I am an elected member of my strata committee. Our strata manager makes immediate decisions on small repairs, but larger repairs are referred to the chair and treasurer for approval. Planning for larger items is handled by the entire committee. Is this correct?

I reported water damage to my ceiling and common wall late last year and further damage a few months later. When I asked whether the owners corporation would take preventative measures to prevent more serious damage, the strata manager said they were waiting on instructions from the chair. Is this usual?

Answer: The strata manager may have an expenditure limit. If the chair (acting within a duly convened meeting) is the point of contact, this may be the most appropriate approach.

The strata manager may have an expenditure limit. If the chair (acting within a duly convened meeting) is the point of contact, this may be the most appropriate approach. However, the overriding concern here is that the owners corporation is under a strict duty to repair and maintain the common property without delay.

To protect your position, take whatever steps you can to mitigate any damage that may be caused to your property.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #747.

Question: What is the process for committee decision making between committee meetings?

I am a committee member in a building of 27 lots. Accountability, transparency to all owners, and correct procedures are very important to me.

Committee meetings are held every two months. In the interim, the secretary emails committee members seeking approval for paying accounts and other issues arising. One recent issue was a request to approve a lot owner’s renovation prior to the relevant by-law registration. If decisions are made by ad-hoc emails, are they considered resolutions?

I have requested that the agenda for upcoming committee meeting include ratifying each decision, including approval dates.

Another committee member argued that these decisions/approvals are resolutions and are not required to be agenda items. They state that the resolutions should be noted in the minutes of the next committee meeting with the date of the decision recorded, and it is not necessary for such decisions to be ratified at the meeting. Is this correct?

Answer: Any majority “decisions” made informally outside a meeting that require resolutions under the legislation should be ratified at subsequent strata committee meetings.

A treasurer will usually, in the exercise of their role, approve payment of invoices and often seek “approval” of other committee members for transparency. It would be unworkable if a committee meeting had to be held to approve payment of every invoice in the day-to-day running of an owners corporation. Approving an invoice for services rendered, for example, is not a decision of a strata committee.

In terms of the other issues arising, a strata committee may only make resolutions in duly convened strata committee meetings or paper ballot votes (in which case a notice must still be issued, and a majority of votes must be in writing and in favour).

Any majority “decisions” made informally outside a meeting that require resolutions under the legislation should be ratified at subsequent strata committee meetings.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in the October 2024 edition of The NSW Strata Magazine.

Question: The owners corporation hasn’t had a meeting for over a year, yet decisions are being made. We have received no meeting notices or minutes. Who is making the decisions?

We have been resident owners in a large apartment complex since the building opened. The owners corporation hasn’t had a meeting for over a year, yet decisions are being made by the “owners corporation” or the “strata committee”. There have been no meeting notices or minutes, and owners don’t know who’s on these committees.

Parking decisions change every month or so, communicated by strongly worded emails from the building management.

The most recent decision was converting the gym into a meeting room, yet again, no one knows when, or how this decision was made and there are no minutes. Can you advise a course of action?

Answer: The decision making process in strata schemes can be quite complex.

The decision making process in strata schemes can be quite complex. However, as a lot owner, you should be able to obtain records in relation to most decisions.

Some decisions may only be made by the owners corporation at a general meeting. For example, it is most likely the decision to change the gym to a meeting room must be made at a general meeting. Electing the members of the strata committee and the office holders is a decision made at the annual general meeting.

Section 18 of the Strata Schemes Management Act 2015 provides that “An owners corporation must hold an annual general meeting once in each financial year of the corporation.” Section 22 provides that you must be given notice of the meeting.

Some decisions may be made by the strata committee without the need to convene a general meeting. This may be the case if a resolution has been passed at a general meeting, providing the strata committee with the authority to make certain decisions. There are also decisions the strata committee is permitted to make under the Strata Schemes Management Act 2015. When the strata committee makes a decision (in the form of passing a resolution at a strata committee meeting), minutes of the meeting should be prepared, and you may have access to the minutes (review the following link in relation to your rights to the minutes: Strata Schemes Management Act 2015 No 50)

If there is a strata manager, the agency agreement may authorise, or there may have been a resolution passed at a general meeting authorising, the strata manager to make certain decisions.

If the owners corporation has engaged a building manager, the terms of the agreement may provide the building manager with authority to make certain decisions.

To obtain records in relation to decisions that have been made, a good starting point would be to make a request to inspect the records of the owners corporation pursuant to section 182 of the Strata Schemes Management Act. It may take some digging; however, if the scheme is being managed correctly, you should be able to source the information you require from an inspection of the records.

For example, when you inspect the records, you may focus on the minutes of the general meetings, the minutes of the strata committee meetings, the strata managers agency agreement and the building managers agreement.

If there is a strata manager, you would make the request to the strata manager. Otherwise, the request should be made to the secretary.

If you are unable to source the information you require from an inspection of the records, and you consider the owners corporation may not hold meetings, may not be keeping records, or if the strata manager or secretary will not comply with section 182, you should obtain advice from a legal practitioner who specialises in strata law.

To be involved in the decisions which will be made in the future, you should enquire with the strata manager or secretary when and where the annual general meeting will be held, or request a meeting be called to elect members to the strata committee, double check your address for service is correct, attend the general meeting, and volunteer your nomination to be elected as a member of the strata committee. To be eligible to be elected to the strata committee you must have paid all your strata levies.

Shane Williamson
Williamson Lawyers Pty Ltd
E: [email protected]
P: 0404 045 605

This post appears in the July 2024 edition of The NSW Strata Magazine.

Question: Our aggressive building manager installed a sign forbidding people to feed cats in our complex’s garden. The owners corporation has not approved the sign. Can I remove the sign?

The building manager has installed a sign forbidding people to feed stray cats on our complex’s garden bench. The building manager has threatened fines and forbids people from taking the sign down, stating the sign is common property. The owners corporation has not voted on the sign, and I feel it is restricting owners access to the bench. As the building manager takes a very aggressive approach to communication, what should I do? Can I remove the sign? Am I best to escalate this situation?

