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Ours is a warehouse conversion of around 100 apartments, built around 100 years ago and converted about 25 years ago.
We have only recently moved in and are not sure of all the facts. However, we are working on the theory that if there is barking, it is probably a dog and we hear barking (but only from Approved Pets).
Over the last two or three years, major capital works have been undertaken. There was not enough money in the Sinking Fund to cover this and a loan was taken out. This resulted in a substantial increase in Strata Levies over the subsequent 10 years.
Now, further capital expenditure has been identified and a Special Levy has been suggested. This is to be discussed at a General Meeting.
It seems as if the Committee did not have, or did not update in a timely fashion, a 10-year capital works fund plan.
Is there any way that the plan can be audited and, if it was inadequate, is there any recourse for owners if the Committee can be shown to be incompetent?
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There is generally quite a lot of protection for committee members acting in good faith. It is up to the owners generally through general meetings to satisfy themselves that the owners corporation has adequate maintenance plans. If the committee is incompetent, the only fix is for other owners to volunteer and do a better job.
Further to what Sir Humphrey wrote, to find committee members individually or collectively culpable for bad decisions, you would have to prove that they were given good advice that they chose to ignore, or that they deliberately decided to avoid decisions that they knew were bad but would save money.
In other words, in the absence of a smoking gun (or smouldering email) you have almost zero chance of proving this, even if it was the case.
Not sure about your reference to barking dogs – was it a literal aside or an allusion to the kind of assumptions you are prepared to make?
By the way, only the new building work in apartment conversions is covered by such warranties as may exist. The remaining original fabric of the building is another matter entirely, and it’s not unusual for problems to appear unexpectedly as the old and new parts of the building settle into each other.
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.
The obligation of the OC is to create a 10 year capital works plan. There is no definition of what it needs to cover, so the plan quality may be good or bad.
The OC can review it at 5 year intervals.BUT the contributions to the sinking fund (which are to support the capital works plan) are voted at each AGM. There is no requirement that the sinking fund levies match the capital works plan. The amount levied can vary depending the desires of the owners.
I personally believe OC should maintain a healthy sinking fund reflecting the capital works plan. There is nothing worse than being presented with a special levy. Particularly as payment of it is not optional and may come at a difficult time for the owner.
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