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Raising funds to defend NCAT action
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dingo
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23/11/2016 - 9:58 am
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If a Lot owner applies for Mediation and/or NCAT orders and the OC want to send the Strata Manager (extra cost as per schedule B fees ) and/or a Lawyer what is the procedure that the Owners Corporation has to undertake to approve the extra expense. Does the OC require a resolution of the Owners Corporation to collect a special levy to pay for the expenses of the Strata managers Schedule B fees and/or lawyer or can the expenses be taken out of the admin fund if approved by the EC.

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JimmyT
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23/11/2016 - 11:23 am
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We may as well look at the laws that are coming in next week which basically say spending on legal fees must be approved at a general meeting unless they are less than $15,000 (see Section 103 (2) (b) of the 2015 Act, and section 26 (1) of the regulation, both below).

Fees should come from the Admin fund but it can borrow from the Sinking Fund provided it pays the money back (within a few months, I think).  If the money isn't in either fund a special levy can be raised.

Neither the decision to spend money on legal fees nor the raising of a special levy require a special resolution.  A simple majority at a general meeting should do it.

I don't think there has to be any specific decision required to spend OC money on strata management schedule B fees. They are part of the contract with the strata manager and a simple decision to request their involvement is all that's required. They are management and not legal fees.

103 Legal services to be approved by general meeting

(1) An owners corporation or strata committee of an owners corporation must not obtain legal services for which any payment may be required unless a resolution approving the obtaining of those services is passed at a general meeting of the owners corporation.

(2) An owners corporation or strata committee may obtain legal services without obtaining approval under this section if:

(a) it is of the opinion that urgent action is necessary to protect the interests of the owners corporation, and

(b) the cost of the legal services does not exceed $10,000 or another amount prescribed by the regulations for the purposes of this subsection.

(3) Approval under this section is not required for the following:

(a) to obtain legal advice before commencing legal action,
(b) to take legal action to recover unpaid contributions, interest on unpaid contributions or related expenses,
(c) to take any other legal action prescribed by the regulations for the purposes of this section.

(4) A failure by an owners corporation or the strata committee of an owners corporation to obtain an approval under this section does not affect the validity of any proceedings or other legal action taken by the owners corporation.

(5) In this Division: legal services includes obtaining legal advice and taking legal action.

 

Strata Schemes Management Regulation 2016 - Part 3 Financial management

26 Approval for legal services costs

(1) The amount of $15,000 is prescribed for the purposes of section 103 (2) (b) of the Act.

(2) For the purposes of section 103 of the Act, approval is not required under that section to the obtaining of legal services in relation to a matter that is not urgent if the cost of the legal services does not exceed $3,000.

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g
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23/11/2016 - 8:54 pm
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And does the "lot owner" who is challenging the Owner's Corp have to pay their share? Or do the other owners collectively have to raise a small levy to so that the challenging owner isn't having any of their contributions used? And does this change depending on the outcome?

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JimmyT
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23/11/2016 - 11:26 pm
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Yes, it depends on the outcome.  Let me put this another way, under the new laws, if a Lot Owner takes the Owners Corp (as represented by the strata committee) to the Tribunal or a court of law and loses, and costs are awarded against them, then they pay the costs and the Owners Corp, meaning the other owners, pay nothing.

But if an owner wins a case against the owners corp and costs are awarded against the OC, the owners corp may have to, in the case of court action (Section 90, below), and must, in the case of a tribunal (Section 104), raise a special levy that excludes the owner who has won the case against them.

You can't ask the owners corporation to pay part of the costs of someone who has unsuccessfully brought a case against them.  Similarly, you can't expect an owner who has won a case against the owners corp to pay a share of the costs of fighting him or herself.

As for strata management fees, the 'winning' owner can ask for costs to be attributed to the owners corp so that they don't have to pay their share, and they might include schedule B fees.  But it's not in the interests of good management for the cost of every dispute to be automatically apportioned according to who is on which side.

 

90 Contributions for legal costs awarded in proceedings between owners and owners corporation
(1) This section applies to proceedings brought by one or more owners of lots against an owners corporation or by an owners corporation against one or more owners of lots (including one or more owners joined in third party proceedings).
(2) The court may order in the proceedings that any money (including costs) payable by an owners corporation under an order made in the proceedings must be paid from contributions levied only in relation to the lots and in the proportions that are specified in the order.
(3) The owners corporation must, for the purpose of paying the money ordered to be paid by it, levy contributions in accordance with the terms of the order and must pay the money out of the contributions paid in accordance with that levy.
(4) This Division (other than provisions relating to the amount of contributions) applies to and in respect of contributions levied under this section in the same way as it applies to other contributions levied under this Division. 

 

104 Restrictions on payment of expenses incurred in Tribunal proceedings
(1) An owners corporation cannot, in respect of its costs and expenses in proceedings brought by or against it for an order by the Tribunal, levy a contribution on another party who is successful in the proceedings.
(2) An owners corporation that is unsuccessful in proceedings brought by or against it for an order by the Tribunal cannot pay any part of its costs and expenses in the proceedings from its administrative fund or capital works fund, but may make a levy for the purpose.
(3) In this section, a reference to proceedings includes a reference to proceedings on appeal from the Tribunal.

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Julio
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28/01/2017 - 9:13 am
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We have commenced an action in NCAT under S.232 against a harassment-prone, chain-smoking and noise-addicted neighbour. His intimate and longstanding ties with the corrupt ruling elite in management and the OC have ensured his immunity to date. Both owner and management/OC have refused Fair Trading mediation in separate applications. Their conjoint intent seems obvious: to ruin those who expose their illegalities, which are multiple, and intimidate other decent owners and tenants into silence.

Management has now persuaded NCAT to allow it to join the serial-breacher neighbour's defence, and overruled our opposition to legal representation. Whilst we have a strong and well-documented case against both parties and are confident of a reasonable outcome on a level playing field, we are also pensioners and severely-limited in economic terms. So much for NCAT's cynical claims to be "accessible, economical and effective".

Can anyone suggest a good legal firm who might consider taking on the case on either a pro-bono or "no win, no fee" basis?

Many thanks.

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Faraway girl
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30/01/2017 - 9:28 am
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I absolutely agree with Julio ( above). Many of our significant issues could be solved with a nice strongly worded letter from a solicitor . We attempted to arrange this and were amazed at what it would cost us. Like Julio we are also pensioners and severely limited financially so we're unable to engage the Strata solicitors.   Accessibility depends on your ability to engage expertise it seems and in the meantime we have to live with the stress of knowing that any day an abusive email will be circulated to the other three owners in this 14 unit Strata Scheme accusing us of a range of things like harrassing his wife ( when we pass her on the stairs) trespassing ( when we put a letter under his door asking to inspect the records in accordance with the Act) and the old one about owing him over $1000 for water when he chose to install just a single meter and we have paid our contributions on the day they are due.  

I hope a good Strata legal firm reads your request Julio and offers to do some pro bono work for you to assist you in this issue. Keep us informed. Good luck. 

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