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01/05/2015 at 1:52 pm #10025
Our strata plan is a block of units, shops beneath, and 3 free standing garages out the back. Common property between. I’m a tenant not an owner.
A woman bought one of the shops (actually, two shops adjoined. She found a tenant and has renovated to a restaurant.
The problems:
1. She has already built a grease trap on common property, and installed an external air duct that residents are complaining about.
2. She has one garage (2 story, storage at top) and an adjoining car space. She has had a DA approved to extend her garage by extending the top floor of the garage over the top of her car space, and converting this to a commercial use of staff room and office.
She is taking over common property between the garage and car space with this structure. She is also building into the airspace above the car parking bay, blocking light from common property.
She got herself elected to Chair of the EC, and has a close working relationship with the young woman who is the Strata Manager. The strata seal was used on the DA, but the OC had not seen the DA plans, just a simplified diagram provided.
The DA was approved, and a bylaw is being drafted to give exclusive use of common property to the new owner. It’s significant. This bylaw will be voted on at the upcoming AGM, but no information has been given to owners yet about how much common property is involved. Neither have they been told they have the option of selling the land and airspace outright, or leasing it for an annual fee.
Some common property has already been built on, (grease trap), before the bylaw.
It’s a huge messy situation. I got a copy of the DA and showed the plans to the owners, and they are shocked.
Also, no-one, not even the Strata manager, knew about the fact that a grease trap was going to be built on common property before the event.
I’m now being harassed by shop tenant and owner, and threatened with legal action. I think it’s because I found out information that had been concealed.
Btw, based on last sales, land around here is worth around $10,000 per square metre.
Was I wrong to talk to other owners and give them information I had got from council and Dept Fair Trading, or just stupid to get involved? (Many of the owners are my friends, I’ve been here a while, I hate to see them taken advantage of.)
Sorry about the length of this post!
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01/05/2015 at 8:50 pm #23529
Boy, it sounds like someone does need to shake up the owners and explain about their interest in the common property. Well done so far!
02/05/2015 at 9:29 am #23530If I were in your shoes I would call a meeting of all your owners and explain to them how they are being ripped off. You don’t need to make it an official meeting but if you did, you might as well go the whole hog and sack the executive committee and its self-interested chair.
You should be able to stop the passage of the by-law by raising the 25 percent of the votes required, but even if you don’t, this owner would be guilty of a fraud against the minority.
There are well-established principles for the transfer of common property to private ownership, including the payment of funds to the Owners Corp, and this owner has ridden roughshod over them.
As an interim measure, I would put a motion to the executive committee to declare the chair of the committee open and elect a new chairman. They can do that, although they can’t remove her from the committee entirely (that requires a 75 percent vote at a general meeting).
I would put up another motion to invite the strata manager to a meeting to explain her actions.
Privately, I would talk to the strata manager and remind her that this owner is not likely to be in power much longer, so she has to decide whether she is working for the chairwoman or the owners corporation (with the clear implication that the wrong choice could mean she won’t be working for anyone soon).
I would also contact council and tell them that there are serious misgivings about the way the EC approval was given and that approval may be rescinded soon.
And get yourself elected to the chair, at least for as long as it takes to sort this mess out.
One final point, people run around threatening legal action all the time but rarely ever follow through. The best answer is “go ahead – and my lawyer will make sure you pay full costs when you lose!”
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.
02/05/2015 at 1:52 pm #23534mojo – a comprehensive and informative post as usual from Jimmy, and even though you’re a tenant you can, provided your strength of conviction is maintained, action most of what he’s suggested in order to guide those naïve Owners through the process.
They’re lucky to have you!
02/05/2015 at 8:53 pm #23542Thanks, PeterC, for your comment. It was encouraging for me.
JimmyT, your reply was incredibly helpful. Thank you so much for going through the issues, and most importantly, pointing to a very positive and effective way forward. The mess will be resolved, I’m now sure of this.
Oh, and thanks for the comment about responding to the legal threats. It made me smile, but if another one comes my way that’s exactly how I’ll respond. Ha. Bullies tend to back of if they see they fail to intimidate.
Whale, thanks for your additional comment. Yes, I’m just a tenant, but a resident in this community, and yes, I have strength in my convictions. As I said, many of the owners/residents here have become friends, and I hate to see them treated so badly, and potentially ripped of.
I’ve also searched and read similar topics in this forum, and found excellent information on this issue, but many other interesting things as well – it’s a great resource.
03/05/2015 at 10:34 am #23544Ooops. I just realised you are a tenant. Much of what I wrote still holds but as a far as official meetings and minutes go, you might have to get one of your owner friends to make you their proxy and even nominate you for election to the committee.
