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28/09/2021 at 12:50 pm #58611
I am a landlord of a small, very old unit in Wollongong. There are five stand alone units on ground level. They are old and horrible!
Strata fees are approximately $600 a quarter. Today I received my levies for this last quarter up to January 2022 = $2,809. When I called STRATA they said this was discussed at the AGM. I was the only person at the AGM and don’t remember anything about this being mentioned or why?
How is this possible? Is it legal? I live in a block of newish units and pay $900 a quarter!!!
HELP! In rent I get about $15K a year and that covers all expenses. Strata fees total nearly $12k a year now!
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28/09/2021 at 3:28 pm #58621
You write that the agent said the higher levies were discussed at the AGM.
Were they in fact APPROVED at the AGM?
Do you have a copy of the Minutes of the AGM?
28/09/2021 at 3:32 pm #58636Is this a one-off special levy or locked in for the forseeable future? Ask to see a copy of last year’s financial statement and this year’s budget, and you’ll be able to see where the money is going.
Interestingly, if the proposal includes an increased fee for the strata manager, they shouldn’t have beeen using proxy votes for it.
Also, did this go through on the nod? If no one else was there, who was holding the proxies?
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.
29/09/2021 at 12:07 am #58654A fourfold increase? Could this possibly be an error, due to the annual amount being picked up and used by accident?
29/09/2021 at 12:20 am #58661I have two theories for this (apart from the clerical error).
One, the property has been so neglected for so long that the finances are basically playing catch-up. It’s a scenario that’s more common than you might think, especially when investors stop taking an interest in the property.
The other theory, which is definitely in the conspiracy realm, is that someone has realised that the land is more valuable than the properties on it. So, in cahoots with an owner, they drive up the levies and scare everyone into selling out.
Then you get an offer to buy, slightly over market value, you and the other owners sell out and three years from now there a 20-unit gleaming white, stainless steel and glass, luxury apartment block there.
Now, there are mechanisms for owners collectively to benefit from the sale of their strata scheme. But this way the instigator makes all the profit.
Should I put my al-foil hat back on?
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.
29/09/2021 at 1:19 pm #58669Thank you all for your comments. I won’t go into every detail re-the 400% increase in levies. I’m the only one at these meetings and don’t understand all that is going on. Certainly everything goes through “on the nod”.
However, after investigation and reading your fantastic and helpful comments, I realise that every time something needed doing the STRATA people refused to do it as it would cost the owners too much money!!! So, for years, nothing has been done. Now we have new people in the same STRATA and they are deciding to update everything. I think I coud put up with high fees for a short term but not long term. In fact, I am seriously hoping that all five unit owners will want to sell. The place is old and a mess and, conspiracy theory or not, the best solution would be to knock it all down and re-create something better.
Thank you fir all your help and suggestions!
29/09/2021 at 1:35 pm #58672By the STRATA, do you mean the strata managers? If so, they do what the owners tell them, rather than the other way round, and you could call a general meeting and ask them to revise the projects and related budgets.
Otherwise, knockdown rebuilds can be a terrific solution for ageing strata properties and the procedure is fairly simple but with a few safeguards in there.
This would depend very much on your location but if there are other developments going on nearby, there’s a chance there may be value in the land.
Firstly, you might informally approach a developer in Wollongong and ask if they are interested. If the finances stack up (you’d want at least 30-50 percent on top of the sales value of your property), then you hold a meeting to get a simple majority of the other owners’ permission to investigate the options in detail. This is when you would canvass any interested developers to see who offers the best deal.
Then you report back to the other owners with a plan, including an offer. Then they have three months to decide and if more than 75 percent of owners agree – both in unit entitlements and in a simple head count – you can proceed with selling the property with the proceeds going to the owners, relative to their unit entitlements.
If you’re interested, you can read more about it here
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.
29/09/2021 at 3:29 pm #58674I still think that Priority #1 is for you to get hold of the minutes of the AGM to verify what was RESOLVED and if possible to ascertain who voted for it.
I say this because you infer the levy increase “went through on the nod”.
I am no expert, but given you alone were at the meeting, one of the following three scenarios must have taken place (and the minutes will/should reveal this):
1. Lot owners must have been provided with paperwork included in the agenda for the AGM that allowed them to vote in advance by say ticking relevant boxes alongside relevant motions and sending that form to the strata agent; or
2. Lot owners communicated with the strata agent before the AGM making clear their voting intentions, even if this was not on the prescribed form; or
3(a). Assuming each of the other 4 lots have different owners:
The strata agent must have held at least 3 proxies and cast their votes in favour of the higher/special levy. I am assuming you voted against the higher levy or would have voted against if you knew it was a motion. Now here is where it gets interesting. If the strata agent held 3 proxies i.e. a majority of lot owners, given there are 5, then he/she breached the Act. In small stratas a person can hold only 1 proxy. Not more than 1.
The following is from NSW Fair Trading
Proxy limits
There are limits on the total number of proxies. The limits held by one person are:
- one proxy vote only for schemes with 20 lots or less, or
- in schemes with more than 20 lots, a number that is equal to no more than 5 percent of the total number of lots.
(b) Assuming of the other 4 lots, three are owned by the one person/company
A person who owns more than one lot in a strata scheme may appoint a single proxy in respect of all the lots they own. So if of the other 4 lots, Mr Smith owns one lot and Ms Jones owns 3 lots, the Ms Jones can give her three proxies to the agent to vote as her proxy.
3 lots out of 5 gives those in favour of the higher/special levy the majority they crave.
29/09/2021 at 5:30 pm #58679If the strata agent held 3 proxies i.e. a majority of lot owners, given there are 5, then he/she breached the Act. In small stratas a person can hold only 1 proxy. Not more than 1.
So the strata manager fills in the names of the secretary and the teaboy on the other two.
I’m more interested in Section 25 (7):
7) Limits on exercise of proxy by building manager, on-site residential property manager or strata managing agent
A vote by a proxy who is a building manager, an on-site residential property manager or a strata managing agent is invalid if it would obtain or assist in obtaining a pecuniary interest for, or confer or assist in conferring any other material benefit on, the proxy.
I wonder if the strata manager’s contract came up for consideration.
As has been noted already, Mr Mazed needs to get a hold of the agenda and voting record. The minutes should be distributed within 14 days of the meeting.
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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