Answer: I would not suggest removing the sign yourself, especially if the building manager is aggressive in their approach.

Any addition, alteration or erection of a new structure on the common property requires a special resolution at a general meeting in accordance with section 108 of the Strata Schemes Management Act 2015.

If there has been no vote on the installation of the sign, it has not been properly authorised and should be removed by the owners corporation. I suggest that you put a motion to a properly convened meeting for its removal and escalate the situation to the strata committee and/or the strata manager.

I would not suggest removing the sign yourself, especially if the building manager is aggressive in their approach.

I would not be concerned in regards to the building manager issuing fines. Only the Court or Tribunal can issue fines through notices to comply and then penalty proceedings.

Matthew Jenkins
Bannermans Lawyers
E: [email protected]
P: 02 9929 0226

This post appears in the June 2024 edition of The NSW Strata Magazine.

Question: How are owner requests usually dealt with? The committee makes decisions via email in our scheme, and responses can take a long time. What is the usual process under the Act?

Our strata manager doesn’t hold committee meetings. They email owner requests to committee members for consideration, and the manager waits for the majority of the committee to reply.

No notice of meetings or minutes are sent to owners. Due to this process, decisions can take a long time, and owners are kept waiting. Is this the usual process under the Act?

Answer: As best practice, items such as renovations and works over $5,000 should be determined at a duly convened strata committee meeting.

Can I suggest the client check their strata agency agreement? The strata manager may have the delegation to perform these duties under their agreement without needing to seek further approval/input from the strata committee. The email to the strata committee may be out of courtesy.

If there isn’t the delegation under the strata manager’s agreement, the strata manager is most likely able to take instructions on matters from the secretary.

I agree that items such as renovations and works over $5,000 should be determined at a duly convened strata committee meeting as best practice. That is what we do in our strata schemes.

Rod Smith
The Strata Collective
E: [email protected]
P: 02 9879 3547

This post appears in the February 2024 edition of The NSW Strata Magazine.

Question: A resolution was passed to replace air conditioning units and limit the hours of use. Many owners are not happy. Can we do anything to reverse the decision?

At the EGM, three attendees passed a resolution to replace air conditioning units for a commercial building. The air conditioning units will only run 9 am – 5 pm on weekdays.

I own two commercial lots in the building. I run an after school care business, which mainly runs outside of business hours.

Many of the 25 lot owners are unhappy with the resolution and the ridiculous quoted price. In addition, my levy costs for this installation are disproportionately higher than all other lot owners.

I have tried discussing the matter with our strata management, but they say they are following the law. Can we do anything to reverse the decision?

Answer: If a majority of owners do not agree with the decision, those owners whose unit entitlement are at least one quarter should make a qualified request for the owner corporation to convene another general meeting.

If the hours of operation of the air conditioning units are being changed, it arguably requires a special resolution under section 108 of the Strata Schemes Management Act 2015.

If a majority of owners do not agree with the costs to replace the air conditioning units, or their hours of operation, those owners whose unit entitlement are at least one quarter should make a qualified request for the owner corporation to convene another general meeting. They should request motions on the agenda to overturn the previous decision.

If the motions were resolved by ordinary resolution, an ordinary resolution is required to reverse the decision. Similarly, if the motions were specially resolved, they will require a special resolution to overturn.

Any levies raised for the common property air conditioning units must be raised in accordance with the schedule of unit entitlement.

Matthew Jenkins
Bannermans Lawyers
E: [email protected]
P: 02 9929 0226

This post appears in the December 2023 edition of The NSW Strata Magazine.

Question: What process should be followed to erect signage on common property? Should signage be decided on by the owners corporation or the committee?

Our committee has erected direction, delivery, and behaviour signs on common property without any reference to the owners corporation. Some owners object to the signs, stating they are unnecessary and/or inappropriate.

Should committees have a special resolution to erect signs on common property?

Answer: The key phrase to consider is whether the signage would be “improving or enhancing the common property”.

Section 108 of the Strata Schemes Management Act 2015 (NSW) stipulates that an owners corporation “may add to the common property, alter the common property or erect new structure on common property for the purpose of improving or enhancing the common property”.

The key phrase to consider is whether the signage would be “improving or enhancing the common property”.

If so, the legislation goes on to require such addition, alteration or erection of structure by way of a special resolution in a general meeting (which the strata committee cannot do).

One could consider that the signs are placed to improve or enhance common property as they are usually a reminder of rules (by-laws, etc.) that govern the property.

Generally, you are either improving/enhancing or repairing/maintaining. One would interpret new signage to be an improvement or enhancement to what is (or is not) there already.

Tim Sara
Strata Choice
E: [email protected]
P: 1300 322 213

This post appears in Strata News #664.

Question: Years ago, a decision was made to only plant drought tolerant hedges. Without consultation, the committee removed hedges and planted flowers. Does the committee have the authority to make this change?

Can a strata committee alter the appearance of common property without the approval of owners corporation? At an AGM several years ago, owners voted to only have hedges in the gardens of our 64-unit complex. The hedges were to be maintained by a gardener.

There were several reasons for the decision, one of which was the responsible use of water. Without consultation, the current committee removed hedges and planted flowers. I wrote to our strata manager with my concerns and requested the strata manager advise the committee of the original AGM vote.

The original minutes were archived, so I requested my email with details of the owners corporation vote be forwarded to the committee as they were holding a committee meeting that night. Although the topic was not on the agenda, I asked if it could be discussed and a response included in meeting minutes so owners could be informed.

The strata manager forwarded my email to the committee advising their intention to continue planting flowers. The topic did not appear in minutes. What can I do?

Answer: If the strata committee is fulfilling the owners corporation’s repair and maintenance functions, no special resolution may be required.

A special resolution is required to alter the common property. However, if the strata committee is fulfilling the owners corporation’s repair and maintenance functions, no such special resolution may be required. It may be that the hedges were invasive and were causing damage to the common property, and flower beds were recommended in lieu.