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.
03/05/2015 at 11:55 am #23547I’ve just had an owner nominate me as a proxy. She did this because she’s in a unit being adversely affected by the restaurant and I’ve spoken up for her. (She’s a determined woman but lacks confidence as English is not her first language.) Her unit is adversely affected by the restaurant due to the noise during the day, and deliveries at night (regularly at 3am) which are across common property right outside her bedroom window).
Also, her apartment will have light blocked by proposed garage extension.
I was delighted she had confidence in me to make me her proxy!
I’ve also been trying, through my agent, to be a proxy for my landlord, but no whisper has been heard from him for 30 years or so since he bought the apartment. The agent passed on the request, but has had no reply. I kind of don’t want to rock the boat here, because I have had no hassles from either during my tenancy. I may gently try again though…
A question, Jimmy. The SM has been emailing me and calling me telling me I have NO powers to investigate issues or to speak at meetings. She’s emphasised that ALL I can do is vote. I thought that if I had permission of a majority of owners, I’d be able to speak at a meeting if it was relevant?
As to being elected to the EC? Are you sure? I’m just a proxy and a tenant…
One other specific question: does an owner of a car space own the airspace above it – ie to build a second story structure over it on metal stilts that preserve original car space?
03/05/2015 at 12:33 pm #23549@Mojo_1 said:
A question, Jimmy. The SM has been emailing me and calling me telling me I have NO powers to investigate issues or to speak at meetings. She’s emphasised that ALL I can do is vote. I thought that if I had permission of a majority of owners, I’d be able to speak at a meeting if it was relevant?
I would tell your strata manager she needs to go back to strata school. You can investigate as much as you want and talk to owners in a private capacity.
Under strata law you are an “interested party” and can raise complaints on a variety of issues at Fair Trading and NCAT. These include matters covered by sections 138 (resolution of disputes and failure of Owners Corp to fulfil its obligations) and 158 (To make, amend or repeal by-law conferring exclusive rights or privileges over common property) – both of which are relevant in your position.
All owners are entitled to attend executive committee meetings or send proxies, however, they or their proxies can only speak if a majority of the committee agrees. This applies to owners as well as proxies. You can speak at a general meeting as a proxy of an owner.
As to being elected to the EC? Are you sure? I’m just a proxy and a tenant…
Anyone – even a non-owner, non-resident of the building – can be elected to the EC at an annual general meeting, or elected by the EC to fill a mid-term vacancy, provided they are nominated by an owner who is not standing for election his or herself. There are buildings where a long-term tenant has even been elected chairman.
One other specific question: does an owner of a car space own the airspace above it – ie to build a second story structure over it on metal stilts that preserve original car space?
I believe the standard airspace allowance is 2.4 metres above the floor (or thereabouts – but it’s what’s on the strata plan that counts). There is also the issue of the new structures potentially being attached to common property, which includes drilling bolts into the floor and adjoining walls, and who takes responsibility for their maintenance.
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.
03/05/2015 at 1:27 pm #23550Thank you, Jimmy, for such a comprehensive reply. I had no idea of many of these things, even though I’ve been trying to look into the relevant strata matters. Thanks also for the reference to NCAT. I only knew about Fair Trading.
I’m starting to thing the Strata Manager didn’t even go to strata kindy.
Btw I looked into a previous reference you made about “fraud against a minority”, also the related “fraud on a power”. I had NO idea about any of this! I think the two owners who have been/will be most affected because of the positions of their units directly on the ground outside the restaurant and next to the proposed garage extension will be interested, given that the EC all have units that are not affected by their positions on upper floors.
I’m hoping, though, that with the knowledge I’ve got from here and can share with the owners, the bullying, concealing, and generally trying to shut people up will stop, and things can be resolved civilly. “Knowledge is Power” is more than just a trite phrase!
03/05/2015 at 4:10 pm #23551Mojo – not wishing to complicate an already complicated issue, but with reference to the following comment by Jimmy T……
There is also the issue of the new structures potentially being attached to common property, which includes drilling bolts into the floor and adjoining walls, and who takes responsibility for their maintenance.
… here’s a little relevant knowledge.
Any additions or alterations to or the erecting of any structure on the Common Property such as the existing grease trap, the ducting, and the proposed extension above the carspace that will presumably be attached to the ground and possibly to the walls of the adjacent garage, and the granting of an exclusive use privilege each require a Special Resolution as opposed to an Ordinary Resolution at a General Meeting.
