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Our building was built in the early-80’s on the lower north shore of Sydney, and, although the original developer (and owner until 2012) had strata plans drawn up in 1985, they were never submitted/registered. The building was bought by a refurbishing developer in late 2012, and they registered the pre-existing strata plan with the model by-laws at that time with the addition of an exclusive use by-law for the garden area (see below).
The lots covered by the exclusive use and the ones directly above them originally had no balconies – the developer built balconies for the lower units (those with the exclusive use of the common property garden areas). Those balconies are entirely within the exclusive use area and were built before the Strata Plan was registered, so form part of the common property given exclusive use of.
The owners of the two units above (of which one is ours) would like to also build balconies, and we have received OC approval at the EGM held immediately after the First AGM last year and DA consent from our local council. OC approval came in the form of an exclusive use by-law of the balconies we’re planning to build.
One of the lower units had not settled as of the First AGM (so the developer was still the legal owner). The developer did not attend the First AGM and EGM (so we had all but that one un-settled unit represented) nor send a proxy on the vote for the extra balconies’ by-law (which passed unanimously on the votes of those present).
The new owner of that unrepresented unit is objecting to the building of the new balcony. The developer and real estate agent had not informed them of our intentions regarding the new balconies (which I think they should have).
They are interpreting the by-law shown below to convey exclusive use of not just their garden area, but of the airspace above it – this is based on the fact title in NSW is given by “the subdivision of land into lots where boundaries extend from the centre of the earth through the surface to infinity.” With no height limit listed on the strata plan for the garden area common property (as it’s just common property in the plan and has no other strata defined within its bounds), and no height restriction given in the exclusive use by-law below, it is possible this is, indeed the case.
I’ve spoken to LPI and DFT, and a few other people and it seems there is some uncertainty. LPI says technically they may in fact have exclusive use of the airspace. We’ve been told NCAT can rule to either allow or disallow the balcony above the objecting owner’s balcony even if, technically, that exclusive use of the airspace does exist.
LPI suggested a simple two word addition to the entries in the schedule would allow the new balconies to proceed, but we would need the objector’s written permission for that change and it would need to pass at a General Meeting. I don’t know if a negotiated or mediated outcome will be possible.
My question, other than wondering what people thought of that basic “set up”, is around the granting of exclusive use of the common property. It is my understanding that the common property includes not just the land, trees, etc., but also any common services within the common property boundaries (above- and below-ground). Underground that would include sewer and drain lines, and above ground that would include the drain pipes coming down the side of the building.
Under the objector’s interpretation, wouldn’t that then grant exclusive use (and responsibility for maintenance and repair) of those common services (as they form part of the common property in those boundaries) to Lots 1 & 2? Does that mean other units aren’t technically allowed to use those common services, including the sewerage line?! And that Lots 1 & 2 would have to repair them if that were necessary?
As I write this, I wonder also about the walls along the boundary of the defined exclusive use area – they also form part of the common property, does that mean they have exclusive use and responsibility for maintenance on those as well? As the walls form the boundary of the common property area they may not be included in the grant (thoughts?), except the objecting lot owner is claiming what seems to me pretty comprehensive exclusivity (without, perhaps, understanding the full implications of that).
Our strata managers have given an interpretation of the by-law that the owners are only being given exclusive use of the common property “for the purpose designated in the Schedule” – i.e. only as a garden area, which would not convey exclusive use of the airspace.
Would love to hear people’s thoughts on how far the exclusive use (and responsibility) grant may extend.
Thanks!
El Capitan
21 Exclusive Use Areas – Lot 1 and 2
The Owner(s) for the time being of Lots 1 and 2 respectively and any persons authorised by them from time to time shall be entitled to exclusive use and enjoyment of that part of the Common Property (“the Exclusive Use Area”) designated on the Plan annexed hereto and forming part of this By-Law (the Exclusive Use Area number attaching to the Lot number in the Strata Plan as set out in the Schedule below) subject to the following terms and conditions:
21.1 The exclusive use area shall be used for the purpose designated in the Schedule below.
21.2 The Owner(s) is responsible for the proper maintenance and shall keep the exclusive use area clean, tidy and properly maintained and otherwise in a state of good and serviceable repair.
21.3 The Owner(s) shall not permit the Exclusive Use Area to be used in a manner likely to cause disturbance or annoyance to the occupant of any other Lot.
21.4 An Owner(s) must not store chemicals, flammable substances, gas or alcohol, volatile compounds or substances on the Exclusive Use Area.
21.5 The Owner(s) indemnifies the Owners Corporation against demands and liabilities of any kind which may arise from respective damage to any property or death or injury to any person arising out of the exercise of the rights conferred by this By-Law.
21.6 To the extent that this By-Law makes the Owners of the Exclusive Use Area directly responsible for the cleanliness, tidiness and proper maintenance of such Exclusive Use Areas, it discharges the Owners Corporation from its obligations under Section 62 of the Strata Schemes Management Act 1996.
