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Strata Discrepancy. Opinions Please

Discussion in 'General Property Chat' started by Inov8ive, 23rd Nov, 2015.

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  1. Inov8ive

    Inov8ive Well-Known Member

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    Hi Guys, I would really love some opinions and/or advice on how to handle a situation with a body corporate on a property I have recently acquired in the last 12 months. (I promptly joined the body corporate). There are 24 units in total in the complex, 12 townhouses and 12 apartments. I own one of the townhomes and the other two members of the body corporate are apartment owners. After going through the strata reports I have noticed that over the last 5 years almost 90% of the sinking fund has been spent on the apartments and a lot of it has been upgrades as opposed to repairs. Since I have been on the board I can definitely see why this is. One of the body corporate members has just sent around some quotes to have new awnings put up out the front of the apartment complex at a cost of 5k which will only benefit the apartment owners and it just seems like us town house owners are getting the raw end of the deal here and I dont know how to handle this situation. No sure on the legal basis either. The townhouse owners pay 20% more than the unit owners as well so it just seems a bit unfair.
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Sounds like the bc may be too small/lack of interest to represent the best interests of owners.

    Why only 3? I have usually seen/expect 5 on this size complex. Secretary, treasurer, chairbod & 2 non-executive members.
     
  3. Inov8ive

    Inov8ive Well-Known Member

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    You are spot on, it is a tiny committee and there is no interest from the other owners and these two have had a great run with a completely one sided spending regime.
     
  4. D.T.

    D.T. Adelaide Property Manager Business Member

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    You automatically did by purchasing it, as did all the other unit owners :)

    Sinking fund is meant to be for upgrades and major works. Administrative fund is meant to be for ongoing maintenance. Does it outline in last annual general meeting where this is

    Write to the other owners, of both townhouses and apartments to raise your concerns. Invite them to meetings so that stuff can be voted on to be actioned in a way that everyone agrees upon.

    It's the body corp's responsibility (via the Strata Titles Act) to maintain the complex and spend funds in a way that benefits all members. You can threaten to take the matter to magistrates court (usually threatening is enough) but judge will give them a slapping.
     
    Last edited: 23rd Nov, 2015
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  5. Scott No Mates

    Scott No Mates Well-Known Member

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    A quorum is also necessary for the agm - do the owners show up when they vote for the executive committee?
     
  6. Chilliblue

    Chilliblue Well-Known Member

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    Hate to be bearer of bad news. If no one else is interested in following this up then there is little that you can do.

    As suggested above, total up and detail the monies spent and start with those lot owners who have lost the most and see if you can get an alliance happening.
     
  7. Inov8ive

    Inov8ive Well-Known Member

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    I went to the most recent meeting and it was just the two said owners and myself that were present and they did mention that nobody else has ever been present and that they pretty much handle everything that ever happens there.
     
  8. Inov8ive

    Inov8ive Well-Known Member

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    Thanks for that. I am not really too concerned for righting past wrongs but want to say something about this new request to spend money on the units only. Can I then request for an equal amount to spent on the Town houses or is this just the way it goes.
     
  9. melbournian

    melbournian Well-Known Member

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    In Victoria if u have grievances u can bring it to the owner Corp manager and if nothing comes out it register it as a complaint and dispute.

    A lot of owner Corp do a lot of things owner can have issues for e.g stay in building manager subsidises by the owners Corp fees which leases the apartment of the previous developer
     
  10. Chilliblue

    Chilliblue Well-Known Member

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    It might be good to seek independent advise from a specialist like Block Strata (Michael Teys) and have a forward plan
     
  11. dabbler

    dabbler Well-Known Member

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    There is nothing your going to do about the past, but you can help direct the future, if you want to invest the time and effort.

    Frankly, if you were ok with th e fees going in and the look of maintenance levels, why are you so worried ? the other lots with smaller fees have smaller land interest, so sounds normal, if it is an IP, your going to sink a lot of energy into this, go to the main meetings and vote on things, get on exec committee if you feel inclined so there are more decision makers.

    There is a whole forum just on strata life you know.....
     
  12. neK

    neK Well-Known Member

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    hehe strata.... its crap like this that makes me not want to buy in strata... unless i can have 50.1% voting rights :)
     
  13. MattA

    MattA Well-Known Member

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    Just putting it out there...

    Previous to you joining the exec, there was only two active exec members... is it possible that these guys aren't out to self service there apartments at all, but rather, just out to do the best they can ?

