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Jimmy Thomson’s recent article
12 tiny strata law changes that will make a big difference
should really have a thirteenth item that relates to bathroom renovations.
Inexplicable last minute changes to the draft of Sections 109-111 of the new Strata Schemes Management Bill 2015, which deal with apartment works, will have highly dysfunctional consequences for the everyday operation of strata schemes.
Earlier drafts of Sections 108-111 reflected a simple three-tiered apartment renovation approval framework where all routine renovations, including routine kitchen and bathroom renovations, were covered by Section 110 of the bill whereby approval could be granted by an ordinary resolution of the owners corporation. Such decisions are normally delegated to strata committees and indeed currently routine renovations are handled by strata committees and approved subject to conditions which protect the interests of other owners.
In its current final form, the bill explicitly excludes any work requiring waterproofing from section 110 and consequently even routine, everyday bathroom renovations must be approved under section 111 by a special resolution at a general meeting. Unlike matters which are subject to ordinary resolutions, matters requiring special resolutions cannot be delegated to, and decided by, strata committees. Therefore owners who wish to secure approval for a routine bathroom renovation will have to call a general meeting of their owners corporation, hope that quorum will be achieved and that not more than 25% of the owners will oppose the motion. In a large scheme this is a daunting and expensive exercise to carry out.
According to the new Bill essentially the same type of approval will now be required to carry out a routine bathroom renovation in a strata scheme as that required to terminate the strata scheme itself. This is an absurd, irrational and counterproductive requirement that defies common sense. It will create a nightmare of red-tape and confusion in strata schemes, contrary to the originally stated objective of the strata law review to reduce red-tape.
Note that works which change or modify the common property as it is defined, including apartment renovations which include such works, currently require approval by special resolution at a general meeting under section 65A of the current Act. Section 108 of the new Act represents an equivalent requirement and provision. This is a sound and logical provision and is not the issue here.
However as it stands, Section 111 of the new act arbitrarily extends this requirement to routine apartment renovations which simply improve or restore the condition of apartments without changing the lot as it is defined in plans and specifications.
The above distinction between renovations on the one hand and alterations or additions to the common property on the other, is similar to that which separate works that require a DA and those that don’t. It is relevant to note that under the NSW building codes bathroom and kitchen renovations are listed as exempt developments that do not require approval.
The above aspects of the new bill will have absurd consequences. For example, if waterproofing fails in an apartment the owners corporation is obliged to repair it and, under the new Bill, can be sued if it fails to do so. However, if an owner wants to take the opportunity to renovate the whole bathroom in the process, including the waterproofing, and is prepared to pay for the work, the strata committee will not be empowered to approve this, as is now the case. Instead, the owner, according to Sections 110 (7) (d) and 111 would have to call a general meeting. This is red-tape madness.
It seems imperative that the Strata Scheme Management Bill 2015 be amended before it takes effect to correct this anomaly and to restore the originally intended three-tiered approval framework reflected by the earlier drafts of sections 108-111, where all routine lot renovations can be approved under section 110, by an ordinary resolution at a general meeting or by a strata committee.
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John – I’m sure that Jimmy can and will respond for himself, but in the meantime you may wish to consider that the exclusion of waterproofing works from the proposed Sect 110 may be related to the prevalence of leakage from incorrectly applied waterproofing materials, the impacts of that leakage upon other Lots and Common Property, and changes to the requirements of the NSW Dept. of Fair Trading that also single-out waterproofing as an activity now requiring a specific license and for a Statement of Compliance to be provided to whoever it is that has commissioned the works.
I’m not sure that so-called “routine bathroom renovations” would necessarily include waterproofing, but the proposed Sect. 110 does provide Owners Corporations with the ability to approve and register a generic Special By-Law covering bathroom renovations or more specifically the waterproofing of wet areas, and to thereby delegate relevant consents to its Strata Committees.
I’m with Whale on this one. “Routine” is one of those dangerous words that can mean everything or nothing.
