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23/03/2020 at 5:07 pm #49078fight4justiceFlatchatter
HOW DO I GET RID OF DYSFUNCTIONAL EC AND SM under section 237 of the Strata Schemes Management Act 2015 (“SSMA”)?
I moved into a new apartment block in Sydney in 1986. The strata manager(SM) and full time on site building manager(BM) were both nominated by the developer and belong to the same owners under different trading names. Since inception, the same Strata Committee(SC) remains in control which comprises of one elderly male owner occupier and two single middle aged females non-resident investor owners.
Over 90% of the owners are migrants who are not proficient in English and hence not interested in participating in strata affairs. The EC members are passive, indifferent, inexperienced and lack of strata law knowledge and practice.
As a result, the BM and SM exploit their ignorance and indifference via an opaque style of strata management and not follow good due diligence management standards such as accountability, transparency, and are reluctant to carry out statutory duties of strata law compliance and enforcement even there have been serious breaches of the strata law which can pose serious financial and legal consequences for owners and detrimental to the safety of all residents.
I have over 30 years strata living experience as well as over 20 years SC experience, having worked with quite a few SMs in Sydney. I moved into this brand new apartment block in 2016 and have observed the unsatisfactory performance of both SC, BM and SM.
In November, 2019, I decided to intervene by joining the SC as Secretary in order to have a voice because both the past and present ECs have been complacent and passive whilst the BM and SM deliberately hiding important information from the SC and often make misrepresentation to SC to conceal the real messy strata situation from the SC. There have been two major issues I raise with the SC as follows
RELUCTANCE TO PERFORM STRATA LAW COMPLIANCE AND ENFORCEMENT DUTIES – ALLOWING ILLEGAL STRUCTURES I.E. ILLEGALLY ADDED BED ROOMS WITHOUT TAKING TIMELY ACTION
There were 16 cases of illegal structures existing i.e.illegally added bed rooms in 16 apartments. The full time on site BM has neglected to take timely action to stop or rectify such illegal activities. I was living next to one of such apartments. After joining the SC, I raised such issue immediately with the present SC which have never been aware or informed of such MATERIAL BREACHES which could bring disastrous financial and legal consequences for all owners and residents like those in the infamous 2003 Bankstown Big fire killing one resident and incapacitated another with massive financial damages due to the same reason. In my personal case, the offending owner added the illegal bedroom in 2017. As a resident and owner, I have reported to the BM three times raising my concerns i.e. first in Jan 2018, 2<sup>nd</sup> in Aug 2019, 3<sup>rd</sup> in Oct, 2019. Every time the BM assured me he was taking action. In the third time, he revealed with the consent of the SM but without the knowledge and consent of the SC he entered into a written agreement with the incoming buyer owner who undertook to remove the illegal structure immediately after taking occupation in November, 2019 which the latter reneged again and again until January, 2020.
Eventually, I instructed BM and SC to issue a Section 145 Order which was successful to compel the offender to remove the illegal bedroom in one week. This case clearly demonstrated how both the SM and BM blatantly ignored their statutory and common law duty of due care and due diligence by haggling and granting concessions in total disregard of continual financial risks posed to owners and danger to residents. My past experience was that such clear cut cases would normally be rectified within 2 weeks by verbal warning then followed immediately by a Section 145 order if the verbal warning was ignored. That should be the normal prudent strata management practice.
ILLEGITIMATE EXPENDITURE ISSUE – REMOVAL OF WASTE OTHER THAN GENERAL RUBBISH AND BULKY HOUSEHOLD ITEMS ABANDONED VIA ILLEGAL DUMPING BY RESIDENTS AND FRIENDS
There are two main garbage rooms on the Lower Ground Floor which can be freely accessed by people without restriction once they enter our main entrance. The BM has never attempted to stop illegal dumping of huge volumes of trade, industrial, renovation wastes and allow residents and friends to dump large unwanted household items such as 500L Fridge, King size beddings, dining tables etc into the garbage rooms. Such items are accumulated in the main garbage rooms until Council Waste Collection date when they will be moved by our cleaning contractors to the Collection Point near our building to be picked by the local Council. As an owner and resident, I have complained to the BM the messy conditions created and the hidden labour cost of moving such wastes which would have been stopped by the BM performing his strata law compliance and enforcement duties diligently. The standard strata practice is that all residents should not dump any wastes other than general rubbish and be responsible for disposal of their own household items. i.e. they should move unwanted items to the Council collection point one day prior to collection date at their own effort/cost. No OC owners corp is responsible to pay for the removal and disposal expenses of illegal dumpers. IT IS ILLEGAL FOR THE BM TO AUTHORISE AND PAY SUCH ILLEGITIMATE EXPENSES BY NON-DISCLOSURE TO SC as it is illegitimate, unfair and unjustified expense incurred via BM’s neglect and not carrying out his duties of strata law compliance and enforcement. I have highlighted this point to the SC that such cost will become a continual growing and substantial permanent cost eroding our administrative funds and a waste in the long term which I observed and experienced in my previous EC experience.