You may wish to proceed to mediation with the owners corporation, a free service through NSW Fair Trading. If the owners corporation declines to attend or no agreement is reached regarding the hedges/flowers, you can make an application for orders through the NSW Civil & Administrative Tribunal. Before escalating the matter, we recommend you seek legal advice.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #663.

Question: If window replacements in our building have the potential to affect privacy of my courtyard, is it possible to request this be taken into consideration during the decision-making process for the work?

Our building is replacing double hung windows with awning windows.

My lot is the only one in the block with a courtyard. Some of the windows on the first floor overlook my courtyard.

I’m concerned about lack of privacy once the new windows are installed. Can I request that the windows overlooking my courtyard remain as double hung windows or have translucent screens installed?

Answer: You can approach your owners corporation, but they do not appear to be under any duty to accommodate your wishes.

Although we are not lawyers, we understand there is no general common law right to privacy in New South Wales.

Unfortunately, there will be competing interests in the uniformity of the building and your wish to preserve your privacy.

You can approach your owners corporation, but they do not appear to be under any duty to accommodate your wishes. Further, the owners corporation may have council approval authorising the installation of the awning windows.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in the September 2023 edition of The NSW Strata Magazine.

Question: I have purchased in a four lot strata scheme. The owners of two other lots are related and band together for a majority vote. Is this legal? What can I do?

I have purchased a unit in a four lot strata scheme. An individual owns the largest unit in the block, and his son-in-law owns another unit. Together, they own 51% of the block, granting them the majority of voting power at 51%. At the AGM, the son-in-law gives his proxy to the father-in-law. Is this legal?

I will never have the opportunity to participate in the decision making processes while they hold the decisive vote. This situation feels particularly inequitable since I was unaware of their relationship before I purchased in the block.

Answer: Speak to the other owners and try and work with them.

Unfortunately, there would have been no way to ascertain the relationship between the owners prior to purchasing. A pre-purchase inspection would have unlikely to have shown anything. Perhaps a review of the minutes over the course of a number of years may have shown a trend of one lot owner always providing their proxy to another owner. It is a similar situation where there is no relationship, and one owner provides their proxy to another owner.

Yes, it is legal, as there is no prohibition of providing a proxy to a family member.

In any general meeting, votes are calculated in one of three ways.

Ordinary resolution – requiring majority (either per lot or unit entitlement);

Provided all owners attend and vote, you cannot outvote the majority and cannot prevent an ordinary resolution from being passed

Special resolution – not more than 25% of the unit entitlement voting against a motion;

Depending on your unit entitlement and the number of owners who attend and vote, you may be able to prevent a special resolution from being passed.

Unanimous resolution – no votes against.

You can prevent a unanimous resolution being passed.

If the owners corporation is not complying with its legislative requirements or the majority is making decisions that it should not be making, there are options through mediation in the Office of Fair Trading and/or NCAT proceedings.

In the first instance, I would speak to the other owners and try and work with them. You never know. They may be reasonable and like-minded.

Matthew Jenkins
Bannermans Lawyers
E: [email protected]
P: 02 9929 0226

This post appears in Strata News #658.

Question: We have four owners. Three are residents, and one is an investor. Who are the members at the meetings? Are all owners members, or only elected members?

Answer: At strata committee meetings, only elected members vote and make decisions.

If it is a general meeting of the owners corporation, all owners are automatically members with voting rights (provided they are financial). At strata committee meetings, only elected members vote and make decisions though you may attend (but not address the meeting unless authorised by resolution of the strata committee to do so).

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #654.

Question: We have an old numbering system on the common property fence of our strata scheme. Can an ordinary resolution be used to approve the replacement of the street number or can the owners corporation pay for and maintain the signage with an ordinary resolution?

Answer: Is it an improvement or enhancement to the common property?

The test for whether this is a special or ordinary resolution is whether the works relate to the owners corporation’s repair and maintenance function –v- an improvement or enhancement to the common property.

If the “signage” is being replaced because it has fallen into disrepair, then an ordinary resolution will suffice. However, if the signage is in good working order but the owners corporation wishes to improve or modernise its appearance, then that requires a special resolution.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #643.

Question: How do we stop a lot owner, who is not on the committee, from meddling in the affairs of the owners corporation?

We have a lot owner who is not a member of the strata committee or holding any position. They take actions concerning the strata scheme such as:

overriding a decision made by a strata committee / sub committee regarding the number of bins. They contacted the council and had bins delivered, though we have space restrictions.

forwarding information to our insurance company about a current internal dispute being addressed by the committee. Providing the insurance company with hearsay and incorrect information.

Answer: This is not unusual. Have your strata managing agent or strata committee write to the interfering owner and ask him to cease and desist.

Only the strata committee or owners corporation in a duly convened meeting can actually make decisions on behalf of the owners corporation. Office-bearers have their designated roles.

Despite the above, however, it is not uncommon for individual owners to take it upon themselves, without authority, to meddle in the affairs of the owners corporation (sometimes to the detriment of the owners corporation as a whole).

You should have your strata managing agent or strata committee write to the interfering owner and ask him to cease and desist.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in the March 2023 edition of The NSW Strata Magazine.

Question: Our owners corporation has received a request from the development next door to place scaffolding on common property and across two private car parks. They have offered to pay compensation. How do we deal with something like this?

Our owners corporation has received a request from the development next door to place scaffolding on common property and across two private car parks. I am the owner of one of those car parks. The owners corporation has contacted owners to ask how much ‘compensation’ we would accept for being unable to use our carpark for 15 weeks. The committee are also discussing the compensation they will accept in exchange for the scaffolding on common property.

The owners corporation has stated that, as there will not be a “change” to the common property, no special resolution is required. When I queried them about entering a lease without a special resolution, I was told the committee had “not presented to enter into a formal lease or deed of access” and therefore the matter is being handled by the strata committee.

Can the strata committee really rent out common property with no contract for an undisclosed sum without the owner’s knowledge or agreement?

Answer: Usually, the best option is to negotiate an access deed with the developer.

This question about access requested by the developer next door for scaffolding access raises 3 issues – access to private car spaces, compensation and special resolutions.