I am told that by far the most common problem in new buildings is waterproofing of bathrooms simply because it is relatively difficult to get it absolutely right and the damage done from water leaks and the hassles involved in getting them fixed are a nightmare.
Isn’t it better to have an over-zealous restriction on people who “only want to change the tiles” and end up flooding apartments to the side and below, than to have a free-for-all that let’s renovations through on a nod and a wink and then expects neighbours to deal with the consequences if it’s not done properly?
Bathroom renovations are like a second marriage, a triumph of hope over experience.
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.
I completely agree with Whale and Jimmy on this one. Bathroom leaks are by far the most common problem in our scheme, and many others from what I have heard of. It’s one of the most common renovations a new owner will carry out (apart from kitchen renos) to existing schemes. I doubt waterproofing issues are much of a problem in new schemes, I find it much more prevalent when an over zealous owner wants to rip out the original tiles and re waterproofs the bathroom when renovating. Whale, in our scheme owners who ask for permission to ‘renovate’ their bathrooms almost always rip out the existing tiles and waterproofing, what other renovations are you really going to do in a bathroom? Apart from changing vanities and toilets…
Bathroom Renovations:
The difficulty I’m up against is that I advised our SMA five months ago that I wished to undertake a bathroom renovation. They are insisting on a General Meeting/Special Resolution/Registration on Title/Legal Fees/Printing/Postage/Administration Fee etc etc. Last year they quoted $7,000 for a General Meeting…so then add all additional Legal expenses etc.
Despite repeated requests to issue a clear quote they have refused to come to the party.
Having undertaken a kitchen renovation some two years ago, dealing with the EC/SMA was an absolute nightmare. We ended up at the NCAT when all the honorable people in charge of our scheme told a whole pack of porkies to the NCAT. I’m reluctant to do anything now without knowing what I will be charged for.
Months of ‘nil response’ from the SMA has seen them last night give me an 18 hour deadline to say ‘yes, go ahead with a General Meeting’ when they still refuse to clarify how much one will be invoiced for their (mis)management of this process.
Happy to use registered/insured trades people to undertake the renovations with responsibility for workmanship coming back to the tradies/me.
Very unhappy to allow our SMA to invoice me at their desire for their ‘services’…
There has got to be an easier way? Mind you, where I live it’s called “payback” for picking them up on their Illegal activities over so many years. Resident Owner feel as though we are on every occasion held to ransom over the management of our homes. Which brings us back to the issue of NCAT decisions…
Hi Millie,
I have seen advice before from a very competent Strata Lawyer (who wrote the book on Strata Law in NSW) on how to deal with a similar issue.
Once you have informed them of the proposed works, the main part of his advice was to ‘offer’ to pay a deposit to the OC that is to be refunded after the works are complete. If the OC wished to retain anything from the deposit, they would need to provide evidence (most likely Expert report) detailing any (unlikely) damage your contractors would have caused to the common property in order to do so.
If they refuse, the NCAT can make an order approving your internal works bypassing the office bearers entirely!
I am unsure how far down the process you are, but I certainly would not be offering to pay for a general / executive meeting to be held as they can place the issue on the agenda at the next meeting to approve or disapprove. After all, the next meeting should occur within a 3 month gap at most and the OC are responsible for conducting / paying for its own meetings.
If they (EC, forget everyone else for the time being) don’t pass a motion allowing the internal works, or are playing silly beggars just to be difficult, offer to pay the $7,000 in protest and inform them that you will seek to recover the monies in a Court of Law together with any legal costs and damages for Nuisance against them personally (EC under sect 117 SSMA; and Strata or other Managers in General under sect 122).
NCAT are duty bound to install a Compulsory Strata Manager if the OC cannot function properly / not fulfilling their duties so I would collect as much evidence to that effect. All in all, if they are indeed bullying you as can be inferred by your posts, they may have the pleasure of paying dearly for their games playing and / or losing any control of the schemes functions.
Either way, even if your relationship is soured by past conduct, make sure you are courteous and considerate in all your dealings with them and try your best to get / keep everything in writing.
