• This topic has 31 replies, 6 voices, and was last updated 2 years ago by .
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  • #59118
    fruitzebra
    Flatchatter

      Our strata levy (nearly $2000 a quarter for a 3-bedroom unit) is very high for quite some time now. We’ll have our AGM in about 10 days. I am not a committee member. I want it to be lowered. What would be the best way of going about it? Should I raise it in the AGM or do I need to make a proposal beforehand?

    Viewing 15 replies - 1 through 15 (of 31 total)
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    • #59131
      TrulEConcerned
      Flatchatter

        As to raising the matter before the AGM in a timely manner, the horse has well and truly bolted. Certainly in the case of large stratas. The usual procedure is for either

        (a) the Secretary or Managing Agent well in advance of an AGM to ask owners if they have motions to list on the AGM agenda OR

        (b) as the above rarely takes place, an owner could write to the Secretary or Managing Agent well in advance of an AGM to establish the deadline for them to accept motions for consideration at an AGM and supply the motion in time

        As you have 10 days before the AGM, time is a bit tight. I suggest you now write to the Managing agent/Exec Committee listing the reasons you have for a decrease in the levy, what levy you are promoting be struck and for what time frame?

        Equally important, offer a solution that (a) does not bind the Exec Committee for say more than one year (this will raise the probability that your suggestion will receive support as the Exec Committee, if they agree to you, are only binding themselves at most to one year) and that (b) saves the committee “face”.

        Committees will often reply that they need time to study any proposal and that your views were sent late in the day and may ignore it altogether.

        Writing as a former Treasurer of a large (70 unit scheme), while I convinced the Exec Committee not to raise levies for 9 years, this took some effort on my part. I can say that the following option would have a greater chance of success ESPECIALLY coming from outside the Exec Committee.

        Say you pay $2,000 p.q. being $8,000 p.a. and you think, with evidence, that $1,500 p.q or $6,000 p.a. is reasonable given your reasons. As I don’t know your strata’s levy contributions in aggregate, taking your levy situation as my focus, rather than push for say your $2,000 p.q. be replaced with $1,500 p.q, you should, when communicating with the exec committee, agent and the rest of the owners

        (i) Make clear WHY $6,000 p.a is fair and reasonable;

        (ii) You acknowledge this issue is being raised by you late in the day (you should have done so ahead of the agenda being issued);

        (iii) While you believe your suggestion has merit, you agree not to bind the hands of the Exec Committee unnecessarily;

        (iv) Push for $6,000 p.a. to be struck this year, you may couch it in the form of assistance to owners during the corona virus epidemic, making clear the $6,000will be reviewed over the coming year, well before the next AGM; and

        (v) Don’t change to $1,500 p.q. Push to keep to a quarterly levy of $2,000 for each of the first three quarters with $0 being the levy for the last quarter. That will aid the Exec C;ttee in the event that they will return to the $8,000

        By the time the last quarter comes around either your views would have been vindicated, in which case the 2022/23 proposed levies will reflect them OR your views will be refuted and you’ll presumably return to $2,000 p.q for each of the next 4 quarters, with the levy holiday in the last quarter of 2021/22 providing a saving to owners, albeit a one off saving.

        • This reply was modified 2 years, 4 months ago by .
        #59134
        Jimmy-T
        Keymaster

          As to raising the matter before the AGM in a timely manner, the horse has well and truly bolted. Certainly in the case of large stratas.

          Fruitzebra doesn’t need to raise an item on the agenda – it’s already there, in the discussion about and approval (or otherwise) of the budget.

          What they really need to do is examine the budget in detail before the meeting and then propose amendments at the meeting, as they are perfectly entitled to do.

          If they feel too much is being spent on one service or item, or even that too much is going into the sinking fund, for instance,  they can raise it at the meeting. If they require details about individual items of expenditure they can ask questions at the meeting.

          If their challenge to the budget is well-founded, they won’t lack support from other owners who will be just as keen to pay less in levies.  But it has to be a detailed argument – not just saying that they feel they should be paying less then trying to back the budget into that.

          If there is one major item that they feel is costing too much or is unnecessary, then they may be able to slip that on to the agenda before it is issued.  But until they have seen the budget (which should be issued with the agenda) they won’t have much to go on.

          Writing to the committee to ask them to adjust the budget less than 10 days out from the AGM may have little or no effect apart from alerting them to the fact that a challenge is coming.  My experience of committees is that they are more likely to batten down the hatches and justify their desisions than undertake a review of their plans at this late stage.

