Treasurer bought a Common Property

Thank you Jimmy for your answer, highly appreciated.

In situation like this, when you have only 1 person at the
AGM (not including strata manager), does this constitute a quorum, or does the fact that he had proxies means that’s good enough?

 I suppose undervaluation of the property would fall under the “fraud of the minority” as the realistic market price for a property like this would be at least $300,000.
Because most owners don’t really bother coming to AGMs as they are investors, I find it amazing that an individual can use this to his advantage and acquire a property in a simple manner like this. So, for the argument sake there are 2 or 3 owners that are the only people that go to AGMs. What is stopping them from selling all the common properties in the building to themselves for $1.00 and then the next day selling it for $1 million. Is it only the “fraud of minority” that offers some
protection to other owners, or are some other regulations which relate to maybe building safety or something similar.

I suppose once the property is sold, most owners will not want to get into court cases and spend money on a very uncertain outcome.  

Thanks

Hi everyone and thanks for your comments, I really
appreciate it. I am completely new to strata so this is a great help. Here is what I think about all of this:

 1) By-Laws and Special Resolution: this is something that I need to investigate as I am not sure at this stage. I need to find out if this was done by granting exclusive use of the property or was this Section 110 situation, transfer to another party.

 2) Based on some research that I have been doing over the
past few days, for any motion to be voted on, there must be a quorum of 25% of owners eligible to vote (attend in person), regardless of the proxies.  A motion or special resolution to be passed has to have UNANIMOUS resolution requiring 100% majority vote (e.g. the sale of common property). This AGM was attended only by 1 person plus the strata manager, so taking this into concern, already there is an issue here.  Why didn’t the strata manager stop this resolution from being passed if there was no quorum?

3) On top of this, using proxies to vote on a matter which will bring financial benefit to a proxy holder is something that could be classified as “fraud on a power” (possibly).

4) Another thing is the adequacy of compensation as this renovated common property (now used as commercial property) can now be sold for minimum $300k (or at the time probably $250k), and yet a compensation of only $12k was made, and we still don’t know where it went, but we will push the strata manager for an answer. So, taking the valuation formula into concern ”improved value and deducting the cost of any improvements the person has done to it – the difference should be paid to the owners corporation” owners corporation should have definitely received more than $12k.

5) Strata Plan – 3 new owners which bought the properties in the last 2 years were all issued a strata plan which has these 2 common properties listed, yet this common property “transaction” took place in 2007. I suppose between 2007 and 2010 a new updated strata plan
had to be issued. This might be a naive question, but is the strata management company responsible for updating the building’s strata plan or the owners corporation? Who has the legal obligation for doing this? As i recall, the strata plan that I received was given to me by the solicitor who employed the services of a company that did the building check and strata report. Nowhere in the report, this transaction, new by-laws and changes to the strata plan are mentioned whatsoever.

6) Also, air conditioning equipment/machines was in one the rooms, and this has been removed and no-one knows what happened to it. As a result, our ventilation in the security parking under the building doesn’t work, so we have these air conditioners and big metal ventilation silver pipes which can’t be used anymore as they are not connected to the plant room anymore.

I suppose what Urban Spacemen said that this can’t be sorted out without a couple of lawyers getting a bit richer is quite true and none of us want to get involved in lengthy and costly court cases, etc.

In a way we are thinking what happened in the past happened, let’s turn another page and start all over again. If I can prove that strata management company knew that this transaction is “highly suspicious” (don’t want to use the word illegal) and they did nothing about it, then I have a strong case to argue to other owners that it’s
time to change the strata company and at the same time adjust the unit of entitlements as this individual is now paying less in quarterly levies than other commercial properties on the same floor, even though he has more m2 than others which this is another weird thing.

Thanks everyone for your comments.

It's a big company with branches all over the country, so if you can't trust them, who can you trust then 🙂 crazy…..