Good luck with the incumbents!
ThomThanks Thom/Isydowner
I’ll give it yet another try, based on what you’re written.
Re your: “NCAT are duty bound to install a Compulsory Strata Manager if the OC cannot function properly…” In our case the CTTT turned down a 2013 request which had more than 1,200 pages of supporting documentation and in late 2015 they turned down another request, citing that there wasn’t any substantial evidence provided…and that such an appointment is a draconian measure, meaning that they apparently don’t think it’s a right and proper measure to appoint a compulsory strata manager in this day and age.
We have mountains of Legislation written in this State; just try getting any of it applied/enforced. I call it ‘death by attrition’.
Best wishes
Brief, the response today is: Anywhere between $5,000-$7,000 to process a request to undertake bathroom renovations plus a $5,000 bond to be returned when and if the Strata Manager is satisfied that the work has been done properly. And yet a commercial lot in our scheme can undertake a full, major fit out including changes to common property twice in two years, all ok’d with a nod from the Executive Committee at an EC Meeting.
This is just the latest example of Owners who have called for compliance with Legislation being held to ransom.
And the NCAT won’t do a thing.
The NCAT Adjudicator six weeks ago manages to list the Applicant and 23 respondents in the official NCAT document (available online – yes?) except for one – a State MP/the now former EC Chairman. But I guess everyone can make a mistake, NCAT Adjudicators included…
Thank goodness this forum gives one somewhere to scream, even if the scream is silent.
John – whilst I agree that a carefully worded and properly considered consent to an Owner’s renovation works by an Executive Committee (E/C) may adequately protect other Residents and the Owners Corporation (O/C) from inconvenience such as noise, and from activities by unlicensed and uninsured people, that’s not “supervision” of the works (and it never can be) and it cannot offer protection from the impacts of incompetency.
Have you ever tried to have post renovation waterproofing faults rectified in a timely manner and been fobbed-off to a sub-contractor who actually did the work under the license of the prime contractor who was rarely on the job, and then been advised by the NSW Department of Fair Trading that while it issues licenses to tradespeople, that doesn’t always mean that they’re qualified, it doesn’t guarantee that their work will be satisfactory, and that it’s on-line license checking service doesn’t list past insurance claims unless those were accepted/paid by their insurer.
Well I have, once and in a single storey free-standing property, but that experience was enough for me to realise that the impacts of that same fault in a strata property would be significantly greater, and that despite the best efforts of some E/C’s and Strata Managers problems do still arise from renovations, from waterproofing in particular, and so the NSW Government’s proposal that renovation works by Strata Owners that involve waterproofing of wet areas be canvassed more broadly by the Owners Corporation as a whole as opposed to under delegation by a well-intentioned E/C, that a higher degree of consent be required, and that workers hold a specific waterproofing license and provide a Statement of Compliance (with Standards) are all steps-forward in my opinion.
If individual E/C’s such as yours (and mine that includes construction professionals) are confident that they can provide the same degree of competency and scrutiny to Owners’ wet area renovation proposals as would >75% of Owners at a General Meeting, then the proposed Legislation provides the ability for such Committees to put a special resolution before its O/C and to seek its concurrence for the Registration of a generic Special By-Law covering the waterproofing of wet areas; thereafter consent to all such proposals could rest with the E/C.
@John Kaunitz said:
WhaleWe need to untangle the logic of what you saying because I don’t disagree with the concerns you start with. Yes you can have problems with contractors and yes not all strata committees are competent.
However, none of this requires a special resolution requirement to address and having a special resolution passed per se will not protect the owners corporation. It will just make an everyday process to approve routine and essential renovations more difficult.
The pages on Flat Chat are full of tales of people who have had work approved on a nod and a wink – and then their successors as owners and committees are left to carry the can. If you don’t have a system that has some legal authority behind it, it will be exploited, ignored and abused.
In particular, at present, strata committees can set any condition they like in approving a renovation.
No they can’t. Only owners corporations can set conditions in by-laws and you can’t create a by-law that supersedes an existing or superior law.
