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Remedial Contract- Strata Committee
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swoo
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14/05/2017 - 8:50 pm
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Hi

We have an EGM coming up on 22nd May (NSW) and on the Agenda is a motion to accept a Remedial Company to carry out work on defects (none of which are structural according to an engineers report). Also on the Agenda is a motion that the contract for the remedial company be reviewed and approved by the Strata Committee.

As I am about to have a $15,000 levy initially imposed on me how can I  vote if the terms of the contract are not disclosed to me prior to the EGM?  I would like  take it to a strata lawyer to review. I have asked the Secretary of the Strata Committee to email me the contract twice now but he has failed to do so.

Second, at a general information sharing evening of all owners on 3 May on this issue it was agreed by those present(8) I should get a quote from another remediation company . I called the company but they were only able to attend the premises last Wednesday. On Tuesday the Strata Manager emailed owners and stated the EGM would go ahead on the 22nd as requisitioned and said owners had to have their motions in by 9am Thursday morning or they would not be included on the Agenda. Of course this was impossible for me to achieve. The Strata Manager proposed the company that is on the Agenda.I have not received the quote yet but have been promised it by Wednesday this week. All too late to be included on the Agenda as an alternative quote. I feel as if the Strata Manager is orchestrating the desired outcome for his company and is not doing anything in the owners best interests. I have lost all faith in the Strata Committee as well as they seem to follow anything he says. 

What can I do to delay until Owners can look at an alternative quote. The work is estimated to be around $185,000 and is considered non structural as reported by engineers.

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JimmyT
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15/05/2017 - 8:56 am
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swoo said
What can I do to delay until Owners can look at an alternative quote. The work is estimated to be around $185,000 and is considered non structural as reported by engineers.  

Get a verbal quote from the alternative contractors then stand up at the meeting and propose an amendment to the strata manager's motion that:
a) Other quotes be considered - including yours.
b) alternative means of financing the project be considered, such as strata loans, rather than everyone having to pay large amounts of money up front.

Your problem is that everyone at the meeting has seen the agenda but not your alternative. So print up a very simple and non-abusive A4 or half-page that says something like the text below.

Hand that out to the other owners at the start of the meeting and then speak to it. Try to avoid allegations of corruption or preferential treatment - let your fellow owners come to any such conclusions themselves.

If you can find someone in the room prepared to support your case by asking relevant questions, so much the better. 

Another meeting will cost about $500 tops to arrange.  Your potential savings would have to be more than that to make this worthwhile.

If your alternative contractor can't provide even a guesstimate before the meeting, I wouldn't bother.  That would portray a worrying lack of motivation to me. 

Item XX on your agenda

As approved by the strata committee, I have received a quote from the highly reputable firm of [INSERT NAME] who will do the work for $xxx,xxx.

I also know there are ways of financing this work that will not involve huge one-off special levies which may cause hardship with some owners.

Please support the amendment I propose (below) so that we, the owners, can consider all options available to us and make an informed decision at a later date.

AMENDMENT:

I propose we consider an amendment to motion XX, that, before a final decision is made at a subsequent general meeting:

a) Other quotes be considered.
b) alternative means of financing the project be considered, such as strata loans, rather than everyone having to pay large amounts of money up front.

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swoo
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17/05/2017 - 3:41 pm
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Awesome.... Give it a try at least I will have tried. 

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swoo
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31/05/2017 - 8:45 pm
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Well I tried but there was an outcry by our Chairperson that we really need to get this done asap because the quotes won't hold for much longer and we've taken too long already. I printed out my request very respectfully and had in hand the written tender from the remedial company I called that day. It was very professional and while slightly cheaper the argument from our secretary was that unless it was a lot cheaper there was no point in looking at it even though they recommended different approaches and types of paint on various surfaces compared to the company on the agenda. 

The Secretary also declared out loud they had plenty of time to get the quote in and hadn't. The information day was on the 12 April and I said the Principal would not return until a week later then I expect he would look at the Scope of works and make visit to our complex afterwards which would mean realistically the first week of May. The Strata Manager who chaired the EGM gave Notice of the EGM on 4 May. He also led the information day meeting. There was no way I could have presented the OC with the alternate company in time. Hence the company listed on the agenda was accepted. The motion was to accept the quote for company XXX to undertake the remedial work and ....."furthermore the Strata Committee will consider the contract" not the OC. I wrote and amendment because the committee is restricted to forming resolutions for amounts of $3000 or less.Also under the resolution regarding restrictions for the SC there is an additional paragraph which states ....."Furthermore a resolution authorising works at an estimated or quoted cost also authorises the resultant cost(invoice)" Hence the Strata Manager stated the SC could resolve to accept the contract. I argued the word "consider' means just that and cannot have any other outcome than a resolution that the contract was considered. My amendment passed as I also argued there is a higher law governing the rights of consumers who are entitled to have full disclosure of all of the financial facts available so the OC by right should also consider the contract. 

