NSW: Can a strata committee grant exclusive use of common property?

This article discusses exclusive use common property special resolution requirements and how to challenge an invalid committee decision.

Question: Our committee passed a resolution giving away common property for an exclusive use storeroom. Is this correct? How would I go about correcting this.

Recently, the committee passed a resolution giving away part of the common property as an exclusive use storeroom.

I thought this had to be a special resolution put to all members of the building, not just the committee. Is this correct? How would I go about correcting this.

Answer: The legislation specifically requires such a decision to be made by a special resolution at a general meeting.

Under section 33 of the Strata Schemes Development Act 2015 (NSW) an Owners Corporation can transfer or lease part of its common property.

However, the legislation specifically requires such a decision to be made by a special resolution at a general meeting.

It is therefore not a decision that a strata committee could have legally made.

The first step to correcting this is to inform the strata committee or their error and suggest that they set the record straight by passing another resolution rescinding their decision immediately (and perhaps explaining reasons why).

If the strata committee chooses not to do so, then your next step is to make an application to NSW Fair Trading for mediation with the owners corporation. Mediation must be attempted before you can seek orders from the Tribunal (hopefully it does not come to that).

At mediation, you would explain your reasons for the strata committee to rescind their decision and the outcomes you are seeking.

Hopefully by now, the matter is resolved. If not, you will then need to make an application to the NSW Civil & Administrative Tribunal in accordance with section 24 of the Strata Schemes Management Act 2015 (NSW), for orders to invalidate a decision of the owners corporation (and its strata committee). The process should be quite straightforward as the law is clear on this issue.

This post appears in Strata News #511.

Tim Sara
Sara Strata
E: tim@sarastrata.com.au
P: 04 8500 7960