The private car spaces and their airspace are not common property but lot property, so the owners corporation does not have the power to grant anyone access to them. In order to access land for scaffolding or anything else, the developer needs to come to an arrangement with the owner of the land where access is sought. In this case, as part of it is common property and part is lot property, the developer needs to come to an arrangement with those 2 owners and the owners corporation.

If no arrangements can be reached, the developer can apply to the local court for access orders (under the Access to Neighbouring Lands Act 2000). When doing so, the developer would usually have to pay the legal costs of the other party (in this case the 2 owners and the owners corporation), as well as their own legal costs, but will not have to pay any compensation unless there is actual financial loss. Compensation is not payable for inconvenience. If those 2 units are owner occupied, the court would be unlikely to order compensation. However, if one is rented and the rent had to be reduced due to the car space being out of action for a period, there is actual financial loss for which compensation would be payable.

Under section 112 (1) of the Strata Schemes Management Act 2015, a special resolution at a general meeting is needed to grant access to the common property, including by licence. The strata committee does not have the power to deal with this.

We have assisted with many of these types of matters, and usually, the best option is to negotiate an access deed with the developer. The developer would usually pay the owners’/owners corporation’s legal costs (it is cheaper than going to court) and you might be able to convince them to pay some compensation, as a settlement deed is quicker, cheaper and more certain than legal proceedings.

When we run these matters, the first thing we usually do is ask the developer for some money into our trust account, so owners/owners corporations are not out of pocket if it doesn’t proceed.

James Moir
Madison Marcus
E: [email protected]
P: 02 8022 1222

This post appears in the February 2023 edition of The NSW Strata Magazine.

Question: Our Committee has been requested to investigate naming our building. What’s the best and fairest way to involve everyone in the naming process? What else do we need to consider?

A resident recently suggested that it would be nice to give our NSW strata building a name. It currently just has a street number. Many others share this view and have requested that our SC look into the appropriate procedures.

It is generally acknowledged by a significant number of unit owners that giving our building a name portrays character, can lift its persona and potentially make the property more desirable for owners wanting to sell or invest. The SC is therefore keen to make this work for the benefit of all.

Acquiring then affixing an attractive nameplate is certainly not maintenance, and arguably not a capital works expense either.

To gain support and bring our community together, our initial concept was to have a naming competition, inviting supportive resident owners to suggest suitable names, before finalising a short list to vote on at the next AGM. This would be a positive procedure where everyone could contribute. There is regrettably a small minority that, regardless of any justification, see this intuitive as nothing other than a divisive and worthless scheme to squander finite funds on an unnecessary absurdity.

Has anyone defined a practical way to introduce constructive ideas like this, without fuelling the usually highly vocal and disruptive arguments of a small negative minority?

Answer: Once a name has been chosen, bear in mind that a special resolution will need to be passed for the “erection” of the sign/”addition” to the common property.

We have not encountered such an initiative but your proposed process seems like a sensible approach.

Once a name has been chosen, bear in mind that a special resolution will need to be passed for the “erection” of the sign/”addition” to the common property. We recommend you also contact local council in case they have any requirements/restrictions in relation to your proposed course.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in the December 2022 edition of The NSW Strata Magazine.

Question: The Strata Committee accepted a $13,000 contract for landscaping work without approval. Can the contract be ratified? If so, how?

The Strata Committee accepted a $13,000 offer from a landscaper to carry out landscaping work without informing anyone and without minuting the deal. The contract involved altering common property without the owners corporation approval.

When this became known, the strata committee broadcast that it had renegotated the deal so that none of the work involves common property. We are not certain that the renegotiation took place. We’ll have to check with the contractor.

However, we still have an unapproved $13,000 contract. Can the contract, in its renegotiate or previous format form, be ratified? If so how?

Answer: A decision of the strata committee can generally be ratified by a later meeting of either the strata committee or by the owners corporation at a general meeting.

A decision of the strata committee can generally be ratified by a later meeting of either the strata committee (if the decision is within its power) or by the owners corporation at a general meeting. In this case, if the common property was altered not in the course of repairs then I suggest a general meeting be called to ratify the decision and to enable the owners corporation to approve the change to the common property.

Allison Benson
Kerin Benson Lawyers
E: [email protected]
P: 02 4032 7990

This post appears in Strata News #605.

Question: Does the strata Committee have the right to place religious icons such as Buddhas around the common area without all lot owners’ permission or informing all lot owners of their intentions? If this offends a lot owners’ religious beliefs, should the icons be removed?

Answer: We have two very different concepts – strata and religion – coming together in one place and I doubt our legislators ever anticipated that.

Looking at this scenario with a pure strata hat on, in Queensland, for example, the committee may have the ability to make what could be termed an ‘improvement’ (noting here that ‘improvement’ isn’t necessarily a judgement or aesthetic call, it is about addition or removal) to common property and without reference to all owners. In other jurisdictions, that ability might also exist, it may differ or it might not exist at all, and so you would need to clarify that before determining if the ‘right’ process has happened here. I am not aware of any strata legislation requiring a committee to canvass the views of owners on religious issues, in making a decision.

Looking at this scenario from a values and beliefs basis, you say there may be offence taken from the symbols. There are many different religions and they all usually have very different symbols and iconography. Those religions exist in our culture, often in close proximity to each other. If you walk past a church and its symbols ‘offend’, what do you do? Are you in a position to demand their removal? Generally, I’d think the answer is no. Should it be different in strata?

My point is that here we have two very different concepts – strata and religion – coming together in one place and I doubt our legislators ever anticipated that. Which means there is no clear answer to your query. To help inform, I would suggest that if you or anyone else have concerns about this situation they might like to approach the relevant government agencies which deal with human rights and discrimination issues, to see what, if any, legislation might apply. Legal advice might also need to be sought. Otherwise, this situation might have to be dealt with on purely strata lines and if there is a view that proper strata process has not been followed in these ‘improvements’, there are dispute resolution options available.

Given the sensitivities likely involved in this situation, one would want to be very careful before embarking on that path. Some informal communications, such as articulating concerns in an appropriate (and respectful) way and having a discussion about them, might be a better option, at least to begin with.

