Flat Chat Forum By-laws and outlaws Current Page

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  • #37566

    I am a Lot Owner in a unit block of 28 lots in NSW. At the AGM 2017, a new By -law was  proposed by the Executive Committee with no written explanation. The By-law was subsequently resolved by special resolution of OC AGM 2017 and registered 2017. I have discovered that the by-law was written and proposed by an EC member who holds several roles and is also the owner lot AA. The Lump sum credit payments of approx.$5000 per year commenced to lot AA immediately following the registration of by-law, these payments are equivalent to the levies that the OC should have been collecting.  (I have removed Strata and lot numbers to ensure Privacy in following By-law )

    The By-law is worded:

    “That the Owners Corporation of Strata Plan xxxx reimburse and give the owner/s of Lot AA compensation credit each year, an amount equal to the amount of levies raised each year, due to the owner/s being unable to use part of their registered lot, due to the pump room and all its inclusions and part of corridor common use by Owners Corporation of Strata Plan xxxx

    I intend to take to NCAT and request that the by -law be invalidated and the OC be ordered to recover the compensation (non-contributed levies) funds ie : $$ paid to lot AA.

    I would be interested if anyone has ever encountered such a by-law enforcing the OC to pay compensation funds ( using ADMIN and CAPITAL WORKS FUNDS ) to pay an individual lot owner?

    P.S Additional information : A review of strata plan has raised reasonable doubt that the pump room is situated on lot AA but it is actually located on common property, pump room size 2x2Metres squared and the pump room been in place since the building was built 50 yrs ago.

    Any advice much appreciated.

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  • #37570

    The key to this is whether or not the pump room and equipment is on common property or lot property.

    If it has been placed on lot property (by some quirk) then the lot owner is entitled to claim compensation.  The question then remains, is the amount claimed fair?

    As a member of the owners corporation, you are entitled to view any documents that establish:

    1. Who does the pump room belong to?

    2. How did they establish the amount of compensation? Who assesses the value of the pump room?

    This may be a way of correcting an error in the original strata plan.  Or it may be a way of a multi-tasking committee member getting a backdoor payment for the work that they do.

    Either way, it merits a polite request for the supporting paperwork, and a serious investigation if the paperwork doesn’t exist.

    If there are no valid grounds for the by-law, you can seek orders invalidating it under Section 150 backdating it to its original date, and requiring the money to be repaid.

    • This reply was modified 1 year, 2 months ago by .

    Thankyou Jimmy-T, certainly food for thought.

    I think NCAT ( via mediation) is only solution as there are never committee meetings or correspondence from Committee. I inspected Strata Records and there were no such documents on file. The original strata plan and building plans show it is common property space. Unfortunately the Strata Manager also keeps information like a vault and also never responds. I think 2 years is limit on when we try to repeal it by resolution which is Oct 2019.

    At AGM 2018 Myself and other lot owners pointed out  that the By-law could also be misinterpreted as it is written with the section

    ,an amount equal to the amount of levies raised each year,

    and in legal terms the comma could mean that owner of Lot AA might may claim ALL the levies collected for the block. Leaving us all financially vulnerable.

    This was dismissed by the owner lot AA and he said something of the effect ” you know I would never do that” but Lot owners raised concerns  about what about the future owners ?  Anything is possible ? The Sec/Treas had no answers nor did committee and immediately shut down the discussion. The committee refused to consider to remove , repeal or legally review the By law . Lot owners met afterwards and expressed concern but unable to get an EGM to discuss or put forward a motion.

    Thanks for your input it has been helpful, I will discuss with fellow lot owners our next move.



    Patch wrote:

    In theory Lot owners have rights to request information but in the real world the committee will never respond or address an issue if they have what might  be  perceived as a conflict of interest.How do you establish who owns the pump room ? And who decided on the level of compensation ?

    There are so many possible angles you can take on this – and so many possible solutions – that you need to step back and assess what it is that you want and then what is the best way to achieve this.

    Regarding who owns the pump room, that should be established by checking the original strata plan and then requesting copies of any documents showing the transfer of ownership (if they exist).  These documents should be held by the strata manager.

