This article discusses minority lot owners voting rights in strata and how majority owner power can be limited.
Question: In our complex of 31 lots, 19 are held by one lot owner. How to owners with only one lot get a say in decision making?
I am treasurer on a committee of 3 for a complex of 31 where one (1) owner owns 19 of the 31 lots. Of his 19, 18 are undeveloped; however, he still has the liability of the 19 lots as far as fees are concerned.
My question is how do the owners like myself who own only 1 lot get a say in matters when he has the majority of properties? He seems to think whatever he says goes!
Answer: Use the strategy of having two owners on the committee and only having the developer as one of the members
There is a section of the legislation and it depends on how this developer has structured their transactions. If they own more than a certain percentage, they don’t get a full vote. Regarding building defects, the developer can’t vote on course of action to be taken in respect to building defects.
I’ve just seen a good comment in the chat: if you’ve got a committee of three and the developer is only one of those, the other two people who are owners can outvote the developer.
There is a sense that you do need to somewhat get on with him and try and have him on board politically, because it may be easier to deal with him on most things in a friendly way, rather than going at guns at 10 paces because he is a majority owner. I would have to see what the issues are but there is a reduction in the vote for developers who still own more than half of the lots.
Legislation Schedule 1 Clause 14 of the strata Schemes Management Act 2015:
14 Decisions at meetings
- Vote of original owner who owns more than half of lots to be reduced For the purposes of determining an election for officers of the owners corporation or members of the strata committee or appointing a strata managing agent (other than in the case of a poll), if the total unit entitlement of lots of the original owner is not less than half of the aggregate unit entitlement, the value of the vote in respect of the lots held by the original owner is taken to be reduced by two-thirds (ignoring any fraction).
They can’t just lob in all their cronies as strata committee members. I think the strategy that the gentleman put through in the chat of just having two of the owners on the committee and only having the developer as one of the members is important. The Secretary holds all the power in strata committees in New South Wales legislation. They can call meeting, so I’d put yourself on a secretary as well.
This post appears in Strata News #514.
Rod Smith
The Strata Collective
E: rsmith@thestratacollective.com.au
P: 02 9879 3547
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