Roof space renovation legal?

Yes they will need a special resolution by-law (75 percent vote in favour).

Plus, on the basis of a ruling in the High Court, they will need to pay the owners corp the value of the roof renovationcalculated thus x-(y+z) where
x = an accepted estimate of the value of the renovated unit
y = an accepted estimate of the value of the unrenovated unit
z = the cost of the renovation (including legals and by-laws)

It’s a good way of giving them what they want and allowing the sinking fund to get a boost too.

Naturally, the by-law will transfer all responsibility for maintenance of the roof space to the renovators.

The renovators would either have to get a unanimous agreement to have the unit entitlements redistributed, or go through a lengthy and potentially expensive process at NCAT.  On the bright side, their levies would go up and yours would go down.

Regarding recourse after a refusal to pass the by-law, the renovators might seek orders at the Tribunal  (NCAT) under section 140 which says; “An Adjudicator may order an owners corporation to consent to work proposed to be carried out by an owner if the Adjudicator considers that the owners corporation has unreasonably refused its consent and the work relates to any of the following … alterations to common property directly affecting the owner’s lot.”

Now, I am not a lawyer (and I strongly advise you to contact a strata specialist if you are concerned about this) but I think the renovators would have to have a very convincing case, absolutely watertight and erring on the side of generosity towards the other owners, for the Tribunal to overturn a valid decision taken at a properly constituted general meeting.  It would help if you got the other downstairs neighbour onside too. 

140   Order relating to alterations and repairs to common property and other property

(1)  An Adjudicator may order an owners corporation to consent to work proposed to be carried out by an owner if the Adjudicator considers that the owners corporation has unreasonably refused its consent and the work relates to any of the following:

(a)  alterations to common property directly affecting the owner’s lot,

(b)  carrying out repairs to common property or any other property of the owners corporation directly affecting the owner’s lot.

(2)  An Adjudicator may make an order approving of alterations or repairs already made by an owner to common property or any other property of an owners corporation directly affecting the owner’s lot if the Adjudicator considers that the owners corporation unreasonably refused its consent to the alteration or repairs.

(3)  An order under subsection (2) is taken to be the consent of the owners corporation to the alterations or repairs concerned and may be expressed as having effect from a day specified in the order that occurred before the order was made.

(4)  An Adjudicator may specify in an order under this section whether the owners corporation or the owner of the lot concerned has the ongoing responsibility for the repair and maintenance of any additional property arising out of an alteration or repair to common property approved under the order.

(5)  If an order makes provision for the owner of a lot to have the ongoing responsibility for the repair and maintenance of any such additional property, the order also has effect in relation to any subsequent owner of the lot.

(6)  In deciding whether to grant an order under subsection (2) or to provide for the order to have effect from a day that occurred before the date of the order, an Adjudicator may take into account the conduct of the parties in the proceedings, for example, if an owner did not first seek the consent of the owners corporation before carrying out the alterations or repairs.

(7)  An application for an order under this section may be made only by a lessor of a leasehold strata scheme or an owner.

144   Order granting certain licences

(1)  An Adjudicator may order that the applicant for the order, and any occupier of the lot of which the applicant is the owner, may use specified common property in the manner, for the purposes, and on the terms and conditions (if any), that are specified in the order.

(2)  An Adjudicator must not make an order under this section unless satisfied:

(a)  that the lot of which the applicant is owner would otherwise be incapable of reasonable use and enjoyment by the current owner or occupier of the lot or generally by an owner or occupier of the lot, and

(b)  that the owners corporation has refused to grant a licence to use common property in a manner, for purposes, and on terms and conditions as would enable the current owner or occupier, or generally any owner or occupier, reasonably to use and enjoy that lot, and

(c)  in the case of a leasehold strata scheme, that the lessor of the scheme has, before the making of the order, been given an opportunity to make representations to the Adjudicator with respect to the application for the order.

(3)  An order under this section, when recorded under section 209, has effect as if its terms were a by-law (but subject to any relevant order made by a superior court).

(4)  An application for an order under this section may be made only by an owner.

@4atRW said:
Thanks again for the advice.

Could you please clarify about the voting. If successful, would the renovators get extra voting power?

Voting power is based on unit entitlements.  The adjustment of UEs is far from automatic and in fact can be expensive and cumbersome.  So your upstairs neighbours will only get the extra voting power if they are prepared to pay for it and do all the legwork required (I assume you and your other neighbour won’t).