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Special Resolution to change by laws
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Faraway girl
Coastal NSW
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05/08/2018 - 11:00 am
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 our NSW Strata Scheme has 14 lots . The developer still owns 5 lots including his own which he uses for holidays. The total lot entitlement he has equals 39% . The other 9 lot owners have total lot entitlements of the remaining 61%. 

Because a special resolution is required to change ( update) our Bylaws, we cannot achieve this as the developer does not believe it is necessary as he has written that “…reliance on Local, State and Federal Laws should be relied on and anything creating civil rights, duties and liberties beyond this should be deleted” ( from the Bylaws).

we are stuck with 8 By Laws that he registered at commencement and now we have new owners/ tenants moving in, hanging tiles on the walls of common property, putting their equipment in walkways and we have no bylaws to prevent this.

I can understand why 75% of lot entitlements are required for issues such as selling or leasing common property, changes to title boundaries etc , however it does not seem appropriate that this developer can prevent us introducing bylaws that are based on the model By Laws just because he holds over 25% of the lot entitlements. He does not live in the building and all other owners do, yet he controls the way in which we are able to manage the building. Every other owner has contributed to the development of the bylaws but each AGM or General Meeting where they have been submitted for adoption has been defeated by this developer in a special resolution. 

any ideas of what we should do? 

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JimmyT
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06/08/2018 - 9:12 am
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I think we have been down this road before. 

Your reluctance to consult or hire a strata lawyer is ham-stringing your ability to resolve many of the issues in your seriously dysfunctional scheme.

In your shoes, I would be asking an experienced strata lawyer if the following action was viable.

To go to NCAT and challenge any unfair by-laws under section 150 of the Act on the grounds that they were oppressive, unconscionable or discriminatory.

I would also ask NCAT to rule, under Section 232, that the model Schedule 3 by-laws be adopted in their entirety (having decided which of the pet and smoking by-laws you prefer).

I would also ask that all costs for this action be charged back to the developer because he has created this untenable situation.

OR

You could seek the compulsory appointment of a strata manager of your choice for a period of six months with the specific remit to sort out the finanicial status of the scheme and to introduce and register the model by-laws.

Your developer is a bully who treats you, your neighbours and strata law with contempt – this would soon become apparent at an NCAT tribunal. 

But it won’t if you don’t take the first step and don’t cave in whenever the developer offers a compromise which only continues this ridiculous travesty.

Apply for mediation as a first step (unless you go for a compulsory appointment) and hold your ground.

And talk to a lawyer!

Alternatively, ring up your local paper, explain how this bully is ruining your lives (in very simple terms or they won’t understand) and see if he can  be shamed into behaving himself.

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Faraway girl
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11/08/2018 - 11:41 am
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Thanks Jimmy, you are right. We have been down this road before and I know that we need legal advice.  Our last meeting of the Strata Committee has determined that the Chairman and Secretary consult a lawyer to see what the process for legal involvement might be and Report cost of same back to SC before action is taken. Hopefully we will get it resolved soon. Thanks so much for the many issues you have advised us on. It is really appreciated. 

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Sir Humphrey
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11/08/2018 - 3:44 pm
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Why not just put a motion to a general meeting to adopt whatever set of bylaws you want? Then, if it passes, that great. If it fails but was supported by every owner except the developer, you then seek an order from the Tribunal to give effect to the failed motion on the grounds that objection to the motion is unreasonable.

I assume NSW has a provision for doing that. I am familiar with the ACT law, which does. In the ACT the Tribunal does a merits review of the failed motion. That is, it looks at the proposal and determines whether it would have been reasonable and preferable for it to have passed. The Tribunal does not determine whether the person objecting was being unreasonable. It is only concerned with determining what the best outcome would have been. 

If your proposed by-laws are identical with the model bylaws or closely modelled on them, you can argue that is clear evidence of their reasonableness. If the argument is uncomplicated and you have demonstrated by the vote that every owner except one is in favour, you should be able to get a good result out of the Tribunal at little cost without needing a lawyer. 

I suggest that putting the motion to a properly notified general meeting is the first step. Make sure you have every owner take part, in person or by proxy. I think the Tribunal will want you to demonstrate via proper general meeting minutes that the motion has unanimous support (except for the developer) and that you attempted to amend the bylaws via the correct process before seeking a Tribunal order. 

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JimmyT
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11/08/2018 - 5:55 pm
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Sir Humphrey’s advice is spot on but I would add that you should also add a motion to rescind all the by-laws that your feel are unfair – or oppressive, discriminatory or unconscionable, to use the language in the Act. 

That way the Tribunal can see that you don’t just want the model by-laws, you want to be unshackled from the pro-developer ones. 

Again I think consulting a lawyer is a good move – your developer is a bully and you sound like you need someone to fight your corner.

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Faraway girl
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13/08/2018 - 8:46 pm
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Thank you Sir Humphrey and Jimmy for your advice.  It is important that we are always compliant with the NSW Strata Scheme ManagementAct 2015 as one slip up on our part would ensure that this developer would use that against us. We took a vote at one of our Owners Corporation General Meetings and then received a letter from his solicitor stating that we did not vote in accordance with the Act which requires a special resolution.  The By Laws ( very close to the Model By Laws) have gone to 3 Owners Corporation Meetings and have been defeated each time by the Developer even though every other owner attended the meetings and voted in favour.  We will take your advice, take the By Laws to a special meeting of the Owners Corporation and when it is defeated ( which the developer has promised any new By Laws will be defeated by him) then retain a Strata solicitor to represent us at the Tribunal.  Hopefully the Tribunal will find in our favour and in any case we will aim to have the developers 8 registered by laws struck out because they are  discriminatory.  Thanks again . 

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JimmyT
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13/08/2018 - 10:41 pm
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It’s ironic, isn’t it, that someone who claims not to know strata law can always find a loophole to their advantage.

But it’s true, the law requires that every item that requires a special resolution vote must say so on the agenda.

Also, every special resolution vote must be conducted as a poll vote, so be careful you don’t trip up over that one too.

It strikes me that you might get together with other apartment owners corporations in your town and share the cost of a decent strata manager from the city who could keep you all on track with these things by phone and email and maybe visit once every three months.

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Sir Humphrey
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14/08/2018 - 10:26 pm
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It will, or at least should, count in your favour that the matter has been put to not one but 4 meetings and every time was supported by all but one owner, some minor procedural irregularities notwithstanding. 

As suggested above, if you want to get rid of the old bylaws, not just add new ones, you could have a single motion to both rescind the existing set and adopt your preferred replacement set. 

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