In order to be seen to be doing something, the BM then misrepresented to the EC that our illegal waste dumping was not serious enough but instead recommended switching service provider from Local Council to a private waste management company. The fundamental problem of illegal dumping still remains as BM claims it is not feasible for him to carry out compliance and law enforcement duties because it was too time consuming. I raised strong objection to the SC that the disposal cost is an illegal expense and the non-intervention policy of the BM and SM has created the habit of illegal and reckless dumping for the past four years. I re-iterated both BM and SM should perform their strata law compliance and enforcement diligently. I also warned it is now not a good time to switch service providers because Council service is more reliable and secure than a private company in the present time of approaching recession.
Because of the above two serious issues, I have recommended to the SC demanding both the SM and BM to improve their services as follows:
- They should start performing their strata law compliance and enforcement duties diligently to crack down on illegal structures and illegal dumpings.
- They should improve accountability and transparency and abandoning their present opaque strata management style. Instead of not reporting anything to EC on material breaches and material events, they should take a proactive approach of regular reporting and updating to EC on MATERIAL BREACHES AND EVENTS
- That the BM should instruct the cleaning contractor to segregate the removal and disposal cost of illegal dumping in their invoices clearly to identify the cost of removing and disposal of wastes from illegal dumping
- The annual strata accounts should be improved to separately show the disposal cost of illegal dumping instead of hidden under the misleading expense heading “Cleaning cost”
There has been no positive response from the SC members despite my alerts and actions. I am the lonely voice which is disliked by the BM and SM. SC members have remained silent and non-cooperative and the female treasurer, who is thrifty and addicted to not spending money, has remained silent on the issue of illegal expenses and not responded to my email regarding strata matters. She also refused to share strata affairs information which I am entitled to know as SC member even if I requested for them. The other SC members are not helpful and remain silent on the above issues.
It appears the present SC which has been in control since inception is complacent and happy to maintain the status quo by doing nothing. The BM and SM’s response have also been lukewarm and mute and unwilling to carry out reform conscientiously.
My last resort is to apply under section 237 of the Strata Schemes Management Act 2015 (“SSMA”), to apply for Tribunal orders appointing a new strata manager effectively to act like a dictator by exercising all the functions of the owners corporation, the executive committee, the chairperson, the treasurer and the secretary.
It probably is a better choice in the best interests of all owners rather than letting the present dysfunctional SC, SM and BM to continue their opaque, passive and disorderly unprofessional style of SM.
Can I apply in my dual capacity as owner and EC member? What is my probability of success?
Any invaluable opinion and advice would be much appreciated.24/03/2020 at 10:06 am #49087Colonel SchultzFlatchatter
I can confirm you can apply as an interested person in either capacity but dont expect to retain your position as Sectretary if you do. Trying to remove theses sorts is a high bar.
Chances of success depend on many factors and the orders you are seeking. Just be aware that once you start this action you will be sucked into the litigation vortex.
These sorts of problems mentioned are common in my experience and the systems and laws in place are by no means perfect.24/03/2020 at 6:07 pm #49107Jimmy-TKeymaster
As Col Schultz said, theis is a tough row to hoe and very much a case of “be careful what you wish for”.
Firstly, you would have to convince the Tribunal that there was something seriously amiss that couldn’t be fixed through normal methods. People not following the rules is not enough. The fact that you have mmanaged to forc one unit to remove illegal structures is proof that the system works – it just doesn’t work well.
Also, if a statuory manager comes in, you relinquish all power and influence. Also, becasue they are legally required to do everything by the book, it can make things very expensive indeed.
If I were you I would reach out to all the ethnic owners in the building – maybe bring in an interpreter from one of the friendship groups like the Australian-Vietnam Friendship Society or whatever the approriate ethnicity is, and get them to explain to the residents how and why they need to be involved.
This may sound like a mammoth task but, trust me, it’s easier than running a case through NCAT, especially since the results there are far from guaranteed.
Develop an understanding of how power structures work in those other societies and that will guide you to your next move – take over the whole owners corp, get rid of the dead wood and put things on an even keel.
That is going to be a much more enriching and satisfying process for you than bashing your head off the NCAT brick wall.
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