          Arguing the point at the AGM isn’t ideal, but in this time frame it may be the best way – provided you have done your homework on the budget.

          And one final point – strata budgets are based on a combination of what the owners’ corporation need to spend on services and maintenance, and what they want to spend (on improvements etc).  They are rarely if ever based on what owners can afford or want to pay.

          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.
          • This reply was modified 2 years, 4 months ago by .
          #59137
          Boronia
          Flatchatter

            It appears that budgets do not have to be provided to owners prior to an AGM (from DoFT):

            Levies are calculated at the annual general meeting (AGM) by the owners corporation. To set the levies, a budget must be given which shows the current financial situation and any estimates of payments to be made and received. The budget must be:

            • distributed with the notice of the AGM, or
            • tabled at the meeting before voting on the levy motion.

            Many SMs seem to follow the second alternative which does not give owners any time to effectively review and  assess implications.

             

            #59144
            Jimmy-T
            Keymaster

              I wasn’t aware of that.  In which case, the OP should look at last year’s financial figures and see what discrepancies they can find there.  Otherwise, be prepared for a quick read of the finances on the night.

              Either way, it doesn’t exactly help in the good financial management and transparency of strata schemes, does it?

              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.
              #59147
              TrulEConcerned
              Flatchatter

                Jimmy wrote:

                Fruitzebra doesn’t need to raise an item on the agenda – it’s already there, in the discussion about and approval (or otherwise) of the budget.

                What they really need to do is examine the budget in detail before the meeting and then propose amendments at the meeting, as they are perfectly entitled to do.

                True, the item is on the agenda and a discussion can be had if someone speaks up at the AGM. However, in my experience, owners who may agree with the fundamental point of a lower levy that fruitzebra makes, are unlikely to support it at an AGM without having enough time to consider it before the AGM. Fence sitters will most likely be swayed by the Exec C’tee. Also promoting a lower levy may be met with resistance by the exec c’tee to the extent that not only, as Jimmy writes

                My experience of committees is that they are more likely to batten down the hatches and justify their desisions than undertake a review of their plans at this late stage

                but they could scare owners into falsely concluding that future capital works will be in jeopardy if the funds are not in the kitty, even if they will not be used for a while.

                #59152
                Jimmy-T
                Keymaster

                  in my experience, owners who may agree with the fundamental point of a lower levy that fruitzebra makes, are unlikely to support it at an AGM without having enough time to consider it before the AGM.

                  But they may never have time to consider it before an AGM if that’s when the budget is first sighted. So what do you do? Joint the committee, would be an answer – good luck with that.

                  And as for “they could scare owners into falsely concluding that future capital works will be in jeopardy if the funds are not in the kitty, even if they will not be used for a while,” that’s a bit fanciful.

                  Speak up at the AGM, fruitzebra, and don’t be put off by all this stuff about what people might think, what they might be scared of and how they might react.

                  You are entitled to ask questions and expect answers – that’s what AGMs are for.  You might not win the argument but at least you and your neighbours will be better informed.

                  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.
                  #59159
                  Jimmy-T
                  Keymaster

                    Say you pay $2,000 p.q. being $8,000 p.a. and you think, with evidence, that $1,500 p.q or $6,000 p.a. is reasonable given your reasons. As I don’t know your strata’s levy contributions in aggregate, taking your levy situation as my focus, rather than push for say your $2,000 p.q. be replaced with $1,500 p.q, you should, when communicating with the exec committee, agent and the rest of the owners

                    I have a major problem with the notion that you can arbitrarily cut a budget by 25 percent

                    We all have to accept that our buildings need a certain amount to run. If you want to cut the levies, you have to cut the spending.  So where do you find the cuts?

                    You can’t cut spending without cutting services or spending less on the services you have (except in discretionary areas like sinking fund contributions – and that is poor short-term thinking).

                    To find out where you might cut spending, you have to know what is being spent.  Then you have to decide whether you want to cut the services or find cheaper providers (good luck with that!)

                    I honestly think the best that fruitzebra can do is stand up at the AGM and ask if there are any areas where savings can be made and, if the notice of the meeting hasn’t been issued yet, propose that before next year the strata committee goes through every item of expenditure and finds potential savings for the future.

                    FYI, you can ask for an agenda item to that effect to be included up until the official notice of the meeting is issued.  That’s the law.  Get an agenda item in now and ask for it to be included.

                    You probably won’t be able to effect change this year unless there are significant areas of optional expenditure that are easily identifiable and which could be removed without harming the building or its residents.

                    If you spot them and bring them to the other owners’ attention then you have a chance of having them knocked off the budget.

