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  • #38675
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    Larry
    Flatchatter

    There are 4 ground floor units in block of 4 in total. Owners of 3 units are proposing exclusive use of common backyard area for each of their units by erecting fences between them so that they each create small courtyard for each. They have also been told that it would increase the value of their lots. There is one owner whose lot is at one end of the block who doesn’t want exclusive use and in any case the block’s electrical meter box is located directly outside his unit and the meter box requires unhindered access.

    Bylaw granting exclusive use is yet to be prepared but will almost certainly be passed by Special Resolution as 3 out of the 4 owners want exclusive use.

    1. However, can they also insist, by way of their 75% majority, that legal costs such as bylaw preparation be paid for by the whole OC ( i.e. not just by the beneficial owners but including the sole person not benefiting from exclusive use)?

    2.What if any action can the sole remaining owner not benefiting from exclusive use take to ensure that:

    a) he doesn’t have to pay legal or other costs associated with the proposal such as bylaw preparation

    b) he is not responsible for ongoing maintenance of the fences

    c) that the proposed bylaw state that the 3 owners pay compensation to the OC for exclusive use (i.e. increased value of their lot minus cost)?

    3. Would the Dividing Fences Act be applicable? For example, the lot without exclusive use is an end lot and would have the neighbour’s courtyard fence on one side.

    Advice appreciated.

    #38681
    Jimmy-T
    Jimmy-T
    Keymaster

    Hmm, nice try by the majority of three but there is a concept in law called fraud against the minority (among other things) which basically says that a majority of people can’t agree to do something that would unfairly affect the minority of people, even though the processes they use appear to be legally sound.

    Previous attempts to do this have resulted in a ruling that the owners benefitting from this kind of land grab have had to pay the other owners some sort of compensation.

    I am not a lawyer, but if I were the fourth person, I would go to the meeting and tell the other three that I would expect to be compensated by one quarter of the total benefit they would receive from the increase in value in their properties, as estimated by an independent surveyor of my choosing.

    It’s an ambit claim but it will get their attention.

    Failure to agree on this would see action at Fair Trading, NCAT and the local council to prevent the illegal subdivision going ahead on the grounds that the by-law was discriminatory, the sub-division was not permitted by the DA and the  aforementioned “fraud on the minority”.

    Meanwhile, resident No4 should talk to an experienced strata lawyer ASAP.

    To answer your questions:

    1. …  can they also insist, by way of their 75% majority, that legal costs such as bylaw preparation be paid for by the whole OC ( i.e. not just by the beneficial owners but including the sole person not benefiting from exclusive use)?

    That’s not how it works.  This plan is not for the benefit of the strata scheme as a whole and any attempt to do that could be seen as fraudulent.

    2.What if any action can the sole remaining owner not benefiting from exclusive use take to ensure that:

    a) he doesn’t have to pay legal or other costs associated with the proposal such as bylaw preparation

    The fraud on the minority case I mentioned above found that the renovators could defer the cost of legals etc against the benefit accrued through the renovation. But the people benefitting from the by-law should pay the costs initially and it could, again, be seen as fraudulent if they try to shift them to the OC.

    b) he is not responsible for ongoing maintenance of the fences

    The Dividing Fences Act applies, which means the owners on either sides of the fences are responsible for their maintenance.  The exceptions are where a fence divides lot property and common property (split between the OC and the lot owner) and between a lot and public land (OC, I think???)

    c) that the proposed bylaw state that the 3 owners pay compensation to the OC for exclusive use (i.e. increased value of their lot minus cost)?

    As explained above, this is pretty standard.  Any attempt to not do this – or something like it – would leave them wide open to legal challenge and even greater legal costs which they could not defray. Talk to a strata lawyer.

    3. Would the Dividing Fences Act be applicable? For example, the lot without exclusive use is an end lot and would have the neighbour’s courtyard fence on one side.

    Yes, as explained above – so responsibility for its upkeep would fall jointly to the fenced-off lot owner and the OC, meaning the end owner would be paying, roughly, one-eighth of the cost of maintenance (a quarter of the OC’s half).

    The owners planning this land-grab should bear in mind that the local council planning authorities made this area open for a reason and they may not want fences.  Also, the end unit owner should be looking for a considerable adjustment in their levies, commensurate with the alteration in values.

    So this should not be seen as a “given” – the renovating owners really need to get the end owner onside if they want to get this through smoothly.  If they choose to blunder ahead and bully their way to a result, they could end up with no fences and substantial legal bills.

    And, for the last time, the end owner needs to talk to an experienced strata lawyer or, at the very least, our sponsors at Strata Answers.

     

    • This reply was modified 4 days, 5 hours ago by Jimmy-T.
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