21.7 This By-Law may only be amended or repealed with the written consent of the Owner or Owners of the Lot or Lots concerned and in accordance with a special resolution.SCHEDULELOT NUMBERUSE AREA NUMBER / LOCATION DETAILS1Courtyard and garden area for exclusive use of Lot 1 designated “A” on the Plan annexed and marked “P”.2Courtyard and garden area for exclusive use of Lot 2 designated “B” on the Plan annexed and marked “P”.
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Noting that this is the ACT, we granted a ‘special privilege’ for exclusive use of parking spaces and carports on common property to the owners of specific units. The terms were drawn up by a strata specialist lawyer. The ‘exclusive use’ is limited to the housing of vehicles and a limited amount of other storage. The OC retains the right to exercise any of its other functions in the area, so long as it does not unreasonably interfere with the unit owners use of the space for parking. Consequently, the OC can have a solar PV system on the carport roof, since that does not interfere with the use of the space for parking.
The individual benefiting unit owner is responsible to pay any cost of the OC for construction, repair and maintenance of the carport, but not anything unrelated to parking, such as a pipe underneath the parking space or a PV system on the carport roof.
It sounds like you have the reworded by-law that would be a satisfactory solution but it is being blocked by one person. Consequently it is not being put to a general meeting to attempt to pass because failure is certain?
In the ACT, our tribunal, ACAT has in several somewhat similar circumstances told us to put the matter to a general meeting anyway so that the proper process can be seen to have occurred. It also gauges support. Then the EC can go back to the tribunal and say: ‘This proposal was supported by a large majority of owners and was consistent with our legal advice but blocked by one or a few people who have been named as respondents. They were then given an opportunity to explain their objections but the EC does not believe they are reasonable and a clear majority at the general meeting were unconvinced. We are seeking orders to give effect to the failed motion on the grounds that objection would be unreasonable.’ The tribunal has regarded this as like an ‘administrative review’. IE It does not decide the individual respondents were reasonable or not; instead it decides if, at the time of the review, whether it would be reasonable for the motion to have passed at the time of the review considering all that is known at that time.
So, I think you might be best off putting the motion to a meeting, having the most support for it you can muster, and then going to the tribunal.
@el capitan said:
Hi Peter,with the registered by-law saying “This By-Law may only be amended or repealed with the written consent of the Owner or Owners of the Lot or Lots concerned and in accordance with a special resolution.” there’s no point taking it to a General Meeting to seek that special resolution as we don’t have “the written permission of the Owner of the lot concerned” – and we have, through the original passing of the proposed balconies’ by-law the stated and voted on support of all other lots.
I think it’s likely to go to the Tribunal, I’m just trying to find out if my interpretation of what is covered by the exclusive use grant is correct based on the objector’s interpretation.
Thanks
Sean
In that case, I would think, if the NSW tribunal thinks as the ACT one does, that they would want to see written evidence that you have sought to obtain that written agreement and that a reasonable proposition was put to the relevant unit owner. IE that your application to the tribunal included a copy of the correspondence and any response obtained or a statement that you tried a second time but still obtained no response, perhaps even that the letter was sent as registered mail or hand-delivered to the persons mail box or whatever. Our experience is that the ACT tribunal wants to be utterly certain that all processes that could have taken place within the OC were exhausted and every opportunity for a reasonable response was available before they then give orders to do the reasonable thing.
PS with the caveat that I am not a lawyer, I would be sceptical about the argument that a by-law giving exclusive use of some part of the common property (for certain limited purposes, perhaps?) gives exclusive use of air space infinitely above. If permission is for exclusive use of a balcony that is part of common property, it is permission to use the common property that is described as that particular balcony, not the common property that is far above that. An example might be when a person in the flat immediately above has a separate permission to use a balcony which is a different part of the common property but directly above the balcony below. In this case the permission is to use a garden area, not somewhere far above the garden. Common sense says they have permission to use sufficient airspace above the garden to allow them to walk about and enjoy the garden in the usual way, rather than having to crawl but unless they are so tall that they would bump their heads on a balcony I don’t think they have an argument.
I think the answer may be in seeking an order under Section 158 1(b), 2 and 4 where an owner has refused a reasonable request to agree to an amendment of a special resolution by-law. This is what section 158 says:
158 Order with respect to by-laws conferring exclusive rights or privileges over common property
(1) An Adjudicator may make an order prescribing the making, amendment or repeal, in terms of the order, of a by-law if the Adjudicator finds:
(b) on application made by an owner or owners corporation, that an owner of a lot, or the lessor of a leasehold strata scheme, has unreasonably refused to consent to the terms of a proposed by-law of that kind, or to the proposed amendment or repeal of such a by-law, or
(2) In considering whether to make an order under this section, an Adjudicator must have regard to: (a) the interests of all owners in the use and enjoyment of their lots and common property, and (b) the rights and reasonable expectations of any owner deriving or anticipating a benefit under a by-law of the kind referred to in section 51.
(4) For the purposes of subsection (1), an Adjudicator may determine that an owner has unreasonably refused consent even though the owner already has the exclusive use or privileges that are the subject of the proposed by-law.
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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