    Using the above as an example, a resident sends a request for a new awning to the strata manager who then sends it to the exec members. They look at each other, say well a new awning probably would be a benefit to the apartment owners, the sinking fund has the money, we can't really see a reason not to at least look into this, so they get the quotes and then send them out. Nobody replies with any objections, thus 'nobody must be against the idea', and the two exec members approve the works.

    Going forward, my advice to you would be, yes, defiantly become an active member of the exec (as you are progressing towards), just stay a little bit open minded. If the above situation is what has been occurring, chances are that the two active exec members will be very pleased to have some more input into the decision making. The last thing that you want to do is to off-side them before you even start by having the attitude that they are out to serve themselves only and need to be stopped !
     
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  14. dabbler

    dabbler Well-Known Member

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    For what purpose ? Stop spending on non required things, everyone pays for the spending and most people are not clued up on this, they think strata is a government fund or something !
    Not likely I say, usually is the way it looks.

    Re other execs, as said, do not think so myself, I think he is going to be off side just for joining unless he plays the game, either way, who cares, you don't sign up for this to gain new friends, it is business & most are not good at it or able to be objective.
     
  15. neK

    neK Well-Known Member

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    Just remember how your actions here can affect your other half.
    I sold out of the unit me and my wife owned due to strata.

    We were facing the same issue you were, there were a few main people who called all the shots. In the end my wife didn't want to face the neighbours (meanwhile I was of the attitude - who cares, bring it on!).

    For her sanity, we sold and bought a house :)
     
  16. dabbler

    dabbler Well-Known Member

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    That's true,

    The main problems is that you live with x amount of other people as direct neighbors, where in a house you generally only have 3 or sometimes less with mainly fences to argue over, so chances of getting a bad neighbor are less, but it does happen with houses too.
     
  17. Russ

    Russ Well-Known Member

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    I assume your Scheme is self-managed based on having 2 Owners running the show, in which case it's not uncommon for legal requirements not to be strictly adhered to.

    In NSW the legislation imposes a higher burden on upgrades than on regular repairs and maintenance (R&M). s62 of SSMA requires an Owners Corporation (OC) to repair and maintain Common Property, so these Committee members might have been benevolently trying to do the right thing - IF that is what the works were - repairs and maintenance - albeit located in the part of the Scheme where they live.

    Additions and Alternation to Common Property, however, are dealt with under s65A of the SSMA and require a Special Resolution (basically 75% approval) in general meeting.

    The obligation to repair and maintain under s62 does not make allowance for what people think of as "theirs" (apartments) or "ours" (townhouses) (or vice versa) because the actual property to be maintained belongs to the Owners Corporation. Although it is located at the townhouses or apartments area, it is irrelevant in that the property simply must be maintained.

    In your situation, I would pay attention to the condition of the townhouses, because it may be that the existing Committee members attended to R&M for the apartments because they were aware of needs. Your argument to spend OC money on townhouses might be readily accepted, now that you are there to 'lobby' for it. It's not that the Committee should have neglected half of the Scheme in the past, but what happened has happened.

    Upgrades are a whole different story. They should be approved in accordance with s65A. If they've been spending OC money on discretionary works that suit themselves, that isn't cool.

    You don't have a legal right to demand or expect equal expenditure across the Scheme, it just doesn't work like that. The difference in levy contributions also isn't relevant. It's not that I don't sympathise, but there's no point in chasing the argument that won't support the result you're after.

    However, properly put as a Special Resolution at General Meeting a reasonable Owner should recognise the equitable treatment (apartments vs townhouses) as desirable, and you would hope to have a good chance of getting such expenditure approved. If the Committee members were approving upgrades and additions without General Meeting (Special Resolution) approval in the past, that was wrong - but if it was an honest mistake you should hope for them to morally support making amends. Do it properly going forward.

    Depending on the nature of the works, it might also improve aesthetic consistency of the Scheme. That's not a strict legal requirement but is desirable and it dovetails in with Lot Owners' requirement not to change the appearance of their Lots so as to be out of keeping with the rest of the Scheme - assuming standard by-law 17 (or equivalent) applies in your scheme.

    Above is a technical analysis of your situation, but of course - you still have to live with each other, so it's good to start by trying to get agreement to proceed in a way that is both legally correct and morally valid - by which I mean being fair to both apartments and townhouses.
     
    Last edited: 26th Nov, 2015