It has been suggested that the owners corporation could require that their own contractor install the waterproofing. This is not unreasonable since the waterproofing is common property – the property of the owners corporation.
This is news to me. Owners Corps can only insist on specific contractors if there is no alternative that could feasibly do the job properly.
As the law now stands, if owners don’t trust their strata committee they can nominate bathroom renovations as something the strata committee cannot approve. This is a standard motion at every AGM that specifies matters the strata committee cannot deal with.
The AGM – where this motion would be presented – is also where the owners choose their committees. If they don’t trust them, why would they elect them?
The new legislation forces all schemes to approve such routine matters by a special resolution which is a huge impost on all owners, including those in schemes which have dealt with this issue in an effective, professional and trouble free manner for years .
You mean, permission has been granted without any requirement on the part of the owner to take responsibility for the work done and the effect it has on common property, through the instrument of a special resolution by-law? Effective and trouble-free are subjective assessments. Professional? I don’t think so.
It is also a fundamental misuse of the special resolution concept.
In your opinion …
My reading of strata law is that the extraordinary powers of special resolutions are intended to deal with constitutional changes to the strata scheme such as changing common property (as it is defined) or implementing new by-laws. A special resolution is also the mechanism under the new legislation to gain approval for the ultimate constitutional change, namely to wind up the scheme.
Your reading is specious and fundamentally wrong. Special resolutions are designed to allow people to make changes to their own lots and affected common property while accepting responsibility for the ongoing maintenance of the work. Why else would the Act say that in the absence of agreement of who is responsible, that falls back on the owners corp. It’s all about making people responsible for their actions, either as owners or as members of the Owners Corporation.
The requirement to apply the same level of approval to bathroom renovations that every owner could expect to get approval for in a reasonably straightforward manner, is bizarre and absurd to say the least.
It really isn’t. It’s about compelling people to accept they have responsibilities as members of a community. That community will decide how stringent they wan their conditions to be.
The red tape generated is likely to benefit strata lawyers or strata managers who will deal with the resulting legalities but is certainly contrary to the originally stated objective of the strata law review which led to the new legislation.
And the originally stated objective was …?
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.
John said…..the new legislation forces all schemes to approve such routine matters by a special resolution which is a huge impost on all owners, including those in schemes which have dealt with this issue in an effective, professional and trouble free manner for years.
John – despite the fact that this topic is becoming somewhat of a novelette, clearly my communicative ability is falling short and so I just have to try one last time to explain my core opinion points being that:
- The current Legislation prescribes that any renovation works that an Owners Corporation (O/C) or an individual Owner may propose that involves an addition, alteration, or the erecting of a new structure on the Common Property may only be consented by way of a special resolution at a General Meeting. So Executive Committees (E/C) cannot currently make decisions of that type, and under the bathroom renovation scenario that you reference, any consent to that by an E/C would have no greater standing than the proverbial “wink and a nod”, and would additionally leave the O/C responsible for the on-going maintenance and repair of all common areas within the Owner’s renovation due to no Special By-Law to the contrary being concurrently resolved at a General Meeting.
- In addition to the proposed Legislation relaxing the consent procedure (above) for some minor renovation proposals by Owners (good!), it still provides an E/C with the ability to put a special resolution to a General Meeting of the O/C in order to have a generic Special By-Law (SBL) put in place to cover the renovation of wet-areas such as bathrooms throughout the Plan, that may well embody some of the conditions that you’ve mentioned. So to reiterate, under the Legislation as now proposed that’s just ONE special resolution, not one for each an every renovation as you seem to suggest, because once the SBL’s registered the E/C can provide conditional consent to all future renovations that fall within its scope!
- One last point – contrary to your statement that a special resolution (to a bathroom renovation) is the same mechanism that’s required to gain the O/C’s consent to wind up a Plan, that’s in fact the final step in what will be a very detailed and thorough process for the latter, and so your analogy in that regard a little misleading.