The Motions must be worded in that way (i.e. by stating that a special resolution is required), the significance being that for a Motion of that type to pass, ≥75% of those voting (including by proxy) need to vote in favour, with the percentage calculation being based on their collective lot units-of-entitlement (UOE) and the aggregate UOE of all those voting (i.e. a “poll vote”).
Additionally the Motion must be accompanied by the draft of a Special By-Law prepared at cost to the proponent to amongst other things make them (i.e. the current and all future Owners of the restaurant) and not the Owners Corporation (O/C) responsible for the on-going repair and maintenance of whatever it is that she’s adding to or erecting on its Common Property, and incorporate the basis upon which she’ll pay the O/C for the privilege of that exclusive-use.
That was why Jimmy commented that you’d need >25% voting against those Motions to defeat them, so you’d best do some more informing and/or lobbying to either obtain sufficient numbers of attendees or their proxies to achieve that threshold and to thereby defeat the Motions, at least until such time as Owners are better informed about what’s being put to them.
Section 65A of the Strata Schemes Management Act (SCMA) applies.
Finally (unless you need more info at a later time) any Owner, or you with the written authorisation of an Owner, can for a small fee inspect and if necessary make copies of the O/C’s records. That should both rattle the cage and be informative should you seek to inspect the Minutes of the General Meeting/s that approved of the Owner’s DA and Application to Sydney Water for the wastewater connection through the grease arrestor.
Section 108 of the SCMA applies.
31/05/2015 at 3:38 pm #23695Thank you, Whale, for this additional information. The matter is progressing as I and a few owners have been discussing the best way forward.
… and incorporate the basis upon which she’ll pay the O/C for the privilege of that exclusive-use.
Unfortunately, the owner who is gaining exclusive use of the common property is denying there is any requirement or strata precedent that she should pay anything to the other owners for the gaining of the common property, even though it will increase the value of her garage considerably. The garage/storeroom would currently be valued at around $100,000 – but after she has doubled the floor space and converted it into a commercial premises of office and staffroom, it could be worth around $400,000, assuming she puts it onto a separate title to the shop.
Note that it’s not just the actual amount of common property involved, which is relatively small – it’s her need to get this property to create the new overhead floor space.
Is there anything in the legislation that allows for a an annual fee to be charged for exclusive use – and if so, can it reflect the increased value her current garage will gain?
She is also denying that she needed OC approval to change its use from a garage to a commercial property that will house a business in the middle of the area that is basically residential. Is she correct?
01/06/2015 at 1:06 pm #23697Mojo – as I said before, the Owners in your Plan are lucky to have you!
In answer to your question about exclusive use attracting a fee, Division 4 of the NSW Strata Schemes Management Act (SCMA) prescribes how such a privilege may be obtained an Owner, and specifically Sect 53 talks to what a corresponding Special By-Law (SBL) may contain by way of conditions, and cites as an example one “requiring the payment of money by the owner or owners of the lot or lots concerned, at specified times or as determined by the owners corporation”.
Your Owner friends should really seek some relevant legal advice about the wording of a SBL that relates to any privilege of exclusive use that they, as an Owners Corporation (O/C) may consider, as such a SBL cannot be rescinded or amended without the prior written consent of the Lot Owner who’s at that time its beneficiary, and there needs to some basis to initially determine and regularly review the amount of any payment to the O/C for that privilege; such as a professional valuation and changes in property values respectively.
As for the change in use of the property involved, the Schedule 1 By-Law #19 of the SCMA states:
Change in use of lot to be notified
An occupier of a lot must notify the owners corporation if the occupier changes the existing use of the lot in a way that may affect the insurance premiums for the strata scheme (for example, if the change of use results in a hazardous activity being carried out on the lot, or results in the lot being used for commercial or industrial purposes rather than residential purposes).
So clearly, a prior notification to (and the implied prior consent of) the O/C WAS required, where it has the right to make a further condition requiring the Lot Owner (in this case) to meet the cost of any consequent increase in the O/C’s insurance premium.
There been some recent discussion HERE about strata-savy lawyers, and I again urge you to urge your Owner friends to contact one of those before matters progress too much further.
01/06/2015 at 8:23 pm #23699Thank you so much for your reply, Whale. At this point it looks like there will be an EGM with the sole purpose of fact finding – Q and A to the owner, in particular, looking at the limited information she provided to get approval for the extensions (ie no mention of gaining exclusive use of common property), with a view to the OC being able to decide for themselves whether she has concealed information to get strata approval, prior to providing different information to the council to get the DA approved.
I will definitely suggest to the OC that they need to get legal advice in relation to how to proceed.
