PROXY under a Liquidator | Proxies - blind faith or good sense? | Flat Chat Forum: Your Questions Answered




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PROXY under a Liquidator
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swoo
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15/08/2017 - 8:47 pm
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Hi 

A tenant in our Strata of 12 in NSW wishes to vote at an upcoming EGM. The owner of the Lot  is a company which is in receivership and has a manager appointed to run the receivership company.

The tenant is responsible for all expenses associated with the Lot including Levies Special Levies  insurances etc. He asked the Liquidator's manager to give a Proxy to me (as he will not be there) so I can vote on his behalf at the next EGM as a Special Levy for cosmetic work is to be voted upon and he wants me to vote against the motion.

The liquidator has given the Proxy to the Strata Manager not to me as requested by the tenant. This is despite the fact that the liquidator has given a Proxy to another tenant in our strata . This seems highly unfair as it is NOT the Strata manager who will have to pay the Special Levy. 

The Strata Manager is also chairing the meeting. Can he hold only ONE Proxy?

Is there any recourse as the tenant will be financially disadvantaged and the Levy is substantial. He can't  sell to raise money as he does not own the unit.

Thoughts??

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scotlandx
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15/08/2017 - 11:20 pm
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That is just weird, what kind of tenancy agreement makes the tenant responsible for levies? The levies are the owner's, and the owner exercises rights as the owner by virtue of paying those levies (usually).

If I were the tenant I would contact the tenants union to ask them what they think of that kind of arrangement.

The strata manager can only hold one proxy.

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JimmyT
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15/08/2017 - 11:54 pm
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I agree with Scottie. If the tenant is paying levies, they need to be part of the rent (so special levies would not apply).  Tenants Union and Fair Trading would be my next port of call.

And the strata manager can only carry one proxy (and can't vote on matters relating to their contract).

The levies issue is between the Owners Corp and the liquidator.  The tenant shouldn't even be remotely involved.

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16/08/2017 - 9:04 am
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I have read correspondence from the tenants lawyers to our Strata Manager and they state 'The Lessees,.....,are responsible for payment of Levies"...Their agreement under the 99 year lease states they shall pay all Levies and costs... so from the advice you have given it would appear that a Special Levy may not be their responsibility.. Legal interpretation on the terms of the contract may be required. 

I have just received an email from the manager of the liquidators stating they have signed the Proxy over to the Strata Manager as they are the legal owners and entitled to do so... This of course is correct as owners under the Strata Law they can take this action, however, they have given a Proxy to the other lessee in her name. I think if they have signed and agreement to pay all levies and costs they should at least be able to vote at meetings especially when at those meetings increases in levies will directly impact them financially. 

The Strata Manager wants their Proxy as he is trying to push through a motion to have a Special Levy imposed of $174,000 on 12 Units for cosmetic work (as per SPMA engineers.) Of course this also means registering for GST and this will cost the lessees more on top of their levies...(read Strataman article on GST). I also know he wrote all three motions on the Agenda pertaining to the GST and Special Levies. 

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16/08/2017 - 11:48 am
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So it now seems this is not a regular residential tenancy but instead a 99-year lease (which is a form of temporary ownership).  Thus, if the lease says they have to pay levies, I would think that would include special levies.  

But this is a very unusual set of circumstances that would require a strata lawyer giving their opinion.  It's way beyond my limited knowledge or experience.

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scotlandx
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16/08/2017 - 12:33 pm
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Yes that is a very specialist area - you would need to get advice from someone expert in that area, which is a combination of leasing and strata.  One thing that would be relevant is the definition of Levies and whether that includes special levies - in all likelihood it would.

I am not an expert in that kind of thing, but if the lessee is responsible for the levies then in these circumstances you would expect the usual rights that go with that, i.e. that the lessee is entitled to vote, at least on matters that affect them, such as the setting of levies.

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