” where a minimum 25% of those Owners in attendance at the Meeting both personally and by proxy would need to vote against the Motion in order for it to be defeated, and with that percentage being determined from the sum unit entitlement of those against and the aggregate unit entitlement of the Plan (i.e. a “poll vote”).
In considering all of this, remember that once granted a SBL of the type proposed can only be rescinded by a special resolution at a General Meeting, and only then with the prior written consent of the then current Owner of the benefiting Lot – so be cautious!
Hi All,
Great stuff. Whale, JT, can you advise in relation to point 6 as to how the one off annual payment is provided and the OC may claim these monies? Similar in my plan(sort of) but our SM and lawyer advises that this is too difficult to manage, they advise unless a date is put in someone’s diary they are unable to plan and figure a payment! They say it is not a levy so can not fit in with levy payments and there is no procedure for ‘other’. So they are advising we ignore payment and give for free because they are unable to fit their payment schedules!
Cheers, CBFCBF – whilst I understand that Strata Managers cannot be expected to customise their accounting software, and in this case the “chart of accounts”, to accommodate the particular needs of individual Owners Corporations (O/C) as their clients, the systems that I’ve seen are necessarily able to adapt (as opposed to customise) an otherwise unused income and expenditure account to suit.
For example, whilst it may be unreasonable for your Strata Manager to create an additional account called “Special By-Law Payments” just for your Plan, there would be absolutely nothing wrong or difficult about your Strata Manager using a standard income account such as “sundry income” to record such payments; after all, your O/C would know what those payments represented.
The “planning” (or scheduling) of such payments could be achieved using the same process that your Strata Manager applies to generate Levy Contributions Invoices across the different Plans that they manage, in circumstances where the quarterly dates for those would vary over the year, and the actual collection process involves nothing more than an extra line on the existing Invoice for relevant Owners’ Levy Contributions.
Where there’s a will there’s a way, but the key point is determining in some equitable and defensible way the amount of the payment made by Owner/s for the use of Common Property, where that could involve everything from using extra space (m2) derived as a percentage of the Lot as existing, and then applying that to the Lot’s Levies in order to strike a separate “sundry” amount (e.g. Levies $800/qtr, Lot size 100m2 and Common Property used 10m2 = 10% extra space at a cost of $80/qtr), to using a professionally conducted market-based valuation.
Many Thanks Whale,
I am now able to get my head around this and present due to your logical and simple explanation. I otherwise was at a loss.
Big Cheers,
CBF
Hi To All and Many Thanks Whale,
Your clear and detailed instruction in this instance regarding an unusual use of CP is now heading my plan in the right direction. We may now be able to benefit from this use of CP and perhaps generate some much needed income. Mind you, early stages yet but most are seeing the light.
Big Cheers,
CBF
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