    Regarding the flaws in process, these can be remedied by having the by-law rescinded and/or having the treasurer/secretary removed from his position or from the committee entirely.

    Here are some general observations and options for you to consider:

    1. From what you say, the by-law was never valid to begin with because it was proposed by someone who did not have the right to do that.  That’s a starting point but it doesn’t make the by-law automatically invalid if it hasn’t been challenged within a specific period. You might have to make that part of your challenge to the by-law as being unjust.

    2. The secretary’s dealings with the owners corporation are not and can’t be “private”.  As members of the OC, you and other owners are entitled to see every document that passes through as a record of the OC’s dealings with anyone about anything.  Even “sealed” decisions of a court in relation of a case involving an owners corporation have to be available for viewing by OC members.

    3. The secretary treasurer, in failing to run the scheme competently and within the parameters set down by the strata Act – especially regarding meetings, agendas and minutes – has rendered himself liable to removal on that basis alone.

    4. The strata committee can replace the secretary or treasurer in those roles (but not as members of the committee) by a simple vote at the committee.

    5. The Owners can remove the committee member – or the whole committee – by special resolution (75 percent of those voting) at a general meeting, either an EGM or AGM.

    6. Any owner can apply to NCAT (via mediation at Fair Trading) for orders rescinding by-laws or removing committee members.

    7.  The ultimate, be careful what you wish for, option is to seek the appointment of a compulsory strata manager to take over the duties of the strata committee and the OC as a whole.

    On the question of compensation, normally the committee would approach a couple of local estate agents and ask them for a valuation, averaging out the figures.  No one should be plucking convenient figures (like the owner’s levies) out of thin air.

    Finally, I think you need some level of professional advice and I recommend that you  contact our sponsors, Strata Answers (click on the ad on the right) and they will advise you on what you can and can’t do, and the best way forward.

    At the very least, it sounds like this committee member doesn’t know or care about strata law and is a bully – and that’s a very dangerous combination for any strata scheme.

    • This reply was modified 1 year, 2 months ago by .

    Thank you Jimmy -T for your prompt response ,

    I have previously wrote a polite request to the OC or strata committee prior to AGM 2018 and requested detailed information Special by-law 1 “compensation ” to be provided before or at AGM 18. …As you suggested above. Unfortunately as the recipient of my correspondence was the secretary / treasurer ( owner lot AA) the committee has never responded  to correspondence prior to or at AGM 2018 . In fact the EC has never tabled my letter in correspondence or responded to date.

    The EC committee has never recorded or distributed Agenda or  Minutes to Lot owners in about 5 years . Having no other option I wrote an open letter to lot owners prior to AGM 18 to inform owners to discuss Sp By-law 1 ” Lot AA compensation “at AGM .However unfortunately any lot owner that asked  questions was intimidated and yelled at by the sec/treas ( owner AA and auditor) and he caused the the entire AGM 18 to be brought to commotion and an abrupt close with no answers. The Strata Manager was present but ineffective.The sec/treasurer said it was “his private business and no business of lot owners” . I know several owners who questioned By law 1 back in 2017 were informed in that it was a new pump room and it had to be installed in Lot AA ie recently…. which has is factually untrue, and pump room is on common property.  At 2018 the owner lot AA again repeated it was a recent addition to his property .

    There are many problems uncovered by my strata records search . The ‘ committee member/owner who proposed the by law as owner lot AA and committee member 2017 was NOT in fact the owner Lot AA in 2017 and did not have proxy from actual recorded owner lot AA . He was a Tennant in 2017. In fact he self nominated as an owner of lot AA since 2014 but only became owner March 2018.

    In theory Lot owners have rights to request information but in the real world the committee will never respond or address an issue if they have what might  be  perceived as a conflict of interest.How do you establish who owns the pump room ? And who decided on the level of compensation ?

    What part of the SSMA Act section 148 0r 150 to ask for decision   Is it a common property by law ? thus should have has signature of each owner paying compensation ? Or is it just unjust 150 ?


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Flat Chat Forum By-laws and outlaws Current Page