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  • #55750
    Tinka1
    Flatchatter

    I am in a complex with 48 lots made up of 24 townhouses and 24 units. There is a large difference (60/40) in levy’s and (70/30) maintenance cost heavily weighed towards the townhouses paying for units maintenance.
    The topic of splitting the strata has been raised, but we are aware we would require a 75% in favour vote for this and there is no way unit owners would be in favour if we were to call an extraordinary meeting.
    My question:
    At an AGM where traditionally not many owners attend, we were to call for a Poll vote to split strata between T/Houses and Units. Would this be accepted and legal, as we would have a majority of T/House owners attend and almost no unit owners?
    Naturally, the unit owners would vote against it, hence the suggestion of a poll vote at the AGM and having those in attendance who would be a major majority of townhouse owners decide?

    • This topic was modified 1 month, 2 weeks ago by .
Viewing 7 replies - 1 through 7 (of 7 total)
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  • #55780
    Jimmy-T
    Keymaster
    Before lodging an application for levy maintenance adjustments with NCAT, is it best to go thru the following:
    • the Owners Committee (they would be in agreement)

    Tha’t your first step.  You might want to take a cost estimate from a lawyer so everyone knows what they’r getting into.

    • strata management (not sure of how they manage the process)

    Your strata managers should be able to advice you on how to proceed

    • Call for a general meeting to discuss

    Yes, there will be objections – you can’t expect turkeys to vote for Christmas –  but at the very least haing tried to get broad-based support can only help (even if noone else comes on board).

    • Or just lodge an independent application for adjustments ruling?

    Jumping straight to that step would make it more like a “them and us” dispute, rather than an effort to share costs equitably.

    I assume there will be unit owners who would contest this as it is going to cost them more in levy’s, does it then become a tribunal hearing or is the ruling made just on evidence submitted showing the imbalance of contributions?
    There will probably be a hearing and I’m sure opponents to the move will be allowed to put their case.  But don’t forget that this can be pursued by individual owners, so having the support of the committee and maybe even the majority of owners who attend your general meeting can only help.

     

    #55777
    Tinka1
    Flatchatter
    Chat-starter

    Thanks again Jimmy,

    I’m sure there are many others on the forum who are going thru or thinking similar to what we are seeking to resolve. I have searched for previous posts on similar issues but can’t seem to find similar discussions?

    Wear and tear is also a major issue where the units are concerned, but without dividing the strata into 2 which appears to be a massive challenge, the next best solution is to minimise impact to T/Houses for ongoing costs which are imbalanced by levy contributions.

    Before lodging an application for levy maintenance adjustments with NCAT, is it best to go thru the following:
    •  the Owners Committee (they would be in agreeance)
    • strata management (not sure of how they manage the process)
    • Call for a general meeting to discuss
    • Or just lodge an independent application for adjustments ruling?
    I assume there will be unit owners who would contest this as it is going to cost them more in levy’s, does it then become a tribunal hearing or is the ruling made just on evidence submitted showing the imbalance of contributions?
    apologies for all the questions but this being our first experience with strata we are shocked at the heavily weighed levy’s and the roadblocks to correct without the major expense of legal.
    #55769
    Jimmy-T
    Keymaster

    The main barrier to splitting the costs is that strata law is absolutely rigid on the principle that charges to owners should be levied on the basis of unit entitlements.  The trade-off is that those who pay most get  more votes.

    You could possibly (and I’m not sure about this) separate the water bills so that only high-rise owners pay for high-rise water.  You’d do this by asking the Tribunal for orders under section 87 of the Act (below) to allow for payment in a different manner.

    This would not fix the problem of additional wear and tear in the high-rise section of the scheme but then it would shift the voting balance either.

    Otherwise, I would be seriously tempted to calculate the inequity in costs versus payments and then seek adjustment of the unit entitlements on that basis.  The fact that townhouse owners are more active and united in their views may offset  the shift in power balance towards the tower owners.

    A cleaner break would be to apply to the Supreme Court to establish two strata schemes, plus a community scheme for shared resources, but that could be so expensive that you’d soon swallow up any financial benefits.

    Either way, you need a reliable strata lawyer and I wholeheartedly recommend our sponsors Sachs Gerace.