                    But at this stage the strata manager is likely to resist any changes as they will then have to go away and recalculate everyone’s levies.

                    One other thing, the coronavirus has had an effect on strata levies. Increasing numbers of owners – especially investors – have been having trouble paying them.

                    But the strata scheme’s bills still need to be paid so this is probably the worst possible time to be asking for a levies reduction as your scheme may have lost the financial buffer it needs to ensure it can keep paying its bills at a time when its income has been reduced.

                    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.
                    #59155
                    fruitzebra
                    Flatchatter
                    Chat-starter

                      Thanks a lot for all your comments! I want to ask another question RE the AGM itself. Usually it is conducted late in the year, but this year, under such circumstances (lockdown, etc), it was scheduled way ahead of time, in less than 10 days’ time. I was a little surprised. Today the owners received an email from the strata manager asking us to update our contact details according to The Public Health (COVID-19 Self-Isolation) Order (No 3) 2021, commenced on 28/09:

                      https://legislation.nsw.gov.au/information/covid19-legislation/self-isolation

                      On the above website, there are many such orders and we were just notified to update strata rolls now, when NSW is going to reopen. This makes very suspicious of the motives of the strata manager and the strata committee.

                      Here I should mention an issue in the strata committee. Currently there are only 2 members in the committee. We are a small scheme, fewer than 15 owners. Most owners are investors and usually don’t attend AGM. So basically they decide everything. I tried to join the committee last year, but the committee and the strata manager used some excuse to exclude out of it, since I was new to the strata and strata rules. I want to talk to other owners, but it was nearly impossible to obtain other owners’ contact details.

                      According to the above Public Health (COVID-19 Self-Isolation) Order (No 3) 2021, it seems that every owner should have each other’s contact details during the pandemic. Am I right? But we haven’t been told to update contact details during the worst time of the pandemic. Now we were asked to do so, and in such a short notice to have our AGM.

                      So now I want to request the AGM to be scheduled at a later date, since the notice is very short as I mentioned above. I want to ask how to deal with this urgent issue. I will email to request rescheduling, but my guess is they will ignore my request and just go ahead.

                      #59163
                      Jimmy-T
                      Keymaster

                        Thanks a lot for all your comments! I want to ask another question RE the AGM itself. Usually it is conducted late in the year, but this year, under such circumstances (lockdown, etc), it was scheduled way ahead of time, in less than 10 days’ time.

                        AGMs can be conducted at any time provided there is one every financial year.  I wouldn’t read too much into the timing.

                        Today the owners received an email from the strata manager asking us to update our contact details according to The Public Health (COVID-19 Self-Isolation) Order (No 3) 2021, commenced on 28/09:

                        https://legislation.nsw.gov.au/information/covid19-legislation/self-isolation

                        That order applies to strata schemes that have been identified as high risk or at risk from covid infection.  Your strata manager was entitled to ask for contact details but under  the Strata Act Section 178 – which applies at any time.

                        The confusion may arise from a letter sent out by Chief Medical Officer Kerry Chant a couple of weeks ago, telling strata managers to update their records and close down strata gyms.  This was well-intentioned but a bit off the beam.  The idea was so that the authorities would know who was in any building that had a covid break-out … but then didn’t really address the buildings that don’t have strata managers.

                        The simple fact is that you are supposed to keep your strata roll up to date anyway, and if asked to do so by the committee, the strata manager is entitled to ask for the details.  There’s nothing sinister in any of this (apart from your strata manager citing  an irrelevant Public Health Order instead of the strata Act).

                        Currently there are only 2 members in the committee. We are a small scheme, fewer than 15 owners. Most owners are investors and usually don’t attend AGM. So basically they decide everything. I tried to join the committee last year, but the committee and the strata manager used some excuse to exclude out of it, since I was new to the strata and strata rules. I want to talk to other owners, but it was nearly impossible to obtain other owners’ contact details.

                        You are entitled to see all documents held by the strata manager on behalf of the scheme, this includes the names, addresses and email addresses of the other owners.  They will try to cite privacy which is utter BS.  Privacy laws don’t apply to small strata schemes (even fairly big ones).

                        I would also be very interested in who nominated the incumbent members to the committee.  If they are co-owners they can’t self-nominate.

                        According to the above Public Health (COVID-19 Self-Isolation) Order (No 3) 2021, it seems that every owner should have each other’s contact details during the pandemic. Am I right?

                        No. You’re wrong.  This has nothing to do with that PHO. However owners have the right to ask for and receive each other’s contact details if they want them at nay time, covid or not.

