This topic contains 1 reply, has 2 voices, and was last updated by JD Thomson(from Victoria) 4 weeks ago.

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  • #39639
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    Aaron
    Flatchatter
    (from Victoria)

    The OC Committee want to re-purpose part of a common property internal courtyard and build a new office for the Building Manager. There is already an office for the Building Manager, this original office has been present for many years and is on the building plans as a services area. Arguably, IMO, the new office is unnecessary. The old office is expected to continue to be used in some manner as well as the new office.

    We are in Victoria.

    Can the OC Committee sequester and re-purpose common property?

    What process is required to authorise this change?

    #39653
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    JD Thomson
    Keymaster

    Under section 52 and 53 0f the Owners Corporation Act (below), the Owners Corp needs to pass a special resolution to substantially change common property.

    What is a special resolution? Good question! The terms of a special resolution (and an interim resolution leading to  a special resolution) in Victoria are so complicated that I have posted them below for you to read for yourself.

    Good luck!

     

    52. Significant alteration to common property requires special resolution
    An owners corporation must not make a significant alteration to the use or appearance of the common property unless—
    (a) the alteration is—
    (i) first approved by a special resolution at a general meeting of the owners corporation; or
    (ii) permitted by the maintenance plan; or
    (iii) agreed to under section 53; or
    (b) there are reasonable grounds to believe that an immediate alteration is necessary to ensure safety or to prevent significant loss or damage.

    53. Upgrading of common property
    (1) An owners corporation may by special resolution approve the carrying out of upgrading works for
    the common property and the levying of fees on lot owners for that purpose.
    (2) In this section “upgrading works” means building works for the upgrading, renovation or improvement of the common property where—
    (a) the total cost of the works is estimated to be more than twice the total amount of the current annual fees; or
    (b) the works require a planning permit or a building permit before they can be carried out—
    but does not include works that are provided for in an approved maintenance plan or works referred to in section 4(b).

    96. What is a special resolution?
    A special resolution of an owners corporation is a resolution passed by—
    (a) if a ballot or poll is taken, 75% of the total lot entitlements of all the lots affected by the owners corporation; or
    (b) in any other case, 75% of the total votes for all the lots affected by the owners corporation.

     97. Interim special resolutions
    (1) If, at a meeting or by ballot, the vote in favour of a matter requiring a special resolution is at least
    50% of the total votes for all lots affected by the owners corporation and the vote against the resolution is not more than 25% of those votes, the resolution is to be taken to be passed as an interim special resolution.
    (2) If the interim special resolution is passed at a meeting, notice of the interim special resolution and the minutes of the meeting at which the interim special resolution was passed must be forwarded to all lot owners within 14 days of the meeting.
    (3) If the interim special resolution is passed by ballot, notice of the interim special resolution (including the text of the resolution) must be forwarded to all lot owners within 14 days of the close of the ballot.
    (4) The notice under sub-section (2) or (3) must state that the interim special resolution will become a special resolution at the end of 29 days after it was passed unless lot owners who hold more than 25% of the total votes for all the lots affected by the owners corporation petition the secretary against the resolution.
    (5) An interim special resolution becomes a special resolution of the owners corporation on the day that is 29 days after the day the interim special resolution was passed unless lot owners who hold more than 25% of the total votes for all the lots affected by the owners corporation petition the secretary against the resolution.
    Note: The effect of sub-section (5) is that an interim special resolution cannot be acted on for 29 days after it is
    passed and cannot be acted on at all if a petition is received by the secretary within that 29-day period.

    • This reply was modified 4 weeks ago by JD Thomson.
    #39772
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    Austman
    Flatchatter

    Can the OC Committee sequester and re-purpose common property?

    Yes it can.  My committees in Victoria do this fairly regularly.

    But there are limits to what a committee can approve.  Eg a committee can’t approve something that needs a Special or Unanimous vote of the OC.  And it might have a spending limit.

    Many changes to the use of common property pass all of the above.  So it depends on what they are.

    Of interest, it seems that s.52 and s.53 of the OC Act are more do with funding requirements rather than the actual works themselves.  VCAT and strata lawyers have noted that the Special Resolution requirement only applies when an OC itself wants make “significant alteration” to common property.   VCAT has ruled that S.52 and s.53 does not apply when it’s a lot owner that requests the “significant alteration” (although other parts of the Act and the OC rules will still apply).  The reasoning seemingly being that it’s the lot owner that will be paying for that alteration.

     

     

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