Other party blocking renovations

Your neighbour is playing games with strata law.  The same principle that says you have to pay 80 percent of the water usage (sorry about that!) also means that you have 80 percent of the votes, which is enough for you to pretty much do as you please (within the law) provided you do it properly.

That means properly convened meetings, proper agendas and minutes and all the other bells and whistles of strata life.

So your neighbour can't block renovations because they would be outvoted at a general meeting by a factor of 80 to 20 once what is known as a poll vote was called by you.

You can go ahead and agree at a meeting to fix the roof – but you will have to pay 80 percent of the costs.

You are even in a postion to pass special resolutions because there's no way there can be 25 percent of the votes against.

For instance, you could pass a motion to install separate water meters, which would take care of that problem.

Just be very carefull that you do everything by the book so that you don't spent the rest of your life fighting your neighbour through the CTTT.

For instance, your unit entitlements don't count at an executive committee meeting – there it's strictly one owner, one vote.

And there's a established concept in strata law of a majority “defrauding” the minority whereby even decisions that are within the letter of the law are patently unfair and can be challenged on that basis.

What I would strongly recommend is that you first write down all the things you want to change about the place then engage a strata manager or specialist strata lawyer as a consultant, to tell you what you can and can't do, direct you through the correct processes, and make sure everything that is done is done properly.

The other owner can slow things down by not turning up for meetings (which would then be inquorate) but you just set the meeting for seven days hence and if they don't turn up, you carry on regardless.

You should definitely talk to a professional about guiding you through this difficult initial period of taking control of your building, meanwhile here, from Fair Trading's Strata Living handbook, are a few points about two-lot stratas.

Building insurance and sinking fund
Owners in two-lot strata schemes may in certain
circumstances be able to obtain their own building
insurance for their lot [s. 83] and be exempt from the
requirement of having a sinking fund [s. 69]. These
circumstances are as follows:
• the buildings in each lot are physically detached
• no building or part of a building is situated outside
the lots
• the owners pass a unanimous resolution for the
owners corporation not to have building insurance
for both buildings and/or not to have a sinking fund.
Quorum
A quorum in a two-lot scheme with two owners is
always two people who are entitled to vote [Schedule
2, Clause 12 (3)].
Executive committee
The executive committee in a two-lot scheme is made
up of:
• the owner of each lot that has only one owner
• one co-owner of each lot that is owned by co-owners
• the company nominee of each lot owned by a
corporation [Schedule 3, Clause 1].
Audit of accounts and financial
statements
There are no requirements for two-lot schemes to
have any audit of accounts and financial statements
carried out in accordance with the Australian Auditing
Standards [s.107].

And here is what it says about meetings where there is no quorum

If there is no quorum after 30 minutes of the scheduled
start time, the meeting must be postponed (adjourned)
for at least 7 days. The person chairing the meeting
sets the date and time for the next meeting. If there is
no quorum within 30 minutes of the time fixed for the
adjourned meeting, the meeting is able to go ahead.
The quorum is then the owners and proxies present
who are entitled to vote [Schedule 2, Part 2, Clause 12].

Firstly, as good a place to start is Strata Living, the Fair Trading handbook which you can download as a pdf HERE.

I can't give you an estimate of costs because Strata managers traditionally don't like two-person strata plans and may factor that in to estimates.  There's a lot of irresistible forces meeting immovable objects in two-unit complexes and there isn't a lot of money around because of the small size of the strata plan.  Basically it comes down to less money for more hassle and that's not bargain in anyone's book. 

There are two strata management companies that sponsor this website (which if nothing else shows they are highly intelligent people).  Strata Associates actually run my building, I've known them for years and they are great. Strata manageIT who have an ad on the forum page are a full-service SM firm too, but they have a flexible online component that allows you to use them as little or as much as you need to and pay accordingly.  Certainly in the long term they might offer a solution that fits your bill.

The resetting of the Unit Entitlements can be fairly easily done by unanimous agreement.  Get a surveyor in and get their expert opinion.  Shifting UEs over to your neighbour will save you a lot of money but will remove the “absolute” power of that 80 percent vote.

If I were you, I'd sort out the critical issues first – the roof, renovations and water meters – and wrap them up in a package that the neighbour will agree to which includes agreement on redistribution of UEs.

Then look at a flexible strata management arrangement so you can get help as and when you need it.

For what it's worth, I think standard SM fees are somewhere north of $200 per unit but I'm happy to be corrected if someone has a more accurate figure.