                        But we haven’t been told to update contact details during the worst time of the pandemic. Now we were asked to do so, and in such a short notice to have our AGM.

                        I live by the maxim that you should never ascribe to malice anything that can just as easily be explained by incompetence.

                        The government has dragged its feet in dealing with strata as a special (and highly vulnerable) case.  They are just playing catch-up. I would guess this may be no more than your strata manager trying to get the small schemes out of the way before the big ones start rolling in and everyone is able to attend them.

                        So now I want to request the AGM to be scheduled at a later date, since the notice is very short as I mentioned above. I want to ask how to deal with this urgent issue. I will email to request rescheduling, but my guess is they will ignore my request and just go ahead.

                        Ask for the AGM to be delayed until such times as owners can attend – which will be reasonably soon – or, failing that, repeat your request for the email addresses of the other owners as a matter of urgency.  If they cite privacy, tell them this is nonsense.  The Privacy Act doesn’t apply to corproations with a turnover of less the $3 million a year. You are entitles to the name, addresses and email addrss of anyone and everyone on the strata roll.

                        Since this is planned as a virtual AGM, there is no cost attached to postponing it as there is no requirement to hire a room.

                         

                         

                        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.
                        • This reply was modified 2 years, 4 months ago by .
                        #59168
                        fruitzebra
                        Flatchatter
                        Chat-starter

                          I’m having a hard time to get the contact details of other owners. Apparently, the committee and the strata manager don’t want me to access that, which is totally wrong. I paid ~ $40 to obtain a copy of the strata roll a while ago, but there is no email, no phone number details for all the owners. Even the addresses are a bit of “phony”. It just listed the current strata scheme address, which they don’t live in as they are investors. So I cannot even manually write a letter and post it to them!

                           

                          #59170
                          Jimmy-T
                          Keymaster

                            Write to them and tell them that you have had advice that you are legally entitled to all the contact details on the strata roll, including email addresses and other relevant records that they may have.  There is no privacy issue here.

                            Becasue you have asked for and paid for them some time ago, failure to provide them again could lead to action at NCAT to have the strata manager and/or committee removed and replaced by a statutory manager under Section 237 of the Strata Schemes Management Act (2015).

                            Failure to provide the information immediately will also result in a complaint to Fair Trading about the strata manager, seeking disciplinary action under Section 191(c) of the Property and Stock Agents Act in that they have “in the course of carrying on business acted unlawfully, improperly, unfairly or incompetently.”

                            You can do this online using the Fair Trading online complaint form: https://www.fairtrading.nsw.gov.au/help-centre/online-tools/make-a-complaint.

                            Be polite but firm.  Don’t engage in wild accusations or conspiracy theories. They have duties and responsibilites and they have simply failed to comply.  The next move is up to them.

                            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.
                            #59171
                            Jimmy-T
                            Keymaster

                              Actually, I think it would be worth asking our sponsors Strata Answers to step in (for a fee) and explain the facts of life to the strata manager before we unleash the dogs of war.

                              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.
                              #59178
                              TrulEConcerned
                              Flatchatter

                                Jimmy’s suggestion of filing a

                                complaint to Fair Trading about the strata manager, seeking disciplinary action under Section 191(c) of the Property and Stock Agents Act in that they have “in the course of carrying on business acted unlawfully, improperly, unfairly or incompetently.”

                                is vert good.

                                I did just this a month ago, but so far heard nothing back from FT.

                                This type of complaint targets the agent himself (not the strata committee or OC) and should, when confronted by FT, focus the agent’s attention on what you consider to be his bad behaviour. As Jimmy writes, the compliant mechanism is online. It is also simple and costs nothing. What I found interesting is that at the end of the form the complainant is asked “what do you want to happen to the agent”. Here you can reply “fine him; strip him of his licence etc”

                                #59180
                                Jimmy-T
                                Keymaster

                                  But what invariably happens with strata managers is that they get a phone call gently suggesting they lift their game. But at least they are on FT’s radar and they really don’t like that.  That’s why it’s worth doing it, even though no strata manager in NSW has ever lost their licence through sheer incompetence (and there have been plenty of candidates).

                                  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.
                                  • This reply was modified 2 years, 4 months ago by .
                                  #59182
                                  fruitzebra
                                  Flatchatter
                                  Chat-starter

                                    Thanks for your suggestions! I’ll definitely consider.

                                    Another question, what would happen in the AGM if a voting ends with a tie, for example voting for a member for the committee or over a strata issue?

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