    87 Orders varying contributions or payment methods

    (1) The Tribunal may, on application, make either or both of the following orders if the Tribunal considers that any amount levied or proposed to be levied by way of contributions is inadequate or excessive or that the manner of payment of contributions is unreasonable.

    (a) an order for payment of contributions of a different amount,

    (b) an order for payment of contributions in a different manner.

    (2) An application for an order may be made by the lessor of a leasehold strata scheme, an owners corporation, an owner or a mortgagee in possession.

    • This reply was modified 1 month, 2 weeks ago by .
    #55767
    Tinka1
    Flatchatter
    Chat-starter

    Jimmy thanks for the feedback it makes sense and appears to be a very challenging and potentially expensive process with possibly, not the solution we wish for. And not a straightforward as a Poll vote at the AGM, which was the assumption we required to divide strata.
    Going down a redistribution path is likely not going to be the solution for T/House owners, as maintenance is where the major imbalance is.

    1. Units have a single water meter for all 24 units, which is paid by strata, not individual usage
      T/Houses have individual water meters, so are paying for their own and then contributing to the unit’s costs.
    2. Fortnightly scheduled cleaning of Unit foyers/garbage areas is contributed by townhouse owner’s levy’s, but there is no usage by T/House lots for this service.
    3. Electricity for common areas, there are 2 meters one for unit block carpark, entry foyers. The other is on the townhouse side and covers path lights only.
    4. Ongoing general repairs continue for units due to the majority being leased, where the T/Houses are majority owner-occupied and rarely have maintenance requirements. This is likely to increase as the complex gets older?

    Is there an alternate solution apart from lot redistribution to balance the maintenance schedule more to user pays for services?

    #55765
    Jimmy-T
    Keymaster

    I’m afraid I don’t think it’s as simple as that.  Even if you were trying to do this under the laws that allow 75 per cent of owners to vote to renew the building, you would also need the approval of 75 per cent of all owners individually, as in one owner, one vote.

    In any case, I suspect you need to refer to the Strata Schemes Development Act and, specifically, Section 9, Part 3, which refers to going to the Supreme Court to seek orders to change or dissolve the strata scheme.

    Now, if you are going down that road you will need competent and experienced lawyers, and I am neither of those things.

    But let’s look at the problem, rather than possible solutions.  In your scheme, you feel the townhouse owners are paying too much and the apartment owners too little.  You can change this more easily by having an overwhelming vote by owners in both parts of the scheme to ask the Tribunal (NCAT) to approve a redistribution of unit entitlements.

    The maths are obvious – their block costs more to run yet you contribute more to the kitty.  Something seriously wrong there.

    Now, your apartment dwelling neighbours aren’t going to like this but, once you explain that if they refuse, the alternative is that you will go to the Supreme Court and ask it to split the strata, they may see the sense in playing along. Their refusal to play ball would be good evidence that you have tried to do the right thing and been baulked.

    One word of caution, if you do get a redistribution of unit entitlements, you also get a dimished vote at general meetings.  On the other hand, if you try to split the strata, that will cost money in legal and surveyor fees.

    In short, be careful what you wish for.

    #55762
    Tinka1
    Flatchatter
    Chat-starter

    Thanks for your suggestion, I’m in NSW and assume it’s similar to ACT. I’m optimistic we will have the required attendees to see the poll result favourable to dividing the strata.

    So if we call for a Poll vote at the AGM to divide our strata into 2 it’s  allowable and legal and can proceed without going to a special resolution meeting, or be postponed for voting by all lot owners, am I correct providing we achieve majority of voters present with a 75% in favour.

    #55760
    Sir Humphrey
    Strataguru

    I suggest you could try the approach you suggest. If you don’t get the required vote, then I think most strata legislation has something like the ACT provision I am familiar with, that is, that you can seek an order from the Tribunal (NCAT, ACAT etc) to ‘give effect to a failed motion on the grounds that objection to the motion is unreasonable.’ If your state legislation has such a provision, you could apply for what amounts to a merits review of the motion. If the Tribunal agrees that it was unreasonable for the motion to not have passed, then it can give an order to ‘give effect’ to the motion, that is, an order that you can proceed as if the motion had passed.

    The Tribunal will want you to have tried at a general meeting first. If you try going to the Tribunal first, they will point out that the Act provides a process that is preferable and that it is inappropriate for them to get involved until you have tried putting the motion to a meeting.

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