Chris Irons
Strata Solve
E: [email protected]
P: 0419 805 898

This post appears in Strata News #578.

Question: At our AGM, a special levy was approved to replace aged windows. An owner has since challenged the decision and is seeking to have it overturned. What are the chances the decision will be overturned and if so, how do we fix the damaged windows?

I’m in a strata lot of 12. I’m the current secretary of the Strata Committee. We are in a 1960s building and have original windows which are in terrible condition and need replacing.

We held an AGM and EGM last year and the raising of a special levy was approved. Only 3 owners attended the EGM but it was an unanimous vote at the EGM. My understanding is that it requires a majority vote for a general resolution so this should be sufficient.

The levies will take 2 years to collect.

After the first levy was issued, we received a complaint from 4 of the owners asking for another EGM and for the levy to be overturned. One of those owners has previously had their windows replaced without the approval of the OC and they are unwilling to pay again.

Given this is a necessary repair and the levy was approved according to legislation, what are the chances this will be overturned (either at an EGM or NCAT). And if it is, what is our recourse to fix the damaged windows?

Answer: If an owner is unhappy with the outcome of a decision made at a general meeting, they have a few options.

Overturning decisions of the owners corporation

If an owner is unhappy with the outcome of a decision made at a general meeting, they have a few options they can take.

Option 1 – Submit a motion to revoke the decision

An owner can require the Secretary to include a motion in the agenda of the next general meeting, in accordance with schedule 1, clause 4 of the Act, to revoke the previous decision. It’s quite common for the Strata Managing Agent to be delegated the powers of the office bearers (including the Secretary), so the requirement can probably be made to them as well, and they should be able to assist you in drafting a motion.

The requirement must be made in writing and set out the motion, the name of the person making the requirement, and include an explanatory note of up to 300 words.

If the original decision were made by ordinary resolution, the motion to revoke that decision would also require an ordinary resolution. If the decision was made by a special or unanimous resolution, it could only be revoked in the same way (as noted in section 21 of the Act).

The original decision is only revoked if the motion to revoke it is carried. Until then, the original decision is valid and can be acted upon, so the next option may be necessary.

Option 2 – Arrange a qualified request for a general meeting

Whilst an owner can require a motion for the next general meeting – that could be some time away. The Secretary only has to keep the motion until they decide to convene the next general meeting.

If the Secretary is not convening a general meeting soon, an owner can arrange a qualified request in accordance with section 19 of the Act.

To make a qualified request, one or more lot owners of lots that have a total unit entitlement of at least one-quarter of the aggregate unit entitlements have to make the same request. The request often comes in the form of a written requisition (such as a petition). It should state the motion(s) being demanded.

Once a qualified request is made, the Secretary has 14 days to convene the general meeting with the motion(s) that have been required.

If the Secretary fails to do so, an application can be made to the Tribunal under section 20 of the Act for the Secretary or someone else to convene the meeting.

Option 3 – Seek orders from the Tribunal invalidating a resolution

Section 24 of the Act allows an owner to apply to the Tribunal for orders to invalidate a decision made by an owners corporation. However, the Tribunal must be satisfied that the Act or Regulations have not been complied with in relation to the meeting that was held. Furthermore, the Tribunal does not have to make an order if:

the failure to comply did not adversely affect anyone, or

if compliance still would not have resulted in a failure to pass the resolution.

For example, if insufficient notice was given for the meeting, but the person making the application for orders invalidating the decision was able to attend the meeting and vote anyway, the Tribunal would likely decide that the outcome would not have been any different had the law been complied with.

An owners corporation’s duty to repair and maintain common property

Owners Corporations have a strict duty under section 106 of the Strata Schemes Management Act 2015 (NSW) (‘the Act’) to repair and maintain the common property.

If somehow, the owner was able to overturn the decision to raise levies and repair or replace the windows in this scenario, you could apply to the Tribunal for orders under section 232 of the Act, requiring the owners corporation to undertake the repairs.

Tim Sara
Strata Choice
E: [email protected]
P: 1300 322 213

This post appears in Strata News #573.

Question: The committee would like to replace all windows and sliding doors simply to update the colour from brown to black. If this decision is adopted, do all lot owners need to upgrade?

Some of the owners corporation committee would like to replace all windows and sliding doors from mission brown to black. There is nothing wrong with the windows and doors apart from the unpopular colour. Is it compulsory for us to go ahead with this very expensive renovation of the building?

If the committee decide to aesthetically improve the windows and doors and this is not based on a need to repair and maintain the building, is everyone in the building required to have their windows and doors changed and pay for the upgrade regardless of whether that individual lot owner wants to make the change or not?

Answer: The Owners Corporation needs to pass the special resolution, and, if it passes, yes, all owners are liable to contribute to the costs whether they are in agreement or not.

No, the strata committee cannot make that decision. The Owners Corporation needs to pass the special resolution, and, if it passes, yes, all owners are liable to contribute to the costs whether they are in agreement or not.

The decision could be challenged, but only if due process was not complied with. The Owners Corporation is at liberty to alter the common property for the purpose of improving or enhancing it pursuant to Section 108 of the Strata Schemes Management Act, 2015 (NSW) by special resolution.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in the May 2022 edition of The NSW Strata Magazine.

Question: A Strata Committee member proposes to take a dispute to NCAT. What percentage of Committee members must agree to permit this? It is a simple majority or 75%? Should all owners have a voice?

Answer: This would be a decision to be made by a majority of the Strata Committee.

This would be a decision to be made by a majority of the Strata Committee. This should be made at a formally held Strata Committee meeting and the manner of voting is specified as per Schedule 2, section 9 of the Strata Schemes Management Act 2015 as detailed below.

NSW Civil and Administrative Tribunal (NCAT) would consider the minuted decision of the Strata Committee as sufficient authority as they make the day to day decision of the Owners Corporation. Further to this the owners have an ability under Section 9 of the Strata Schemes Management Act 2015 to oppose this being considered by the Strata Committee.

