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Our strata manager has told the Executive Committee that a by-law affecting some (but not all) lots has to be signed off by those particular lot owners who are affected by the by-law, before it goes to a general meeting – we’re talking about a proposed water consumption by-law which gives the Owners Corporation the right to recoup the water rates from lot owners whose lots have a common water meter (9 of the 19 lots in the Strata Plan). The Executive Committee interpreted the Strata Act as saying that a proposal for a by-law has to be voted on at a general meeting and, when approved at that meeting, it becomes binding on all lot owners affected by that by-law.
Does the same apply to any proposed by-law that may affect different lot owners at different times?
An example is a by-law affecting all additions attached to common property such as air conditioners, solar hot water systems, pergolas, etc. some of which are already in place whereas some will, no doubt, be added in future.
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Jef – In so far as the Water Rates (now called Service Availability Charges) would be already invoiced directly to the nine (9) Owners whose Lots share a common water meter, and those same Owners would already be contributing to the Plan’s Water Consumption Charges via their respective Levies albeit in accordance with the Units of Entitlement of their Lots and not the actual water their Lots consume, I don’t understand what the proposed Special By-Law is trying to achieve.
Perhaps you could clarify that.
With regard to Special By-Laws (SBL), only those that upon Registration make Owner/s responsible for the maintenance of some part of the Common Property (for which the Owners Corporation would otherwise be responsible) and/or grant Owner/s the exclusive use of some part of the Common Property require the prior written consent of those Owners to the making of such as SBL.
So the SBL that your O/C proposes (although I as yet don’t understand why) would require the consent of a minimum 75% of those Owners present both personally and by proxy at a General Meeting, with that percentage determined by the sum units of entitlement of those voting for consent and the aggregate units of entitlement for your Plan (i.e. a “poll vote”). So if around 7 of those 9 Owners attend the General Meeting and vote against the SBL, it will fail.
Remember also that a SBL is not legal until it’s Registered on the Strata Title.
Jef
I’m presuming that the 10 units with own meters are billed for their water consumption directly to each owner, based on meter readings. That means that the remaining 9 are billed to the owners corporation. Your new strata manager is correct in that the cost of the water should be recovered in proportion to unit entitlements rather than equal proportions from those owners connected to the common meter. I don’t know whether you need a special bylaw, if it’s put forward and accepted it would do no harm but if rejected it may be necessary to approach NCAT.
Dave
Jef – Dave’s comments are absolutely correct!
What your previous Strata Managers have been doing for 30 years is contrary to the provisions of Sect 78(2) of the NSW Strata Schemes Management Act (SCMA) and possibly under a strict interpretation of the NSW Water Act 2012 where water cannot be on-sold or even cost recovered without a Retail Licence.
It would appear that in order to both perpetuate what’s occurred historically and cover themselves for breaches of the SCMA , the new Strata Managers are pressing your Owners Corporation (O/C) to specially resolve to create and register an enabling Special By-Law and have affected Owners agree to its implementation.
That’s an understandable approach in my opinion, but as I said before (post 2) it will only take 7 of the 9 affected Owners to oppose the Motion and the SBL will fail, and as I stated here even if the SBL did pass it would be in breach of the SCMA.
As iniquitous as it appears, and on the assumption that all 19 Lots are under the one Strata Plan, the correct approach is for the O/C’s water consumption charges to be a budgeted expense in the Administrative Fund, and for that expense to be shared among all 19 Owners in accordance with the Unit Entitlements of their respective Lots as an inclusive component of their individual Levies.
You may well find that the marginal amount paid by each of the 19 Owners would be minuscule anyway in the overall scheme of things, and your O/C would not need to defend any future challenge to the NSW Civil and Administrative Tribunal (NCAT) by Owner/s.
The only other solution would be for the O/C to pass a SBL enabling the fitting of individual water supply meters to the 9 Lots that currently share a common meter, and to then convince the Water Supply Authority to read them and to invoice the respective Owners accordingly; good luck with that latter component.
The by-law should be an exclusive use by-law whereby the 9 lots have exclusive use of the common property water meter. The by-law can then set out how the costs are distributed between the 9 owners which should be up for negotiation between the users but does not necessarily have to be in line with unit of entitlements. The by-law should also stipulate how those costs should be recovered.
The owners corporation can not raise any levies, special or otherwise, as all levies must be distributed to all owners according to the unit of entitlements registered on the strata plan.
Sorry, but that’s just another “fiddle” that’s by no means unusual in Strata and which quite often achieves the purpose intended – at least until an Owner objects, or a more experienced Strata Manager identifies the irregularity, or a potential purchaser commissions a competent person to undertake a Strata Search that also identifies the irregularity, or their lawyer / conveyancer routinely requests a S109 Certificate that would in the case of Jef’s Plan currently show a Special Levy that’s not been raised for a purpose that’s permitted under the SCMA.
Jef, I for one would urge your Executive Committee to at least examine the financial impacts of correctly apportioning the O/C’s water consumption costs to all 19 Owners in your Plan before contemplating anything that amounts to a “fiddle”, even if it lasts for another 30 years; but that’s me!
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