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Rectification of Common Property Rights Bylaws
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Loz
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11/09/2018 - 9:25 am
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I was wondering if anyone could assist. I live in a row of terraces which were converted to apartments many years ago – there is an upstairs owner and a downstairs owner. We have a situation where a resolution was passed in the 1990s which gave the roof space to the upstairs owners for free. Some upstairs owners went ahead and built attics. Unfortunately for them, the bylaw was not compliant with the Act as it did not provide for who was responsible for maintenance of this space. 

There is also some laundry/storage space underneath the downstairs apartments and this was also the subject of a bylaw (which was also unenforceable because it didnt provide for maintenance) – the bylaw purported to give half the space to the upstairs owner and the other half to the downstairs owner.

The upstairs owners are now seeking to fix the bylaws and would like to protect the status quo (ie where they get the attics and half the downstairs laundry/storage space). Most of the downstairs owners are not happy with this (although a couple of the downstairs owners have sided with the upstairs owners as they are doing separate deals with their upstairs owners so a special resln may get passed). The downstairs owners consider they should get the laundry/storage downstairs space and the upstairs owners should get the upstairs space. Some upstairs owners bought their apartments with the attics already built so effectively ‘paid’ for this space. However they obviously had the opportunity to review the bylaws and see they were invalid (ie let the buyer beware). The downstairs owners would even be prepared to pay the upstairs owners some money for their half of the laundry space but most of the upstairs owners will not entertain this.

We have a ‘rogue’ Chairman who used to be on the same side as the downstairs owners but has now gone over to the side of the upstairs owners and he is pushing their agenda for them. He thinks he will be able to do a deal with his upstairs owner and it will be easier than getting the other upstairs owners to agree to something that is fair for everyone. The Chairman and the upstairs owners have reduced the size of the Exec Committee and elected themselves and are now spending strata money to push their agenda (ie getting architects to draw plans, drafting new common property rights bylaws, threatening to go to NCAT if their bylaws re the attics arent passed etc). They are proposing to give the downstairs owners some useless space at the back of the laundry/storage space in return – this space requires excavation and has no light or ventilation so clearly isnt as valuable as attic space with balconies and city views. They are also planning to expand their attic space entitlement as part of this process. 

I read with interest the case Immer vs Houghton that was posted in this thread and there seems to be some principles that could apply here but I was wondering if anyone had any experience with this and/or any views?

 

Thanks in anticipation!

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JimmyT
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13/09/2018 - 11:54 pm
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You are very fortunate that the dodgy by-laws have been found to be defective.  It really doesn’t matter what the chairman or his cronies want – there is a legally established formula for deciding theses things and procedures available at NCAT for forcing the committee to do the right thing if they choose not to.

In very simple terms, the people benefitting from the attic conversions have to pay the Owners Corporation  a sum roughly equivalent to the increase in value to their homes, minus the reasonable costs related to the conversions.

The same applies to the basement space being demanded in return.  Even if a majority decide to ignore this, it’s called a fraud against the minority and it can and should be reversed.

You need to get a neutral assessor (a real estate agent will do it) to work out the relative values.

If the self-interested owners upstairs refuse, tell them that not only will you take them to NCAT to force them to do the right thing, you will also insist that the Owners Corp charges them rent for the years that they have illegally been using the space.

  

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