One further question. In relation to the separate piece of common property she has already taken over and constructed a grease trap, the OC may decide to simply sell her this land. If they do, can they set the land sale price per square metre? On suggestion would be that it’s based on the value of the most recent sale in the apartment block, cost per sq/m in the price.
The owner who has built the grease trap may object to a price set by the OC, and may even get a private valuation (valuations are generally much less than appraisals) and insist on this.
To me, it seems that a procedure to get an agreed value is strongest if this takes place before the common property is built on. In such a case, the OC doesn’t HAVE to sell, and the potential purchaser doesn’t HAVE to buy.
Now, though, after the fact, I would think she should not be able to dictate the price. My thoughts are that are that she would have to accept a reasonable price for the land, even if it is a little on the high side. If she didn’t want to accept the price, she would have the option of removing the grease trap and restoring the common property.
She has a bylaw being prepared for the AGM by her lawyer, but this hasn’t happened yet and she hasn’t been granted exclusive use, as is her plan, but she’s pre-empted a successful vote.
A final question. A resolution was passed at the initial meeting to give her permission to build the garage extension and to prepare a bylaw to be voted on. However, if it can be proven that she concealed important information when she presented her plans to the OC, is there any scope to have the approval reversed by the OC, perhaps by a special resolution at a GM? Or, is the OC stuck with having the approval granted, even though there was deception. Note, though, she can’t go ahead with the garage extension without the exclusive use bylaw, but the OC may want to stop her extension plans completely and send her back to square one – needing approval for the plans themselves.
BTW I got a further email from the owner telling me that I was not permitted to speak at an EGM even with a proxy vote. Thanks to this forum (and Fair trading) I know that’s not true. She also informed me that as a tenant, I should direct all my concerns through my landlord’s agent, and should not be participating in any of the informal discussions some owners and I have been having about the situation. She’s stepped up her claims of harassment, and has now warned me that as well as her tenant the restaurant owner who previously threatened me with legal action, she herself may find it necessary to take legal action against me. As there is no basis of her claims of harassment, and, in fact, it’s she that has been emailing me, with me responding politely but firmly, I’m not bothered, and will respond according to the wise words of JimmyT in his previous post.
03/06/2015 at 9:14 am #23712Mojo – with regard to the O/C selling part of its Common Property to the Owner, that requires a special resolution with ≥75% voting in favour in order for the matter to pass, and so far as the price (as opposed to the value) is concerned, it’s really up to the Owners Corporation (O/C) to determine, provided the price has some basis that’s defensible.
One further string to the O/C’s bow may be that, to the best of my knowledge, the installation of a grease arrestor requires the prior consent of Sydney Water, by way of an Application for “Commercial Trade Waste Permit” by the Owner of the property. So a representative of the O/C should perhaps contact Sydney Water with the relevant details of the property (address & lot number) and ascertain who the “applicant” was, who it should have been assuming a Rep. of the O/C (such as the Strata Manager) didn’t sign an Application, the status of any Permit that’s been issued, and to who its been issued.
Finally, even if the original resolution for the Owner to alter the Common Property in the manner that you describe was properly made (i.e. by special resolution), then the O/C may at a later General Meeting vote in that same way to rescind its earlier decision. The Owner concerned could seek to challenge that decision on the basis that she’s already acted upon the original resolution, but in the circumstances that you’ve outlined with respect to this entire saga, I doubt such a challenge would succeed, particularly with the O/C obtaining good legal advice beforehand.
03/06/2015 at 5:31 pm #23713Thanks Whale. Again, very helpful information. I’ll certainly be recommending they get legal representation before things progress much further.
14/06/2015 at 6:54 pm #23735Hello again! There’s been another development.
An advisor from Lands and Property information studied the strata plan in relation to the airspace above the parking bay. She said that the normal airspace is usually set at 2.4m, but in this case, this was left off the strata plan, and she said this was unusual.
So, it appears that the owner of the parking bay owns the airspace above it.
Does this mean that if she wants to build a structure on the parking bay, she can do so without OC approval?
She still doesn’t own land between the parking bay and her garage structure, so at least her initial plan for one large development can’t go ahead without being granted exclusive use of the small piece of land between.
Therefore, her original DA can not be gone ahead with. I assume that she’d have to put in a new or amended DA, and I also assume that this would need the Strata Seal on it to show that she had OC approval. Or, is this not necessary with an amended rather than a completely new DA?
Basically, she bought a lot that includes a parking bay. Can she build on it as she owns the airspace, even if the OC decide that they don’t want her to because of the impact on other units?
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