9 Decisions at meetings

Voting at meetings – A motion put to a meeting is to be decided according to a majority of the number of the votes cast for and against the motion by the members present …

…

Decisions to have no effect if opposed by more than specified owners A decision of a strata committee has no force or effect if, before the decision is made, notice is given to the secretary of the owners corporation by one or more owners, the sum of whose unit entitlements exceeds one-third of the aggregate unit entitlement, that the making of the decision is opposed by those owners.

…

Robert Fothergill
Strata Life
E: [email protected]
P: 02 9456 9917

This post appears in Strata News #559.

Question: We live in a secure gated community. Some owners want the gate to remain open during the day. Would the decision require a special resolution of the owners corporation, or can the decision be made by the Strata Committee?

Answer: The strata committee cannot make this decision, because the owners corporation is charged with the duty to manage and control the use of the common property.

You may have a by-law applicable to your scheme for security which regulates the keeping of all gates/doors etc closed except when in use, in which case, you would need to amend the by-law to keep the gate open during the day.

If there is no such by-law, you should create one for the keeping open of the gates (via special resolution). In our view, the strata committee cannot make this decision, because the owners corporation is charged with the duty to manage and control the use of the common property.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #557.

Question: Can a special resolution passed at an AGM/EGM be challenged if it adversely affects some owners.

Answer: Depending on the reasons, a decision of the owners corporation can be challenged in NCAT for a variety of reasons.

Yes. Depending on the reasons, a decision of the owners corporation can be challenged in the NSW Civil and Administrative Tribunal (NCAT) for a variety of reasons.

Order invalidating resolution of owners corporation

Section 24 of the Strata Schemes Management Act 2015 (‘the Act’) provides that the Tribunal can invalidate any resolution if the Tribunal considers that the provision of the Act or regulations have not been complied with in relation to the meeting. The Tribunal may refuse to make an order if that failure did not adversely affect any person and compliance with the provision would not have resulted on a failure to pass the resolution.

Order where voting rights denied or due notice of item of business not given

Section 25 of the Act provides that the Tribunal can nullify a resolution if a person entitled to vote on a motion was denied a vote on the motion or was not given due notice of the item of business. Again, the Tribunal must not make an order unless satisfied that the resolution would not have been passed but for the denial or proper notice given.

Orders to settle disputes or rectify complaints

Section 232 of the Act provided the general power for the Tribunal to make orders to settle disputes and may, depending on the reasons be the section relied upon if an owner or owners are seeking to challenge a resolution.

Matthew Jenkins
Bannermans Lawyers
E: [email protected]
P: 02 9929 0226

This post appears in Strata News #554.

Question: Our 4 lot scheme is split evenly between two lot owners. The other owner continually sends emails to both me and the strata manager, wasting time about trivial matters. Do I have to continually reply to emails or can I withhold comments until the AGM?

My husband and I own two units in a 4 unit block. The other two lots are owned by a single lot owner. All units are rented out to tenants.

The other owner continuously finds problems with small things. They send at least 6 emails in the space of an hour and continues to waste the time of our Strata Manager and contractors getting various quotes which we can’t afford . This never ending correspondence causes me emotional stress.

Do I have to continually reply to emails or can I withhold comments until the AGM?

Answer: You could allow for matters not urgent to come back to an EGM or AGM.

Majority rules in strata and so a majority of the Committee and/or owners can instruct the strata managing agent how to operate. If there is additional cost for the time the strata manager is spending then detailed instruction can be provided on how to deal with matters arising in a more structured way.

Assuming both you and the other owners are represented on the Strata Committee then you only have one vote each and a majority decision would not be reached when voting on matters month to month.

Restrictions can be placed on the Strata Committee at your Annual General Meeting as detailed under Schedule 1 section 9 (i) – a form of motion to decide if any matter or type of matter is to be determined by the owners corporation in general meeting. The Act requires that a motion must be considered at each Annual General Meeting where the owners can place a restriction on the Committee and that could allow for matters not urgent to come back to an Extraordinary General Meeting or Annual General Meeting.

In your circumstances when there are split votes this could potentially be more complex to achieve but you could consider your unit entitlement allocated to each unit and your voting rights at a general meeting to determine who has the majority vote.

Robert Fothergill
Strata Life
E: [email protected]
P: 02 9456 9917

This post appears in Strata News #551.

Question: During closed-door meetings, the committee vote on each agenda item frequently without costings or reasons for decisions. As an owner, what can I do?

The chair of the Strata committee enforces the ‘owners cannot interrupt’ rule. All decisions are made behind closed doors before the formal Strata Committee meeting.

These closed-door meetings result in an affirmative or negative vote on each agenda item frequently without costings or reasons for decisions. These meetings have not been classified as ‘ subcommittee’ meetings.

If an owner wants to make a comment, can the comment be added to the agenda by way of a motion after it has been issued? Once the agenda is issued, I thought it couldn’t be altered.

What can I do about both issues?

Answer: As an owner you have rights to block the strata committee from considering a matter.

Under the strata legislation, non-members of the Strata Committee may attend a meeting of the strata committee but are not entitled to address the meeting unless authorised to do so by resolution of the strata committee. “Subcommittee” meetings are not recognised under the strata legislation.

You are correct that agendas may not be amended once issued, however, as an owner you have rights to block the strata committee from considering a matter if you have support from other owners and together you have unit entitlements which exceed 1/3 of the aggregate unit entitlement) (Sch 2, Section 9(3)) and if you give notice to the secretary of the owners corporation that you oppose the decision before the decision is made. An alternative approach would be to requisition motions at the owners corporation/general meeting level which would supersede a decision of the strata committee.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #527.

Question: In the AGM last year, we all voted to have a defibrillator. The chairman and secretary voted against it and in every meeting since have decided to ask a lawyer their legal rights and are digging their heels in. Can they do this?

Answer: It may be that the strata committee is seeking clarification for the proper procedure to implement its AGM decision.

A decision made by an Owners Corporation may be rescinded but this does not appear to be the case here. It may be considered prudent that the strata committee has sought legal advice as to the potential liability/insurance implications of having a defibrillator onsite before installation of same. This addition to the common property will also likely require a special resolution and it may be that the strata committee is seeking clarification for the proper procedure to implement its AGM decision.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #517.

