Urgent repairs

Jeff said:

Hi,

I'm new to this forum and I need some help. I am one of 3 on the EC and we are allowed to spend upto $1,500 on repairs to common property without the approval of the OC. Does the EC have to have a meeting (which the rules state takes a minimum of 3 days) before we can go ahead with an urgent repair to common property? What would happen if the repairs are over our limit (say $3000) Do we have to convene an EGM before we go ahead with the repairs? I am concerned that our hands are tied while all this time goes by.

 

Jeff

We had a situation where urgent work was required. There was enough money in the bank and if we did not do the work and a certain wall collapsed we might have been responsible for significant damage to private property or even killing someone. We (the EC) decided to get on with it. If, in the fullness of time, it turned out that we did not do it quite right, it could be fixed. Once work started and we were getting closer to a general meeting a couple of owners took exception to the work being done at OC expense. We got legal advice with a series of questions such as “What liability might the OC have been exposed to if we had not acted immediately on learning of a dangerous situation?”, and so on. The answers were very sobering! If your work is required on safety grounds I would get on with it to avoid serious liabilities. If it would save the OC some significant money to do some repairs now before it gets worse, but it is not a safety issue, I would make sure that the potential savings were clearly documented if it is not obvious and still get on with it. If neither of these apply, why not wait for the approval? Why does the EC have that money limit? Is that because you only have a maintenance budget of that amount approved at the previous AGM? I think the EC would have some latitude to go a bit over budget on some items so long as it is not grossly different from what was budgeted. I am a treasurer and some budget items will always be less predictable than others. I don't worry too much if a few items are a bit over or under if the expenses are justifiable, we have plenty in the bank in reserve and overall the budget is not grossly out. 

It seems clear to me that the the OC, as represented by the Executive Committee, has a lot of leeway when it comes to organising emergency repairs. The general thrust of the NSW Strata Act (quoted below) is that protection and maintenance of common property is more important than strict adherence to procedure.

As long as everyone is acting openly and reasonably and in good faith, you need to do what you need to do.  That's one of the reasons ECs have insurance … to protect them in case they make a mistake despite the best intentions.

The OCs responsibility to maintian and repair Common Property is paramount, superseding even court action that might be underway regarding repairs and defect rectification. You just need to let eveyone know what needs to be done and then either get on with it or have a very good reason for not doing so.

As you will see from these sections of the Act below, even if the cost of the repairs SHOULD be borne by a lot owner, the OC is empowered to go ahead and make the repairs, regardless.

Seriously, what's the worst that can happen if you jump the gun and don't get the support of the owners after the event? Nobody goes to jail or even gets fined for making a bad decsision in strata.

62What are the duties of an owners corporation to maintain and repair property?

(1)  An owners corporation must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.

(2)  An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.

(3)  This clause does not apply to a particular item of property if the owners corporation determines by special resolution that:

(a)  it is inappropriate to maintain, renew, replace or repair the property, and

(b)  its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.

Note. The decision of an owners corporation under subsection (3) may be reviewed by an Adjudicator (see section 138).

63What power does an owners corporation have to carry out work and recover costs?

(1) Application of section
This section applies if a person who is required to carry out work as referred to in this section fails to carry out the work.

(2) Work required by public authority
An owners corporation may carry out work that is required to be carried out by an owner of a lot under a notice served on the owner by a public authority and may recover the cost of carrying out the work from the owner or any person who, after the work is carried out, becomes the owner.

(3) Work required to be carried out under term or condition of by-law
An owners corporation may carry out work that is required to be carried out by a person who is the owner, mortgagee or covenant chargee in possession, lessee (or, in the case of a leasehold strata scheme, sublessee) or occupier of a lot under a term or condition of a by-law and may recover the cost of carrying out the work from that person or any person who, after the work is carried out, becomes the owner of that lot.

(4) Work that is duty of owner or occupier to carry out
An owners corporation may carry out work that is required to be carried out by a person who is the owner, mortgagee or covenant chargee in possession, lessee (or, in the case of a leasehold strata scheme, sublessee) or occupier of a lot in order to remedy a breach of a duty imposed by Chapter 4 and may recover the cost of the work from that person.

(5) Work required to be carried out under order
An owners corporation may carry out work required to be carried out under an order made under this Act and may recover the cost of carrying out the work from the person against whom the order was made.

(6) Recovery of costs as a debt
The costs incurred by an owners corporation in carrying out any work referred to in this section may be recovered by the owners corporation as a debt.

64What power does an owners corporation have to carry out work at its own expense?

(1)  An owners corporation may carry out such work as is necessary to rectify any of the following defects:

(a)  any structural defect in any part of a building comprised in a lot that affects or is likely to affect the support or shelter provided by that lot for another lot in the building or the common property,

(b)  any defect in any pipe, wire, cable or duct that provides, or through which passes, any water, sewage, drainage, gas, electricity, garbage, artificially heated or cooled air, heating oil or other service (including telephone, radio or television services) within a lot.

(2)  An owners corporation may carry out work referred to in this section at its own expense if the cost of the work cannot be recovered from some other person.

The following restrictions apply only to buildings of 100 lots or more but they are relevant to

 

Division 3Restrictions on spending

80ALimit on spending by executive committees of large strata schemes

(1)  If a specific amount has been determined as referred to in section 75 (5) for expenditure on any item or matter, the executive committee of the owners corporation concerned must not, in the period until the annual general meeting next occurring after the determination was made, spend on the item or matter an amount greater than that determined amount for expenditure on the item or matter plus 10 per cent.

(2)  The owners corporation of a large strata scheme may by resolution at a general meeting remove the limitation imposed by subsection (1) generally or in relation to any particular item or matter.

80BQuotations to be obtained for certain items of expenditure by large strata schemes

An owners corporation of a large strata scheme must obtain at least 2 quotations in relation to proposed expenditure in respect of any one item or matter if the proposed expenditure will exceed an amount prescribed by the regulations for the purposes of this section.

80CExceptions in relation to emergencies

Sections 80A (1) and 80B do not apply to expenditure undertaken for emergency purposes, including, for example, expenditure to remedy any of the following:

(a)  burst or blocked water or sewerage pipes,

(b)  serious damage caused by fire or by storm or any other natural disaster,

(c)  unexpected electrical or security system failure,

(d)  glass breakages that affect the security of any building in the strata scheme or could result in damage to the inside of any such building.