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When is an owner deemed as unfinancial?
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SJ1965
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18/12/2018 - 7:55 pm
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Hi All,

If your strata levies are due on say the 1st of November but you have 28 days to pay, does this mean you are deemed as unfinancial from the 1st of November or from the end of the 28 days?

This is ACT based if that makes any difference.

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scotlandx
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18/12/2018 - 9:33 pm
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From the end of 28 days.

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SJ1965
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18/12/2018 - 9:39 pm
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Thanks for that.

Our Strata manager has been advising the opposite.

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Jimmy-T
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18/12/2018 - 10:42 pm
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The definition in the Act say that an “unfinancial owner” means an “owner of a lot in a strata scheme who has not paid all contributions levied on the owner that are due and payable, and any other amounts recoverable from the owner, in relation to the lot.”

So if your levies arrive and you have been given until the 30th of the month to pay them, what is the date on which they become “due”.  Does due mean the same as overdue? Most strata manager err on the side of caution and allow the full payment period to elapse before calling an owner unfinancial.

But if there is a dispute in the building, straws are grasped, loopholes are explored and fine print is scrutinized.  I would lay odds on NCAT resolving this by saying the full 28 days or whatever period was stated in the levies notice would have to elapse before an owners was struck off.

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twosailram
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19/12/2018 - 9:04 am
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In NSW, a relevant clause in Sch 1, 23 (8) states “Voting rights cannot be exercised if contributions not paid A vote at a general meeting (other than a vote on a motion requiring a unanimous resolution) by an owner of a lot or a person with a priority vote in respect of the lot does not count if the owner of the lot was an unfinancial owner at the date notice of the meeting was given and did not pay the amounts owing before the meeting.”

In our strata, we use our strata manager to issue levy notices and collect payments. Our treasurer can access on-line the accounting books for these dues and payments. At any meeting, the chair asks the treasurer to confirm all levies are paid, which he does based on the accounting record accessed that day.

The interesting question is, If someone is unfinancial when the meeting starts, and the meeting is adjourned for whatever reason, AND the unfinancial owner becomes financial before the adjourned meeting, can they vote at the adjourned meeting?

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Sir Humphrey
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19/12/2018 - 9:21 am
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twosailram said
…The interesting question is, If someone is unfinancial when the meeting starts, and the meeting is adjourned for whatever reason, AND the unfinancial owner becomes financial before the adjourned meeting, can they vote at the adjourned meeting?  

The short answer is that I don’t know. That might be the sort of thing covered by a precedent court decision if it is not completely clear from the Act. 

My longer answer would be to say that if I were the chair of the meeting and the meeting were adjourned and a member of the OC had become financial before the adjourned meeting commenced, then I would accept their vote. I would argue that this is consistent with the spirit of the Act (all financial members should have the opportunity to take part in democratic decision making) even if a pedantic argument might be made along the lines of the adjourned meeting being a continuation of the meeting that started when the member was unfinancial. 

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scotlandx
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19/12/2018 - 1:53 pm
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The issue is whether you are unfinancial on the date of the notice of meeting, and don’t pay before the meeting, refer clause 23(8) of Schedule 1. That is, you must pay what is owed as at the date of notice, before the meeting.

So the meeting being adjourned doesn’t make any difference, you have to pay before the original meeting.

Note the amount is the amount you owe on the date of the notice of meeting.

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Sir Humphrey
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22/12/2018 - 1:52 pm
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The original questioner was from the ACT. It is not clear if they are concerned about eligibility to vote at general meetings. The ACT Act simply says:

Schedule 3, part 3.3(3) “If the owners corporation has 3 or more members, a person is only entitled to vote for a unit on a motion requiring an ordinary or special resolution if all amounts payable to the owners corporation for the unit have been paid.” 

I can’t see anything that limits the ‘amounts payable’ to those that were payable by the date of the meeting notice or that the amounts must be paid by the start of a meeting, whether the notified date or some later date due to adjournment. I would say ‘If you have paid everything that is due for payment by the time the vote is taking place, you can vote.’

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Jimmy-T
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25/12/2018 - 3:47 pm
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Sir Humphrey said
The original questioner was from the ACT.
  

Missed that.  Sorry!

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