Question: Two Committee members made changes to common areas without any vote and used the common seal without approval. What process should have been followed?

We are a strata of 3 townhouses. Is it illegal for 2 committee members/owners to use our strata’s common seal representing the Owners Corporation without having put the use of this to a vote?

2 owners completely cleared half of the common lot garden without any vote/special resolution and had used the common seal on a local council’s forms in case removal of trees was investigated. We had no knowledge about their plan to do any of this work or use the common seal. They are calling the clearing and reestablishment of the common lot gardens their private “project” and expect it to come out of strata funds.

Answer: An Owners Corporation can only make decisions through general meetings or strata committee meetings.

An Owners Corporation can only make decisions through general meetings or strata committee meetings and affix the common seal to documentation pursuant to such decisions having been made and in accordance with the strata legislation. The “clearing” appears to be over and above the repair & maintenance function of the Owners Corporation and would likely have required a special resolution for the “improvement” or “enhancement” carried out.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #517.

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.

Rod Smith
The Strata Collective
E: [email protected]
P: 02 9879 3547

This post appears in Strata News #514.

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.

Tim Sara
Strata Choice
E: [email protected]
P: 1300 322 213

This post appears in Strata News #511.

Question: I’ve asked if my late fee charges can be waived and the strata manager states the request must be considered by the owners corporation via a meeting, which I may have to pay for. Is this correct?

Due to some unfortunate circumstances over the last 2 years, I have been late in paying levies and whilst they are always paid despite being late, have accrued both late fees and interest which I did not notice. This has resulted in an arrears amount of $182 to date. This amount is made up of purely fees and not levies.

I asked the Strata Manager if, under the circumstances, this could be waived. The Strata Manager advised that an AGM has to be called to ask the Owners Corporation and if an EGM is called instead, it will be at my cost ($396 + disbursements). I find this excessive.

For a request of this nature, why does it necessitate any type of GM? Can it not just be decided amongst the Owners Corporation informally, as it’s a circumstantial one-off request?

Answer: There is no informal decision making capabilities by the Owners Corporation only at a General Meeting

With decision making in Strata there are only three ways that decisions can be made which are:

by the Owners Corporation at a General meeting,

the decision of the Strata Committee at a meeting and

under delegated authority by an appointed strata manager.

The amount of interest is dictated by Section 85 of the Strata Schemes Management Act 2015, included below for ease of reference. This section also specifies that it is the Owners Corporation that has the ability to waive that interest. There is no informal decision making capabilities by the Owners Corporation only at a General Meeting so the strata manager is correct in that regards.

There is of course an option for you of requesting a motion on the Annual General Meeting if you have one coming up.

I would suggest though that the $182 is not just interest but also fees payable by you for late notices being issues which is common in the strata profession. These fees will be prescribed by the strata managers Agreement/Contract.

Some strata managers are willing to waive these fees, if for example the individual has not previously been late in payment, but there is nothing dictated in the Act in regards to these fees.

85 Interest, discounts on contributions and payment plans

A contribution, if not paid when it becomes due and payable, bears until paid simple interest at an annual rate of 10% or, if the regulations provide for another rate, that other rate.

Interest is not payable if the contribution is paid not later than one month after it becomes due and payable.

However, an owners corporation may by resolution determine (either generally or in a particular case) that a contribution is to bear no interest.

An owners corporation may, by resolution at a general meeting, determine (either generally or in a particular case) that a person may pay 10% less of a contribution levied if the person pays the contribution before the date on which it becomes due and payable.

An owners corporation may, by resolution at a general meeting, agree to enter into payment plans, either generally or in particular cases, for the payment of overdue contributions. A payment plan is to be limited to a period of 12 months but a further plan may be agreed to by the owners corporation by resolution.

The regulations may prescribe requirements for payment plans.

The existence of a payment plan does not limit any right of the owners corporation to take action to recover the amount of unpaid contributions.

The Tribunal or a court may, on application by an owner, order that no interest is chargeable on a specified contribution if the Tribunal or the court is satisfied that the owners corporation should reasonably have made a determination not to charge interest for the late contribution.

Robert Fothergill
Strata Life
E: [email protected]
P: 02 9456 9917

This post appears in the September 2021 edition of The NSW Strata Magazine.

Question: How do we force a decision in a 4 unit, self-managed complex? There are always 2 for and 2 against.

Answer: Strata is a democracy and it comes back down to a vote.

Generally a four lot scheme can create more work than a 400 lot scheme because of that one reason where you just continue to get into deadlocks. It’s very common. Strata is a democracy and it comes down to a vote. Unfortunately, when you’re in a four lot scheme, you can’t get that majority vote and you’re in a deadlock.

I basically say that if the decision relates to something that is an obligation of an Owners Corporation, so if it’s e.g. requirement to repair common property, which is a requirement under Section 106, of the Strata Schemes Management ACT, then you can force a decision through NCAT.

However, if it’s a deadlocked decision on something that is not an obligation of the Owners Corporation, then the matter remains unresolved. You could take NCAT, but you’re going to have to have grounds on why you’re forcing it.

I’ll give some examples:

If there was a failed water membrane, and it was leaking, and you had a deadlock, where two owners wanted to repair the membrane and two owners didn’t, it’s a deadlock. I would definitely take that to NCAT. Because an Owners Corporation has an obligation to repair that failed membrane under Section 106. So it’s not really a choice. It’s something that you have to do i.e. it’s an obligation. And I think you’d be successful in having that pursued in NCAT.

If on the other hand, is the situation was, ‘We think that the carpets are dated, and although they’re in good condition we want to replace carpet with tiles in the lobby’. That for me is an upgrade. It would be very difficult to force upon other owners that are against it because that’s more of an upgrade as opposed to an obligation.