The numbers were against the few  who are struggling to meet the levy. Of the 12 Units 2 are under a 99 year lease. One of these leaseholders never pays his levy on time and is the original property developer. He was in arrears at the EGM so his vote wasn't counted leaving 11 votes.

The other leaseholder was in hospital and I had her proxy which directed me to vote NO on the remedial works going ahead. One owner was overseas and two others not in attendance but all gave proxies. There were 3 SC members in attendance but with the proxies given to the Strata Manager they had 5 votes.Two of the SC wives held the other two proxies so the numbers were in their favour which they used to push through everything they wanted. I find the attitude of those who chose not to attend and did not direct on their proxy how they wished to vote on each motion is appalling. Also they do not hear the amendments I proposed so the proxy holders who support the SC especially the wives voted down my amendment to delay the $65,000 rendering work until a later date because they argued it will cost us more . I had a quote from a rendering company which I gave to the Secretary for $39,000. He ridiculed it at the EGM. All of these works are cosmetic.

What happens now? Do we have to call a meeting to impose a levy? This will pass as they will have the numbers again. If I receive a Levy notice for $15,000 can I refuse to pay it as I don't have it. I have 2 possibly 3 others who will be in a similar situation so that will be $45,000 short. Can the OC enter into a contract if the money is "not in the bank" What are the ramifications here? Is there anything  else we can try?

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Puddn
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06/06/2017 - 4:13 pm
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If the cost of the work has not been already been allowed for in the existing budget, then yes another general meeting will need to be called to determine how the work is to be paid for - in which case you should submit motions for alternate fund-raising methods to be considered. For example an increase in levy over several months rather than a one-off payment? Perhaps a strata loan?

In any case, if the work is approved and the majority of owners agree on how to fund the cost - yes you will have to contribute eventually - but there are laws and process that allow anyone to negotiate terms of 'debt' payments.

I doubt you can be forced into financial extremis by an owners corporation undertaking non-urgent works.

If this cost was imposed in a way unrealistic to your financial situation, then you could mediate your 'debt' payment terms and drag time out considerably. So it is in the best interests of all owners to agree to a sensible way of raising funds else others will have to pay more in the short-term whilst you and others take time to pay off 'debt'.

By the way, I thought that only urgent work (ie. structural or that required to meet fire regulatory compliance or similar.) can be raised by 'special levy' with non-urgent work being approved at AGM.

You may have a legal argument against a 'special levy'. Others on this forum may have more information on that. 

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Paul Morton
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06/06/2017 - 5:28 pm
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Hi Swoo
The owners could consider a Lannock Strata Loan – this would avoid having to pay large amounts of money upfront but still allow everyone to get the benefit of the works being completed now.  Please click on the banner ad at the top of the page to check out our website (www.lannock.com.au) or call us on 1300 85 15 85.
Regards
Paul Morton

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swoo
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07/08/2017 - 9:55 pm
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Hi Again

Well an EGM is scheduled for 16 August. In the meantime a couple of owners have sought another quote. This is a  large national company who has carried out remedial work on several well known Strata Companies. The report based on the same 'scope of works' clearly states none of the work is structural and could be done in stages. Cost is $67,000 inc GST ie a fixed cost. This compares to $178,000 from the company the OC has accepted.

I 'required' a rescission motion  be included on the Agenda and another motion to accept the quote for the less costly option. The Strata Manager has placed these motions last. Motion 2 is for our strata to Register for GST and Motion 3 is to raise a Special Levy of $178,000. Of course once this is passed there is no point in even considering the alternate quote as it will become irrelevant.

I will request the last motion be considered before Motion 2 re GST as the cost  of $68,000 + Levies of $65,000 for 12 Residents is less than the $150,000 required to register for GST. This would also avoid GST on all Levies Even though we would be able to claim the GST on the cheaper works we still need to discuss the option and this cannot occur if we don't even consider my motion.

The Strata Manager has manipulated the Agenda so our motion will become redundant. Another resident has given his proxy to another large remedial expert who will attend the meeting however he may not even get the opportunity to support our motion. We will  seek mediation if all fails.

The Special Levy has to be paid along with the ordinary Levy this quarter.

This is very stressful...

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