Anyway that’s all from me John, because for among other things, the Legislation will almost certainly proceed to Law this June and 12 months hence may be a better time to again debate its application.
Gents,
All comments are extremely interesting, well considered and very helpful, but I still feel as if I’m being held to ransom by our OC/SMA. The situation in our 160+ NSW Strata:-
The SMA/EC failed to place a Motion on our November AGM following my August 2014 request for bathroom renovations, but did place a Motion on the Agenda for another Owner wanting to renovate their bathroom. The AGM Minutes from November have yet to be distributed.
The SMA confirms no charge to put a Motion on the Agenda for the AGM.
Prior to the AGM the SMA, who acts as our OC’s Secretary, failed to respond to my written requests and questions about bathroom renovations in the two month period allowable under Section 138 (2)(b) of the SSMA.
SMA quotes: $5,000.00-$7,000.00 for ‘Admin’ to organise an EGM, payable by the Lot Owner to the SMA (of course). To date, two Owners have complied, ‘paper’ EGMs have been called, quorums for these EGMs have not been reached – no Minutes of the EGMs distributed – so these Owners have been given ‘conditional approval, ie a wink and a nod, by the SMA at subsequent ‘paper ECMs’ where the Strata Manager was the only person present, to proceed with renovations…after all, the Owners had paid the SMA $5,000-$7,000 each in ‘admin’ charges.
As well, the Tenant of one Commercial Lot has twice, in the last 18 months, completely guttered and done a major fit out including changes to common property wiring, walls etc, all with approval at EC level (not at a General Meeting), with no undertaking necessary re Bonds, assuming responsibility to the OC in the case of faulty workmanship etc.
With 160+ Lots, it’s close to impossible to engage Owners in a paper EGM over Bathroom renovations (let alone anything else) and to reach a quorum.
This is therefore turning out to be an absolute mini-gold mine for our SMA, who I don’t trust for a second.
No-one on here will know your situation in its entirety, so I suggest (do so only if you agree) writing a letter to your Owners Corporation c/o the Strata Managing Agents (“SMA”) and request the following;
Please confirm why my written request re ‘Bathroom Renovations’ dated XX August 2014 [Insert exact date] was not placed on the November 2014 AGM as sought.
As you are aware, the Owners Corporation is otherwise required under Section 138 (2)(b) of the SSMA to respond to such requests in a reasonable and timely manner. This request was duly served on the acting Secretary (SMA) within the required timeframe and I have not yet received a response.
Furthermore, I note that a similar / separate Motion was placed on the Agenda regarding another Owner/s who also wished to renovate their bathroom/s.
1. Please provide copies of the subsequent quotes / paid invoices in relation to the ‘admin’ costs charged by the Owners Corporation to Lot Owners [Insert their Unit / Lot number here] accordingly.
2. Please confirm the precise legislation relied upon by the Owners Corporation to charge individual owners direct for EGMs held ‘on the papers’.
3. Please also provide copies of the quotes and invoices paid in relation to the works completed by the tenant of Commercial Lot XX [Insert Lot number] – specifically in regards to the Major fit-out that included changes to common property (valid s65a SSMA resolutions passed), the bond paid and any practical completion certificates regarding those works.
Millie:
Amend the above as you see fit, but I’d be interested if Whale or Jimmy T can confirm the following;a. Is there even such a thing as a ‘paper’ EGM?
b. Aren’t Paper Meetings are for the EC members (only) to make decisions without an actual meeting being held?
c. Is a quorum needed for ‘paper’ meetings?
Although, it makes sense that h the subsequent ECM in which those resolutions are formally ‘resolved’ does require a quorum to be met!!!
d. Also, $5-7k for a meeting held ‘on the papers’ has to be complete nonsense?
Finally, if your strata manager doesn’t reply, seek to have the NCAT make an order to force the OC to supply you with those documents… To which you are fully entitled to receive.
Fingers crossed you get a positive response, but if you don’t you should keep any written responses as evidence against your SMA and OC. NCAT should make an order for your renovations to be carried out so long as they are internal to your lot.
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