The contract con trick

I hear some of our less ethical developers are sidling up to Fair Trading Minister Linda Burney, trying to convince her that demanding your proxy votes – your right to have a say in the running of your own home –  when they sell you an apartment is in some way good for you.Yeah, right. This week, I caught sight of a sales contract for an apartment block on the North Shore that not only demanded that the current purchasers hand over their proxies, but insisted that the proxy be signed over by the next purchaser as a condition of sale.Fair Trading have told us that all you need to do to revoke a proxy is turn up at a meeting or sign it over to another person.  But this contract included a clause that the owner would not do anything that rendered any part of the contract invalid.Get the picture?  You don’t just give away your vote; you dare not even turn up at meetings to hear what’s being discussed because, under strata law, to do so would revoke your proxy.Even without such draconian clauses, a couple of strata lawyers have told me that revoking a contractually-assigned proxy vote, either by turning up at meetings or assigning it to someone else, could constitute a breach of contract. That’s why so many strata owners are too scared to demand their rights when they realize what’s going on.When we first exposed the scandal of proxies-on-demand, our recently appointed Fair Trading Minister said potential purchasers faced with any such clauses should seriously consider buying elsewhere. Her department is now considering legislation to close this sleazy loophole. Some developers say they need to be able to demand proxies just for the first year so they can get new buildings “bedded in”.  Coincidentally, this also gives them time to award long-term, lucrative management contracts to subsidiaries and mates (at your expense), which in turn helps them avoid claims on building defects and generally run your home to suit them. If you’ve ever signed or seen a contract demanding your proxy, please fax me the relevant pages (anonymously, if you wish) to 02 9358 5216 or scan and email it to mail@flatchat.com.au and I’ll pass it on to the powers that be – just so they know what we’re up against out here.

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