So I think the short answer is where you feel that the decision is an obligation of the Owners Corporation to meet the obligations under the Act for repairing and maintaining or any other type of obligation, you can force that decision through NCAT but if it’s a simple decision about wanting to upgrade or altering common property in any way just to enhance the common property, then I don’t think you can force that decision. Unfortunately, it’s a democracy. If you don’t have the votes, it ends up being a deadlock and the matter remains unresolved.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #499.

Question: When our strata manager emails for a decision, all committee members are not aware of who has voted and how. Should we be aware of the decision making process?

We have five members on the owners committee. An email by our Strata Manager is sent to all members to decide on something like approvals for maintenance on property or common area. Only one or two members vote by return email and CC the Strata Manager and the remaining members so everyone can see their vote & comments.

When the Strata Manager then approves or disapproves a job we have no idea if the other three members have voted individually or as a group or what they have voted and when asked, the Strata Manager refuses to disclose the information.

If some members vote no, is a reason required as to why they have voted no? Should the Strata Manager be upfront about who has actually voted and allow the other members to see all replies?

If a member phones the Strata Manager and votes should this information be recorded in writing for other members to see? Also, I believe one of the members is voting from himself & for another person (who can’t be bothered to vote), so effectively he is putting in two votes.

What is the correct way of documenting this process?

Answer: Technically, if the strata manager has authorisation in their agreement, they do not need to have sought approval in the first place

A strata manager’s agency agreement would typically provide:

A list of services (such as arranging repair and maintenance); and

Whether they are authorised to undertake those services with or without instruction from the owners corporation.

If they are authorised to arrange the works without the need for approval, they may be informally checking in with the strata committee before arranging the works as a courtesy. However, if they are, then best practice would be to only act on the instructions of a majority of the strata committee, and to receive those instructions in writing so they can form part of the owners corporations records. However, technically if the strata manager has authorisation in their agreement, they technically do not need to have sought approval in the first place.

Suppose their agreement does not authorise them to arrange the works without approval from the owners corporation. In that case, the matter should be decided upon formally at a strata committee meeting so that the correct legal procedures are followed (such as the ability for owners to veto decisions of the strata committee in accordance with Schedule 2, clause 9(3) of the Strata Schemes Management Act) and to ensure transparency of voting as well.

Tim Sara
Strata Choice
E: [email protected]
P: 1300 322 213

This post appears in Strata News #485.

Question: A majority lot owner holds over one fifth of the lots in our building. He gets away with unnecessary spending due to his lot entitlements. How do we stop this?

I live in Newcastle and my wife and I own a unit in a 90 unit complex. I recently attended a special meeting regarding budgets and the setting of levies to repay debt from a loan taken out for remedial fire repair works. There are several big spends in the future capital works budget for lobby redesign / painting / carpet upgrade etc that total $400K over 10 yrs.

This area is used by the building manager who owns around 20 apartments. He is also the treasurer. He has put forward motions for these spends and the majority of us wish to vote no to the spending as it is primarily for his benefit as he short term lets his apartments. He gets away with this unnecessary spending due to his lot entitlements.

What course of action do we have as the unnecessary spending has caused levies to increase by 50% and also caused some owners financial distress. Several owners have sold due to this situation.

Answer: In strata living, majority rules and so the voting for these works can be passed if sufficient votes are cast to enable the works to be undertaken.

In strata living, majority rules and so the voting for these works can be passed if sufficient votes are cast to enable the works to be undertaken. As such if owners do not wish for this spending to continue they need to make their voices heard and become involved e.g. attend meetings where decision are made, join the Strata Committee etc.

There are a number of other items that should also be considered as detailed below:

If decisions are being made at a Committee Meeting to which Owners object, then owners whose unit entitlement exceed one third of unit entitlement can object in writing to any decision being made at a Committee level, meaning this has to be considered at a General Meeting instead, as per Schedule 2 Section 9 of the Strata Schemes Management Act 2015. In addition Section 36(3) of the Strata Schemes Management Act 2015 specifies decisions that cannot be made by the Strata Committee for example a Special Resolution decision or any matter that the Owners Corporation has determined at a General Meeting must only be decided upon only at a General Meeting. This Section also stipulates that if there is any disagreement between the Owners Corporation and the Strata Committee, the decision of the owners corporation prevails.

At a general meeting if there is an addition to common property as part of the specified works this requires a Special Resolution vote, not just a simple majority as per Section 108(1) & (2)of the strata Schemes Management Act and so that needs to be carefully considered when works are approved, an agenda prepared and if the correct resolution is not passed then this would be open to challenge at NSW Civil and Administrative Tribunal for example.

The definition of a special resolution is under Section 5 of the Strata Schemes Management Act 2015 being it must be passed at a general meeting and if more than 25% vote against the motion, it fails.

In June 2019 a Supreme Court case handed down a decision that has an impact on the requirements for ordinary resolution vs special resolution in Glenquarry Park Investments Pty Ltd -v- Hegyesi [2019] NSWSC 425. Here is a link to an interesting article from JS Mueller & Co Lawyers: NSW: Replacing Items of Common Property Just Got Much Harder. In this, it is summarised that based on this decision ‘an owners corporation will only be able to authorise the replacement of an item of common property by ordinary resolution where it is reasonably necessary to replace that item because the item can no longer be kept in a state of good and serviceable repair’.

‘In other words, an owners corporation cannot replace an item of common property by ordinary resolution if the existing functionality of that item can be maintained without replacing it. They have specified that the effect of the decision in the case is that it will be more difficult for an owners corporation to replace items of common property that are old and worn but can still be maintained or repaired and do not have to be replaced in order to maintain their existing functionality as the replacement of those items must be authorised by a special resolution.

Another option that is available, but one that I consider a last resort due to the removal of the owners ability to make decisions for themselves, is seek an Order for the appointment of a strata managing agent under Section 237 of the Strata Schemes Management Act 2015. This section of the Act gives Tribunal the ability to appoint a strata manager to undertake all or specified functions of the Owners Corporation but this can only take place in certain circumstances that Tribunal will need to consider e.g. the strata scheme is not functioning or functioning satisfactorily.

Robert Fothergill
Strata Life
E: [email protected]
P: 02 9456 9917

This post appears in the June 2021 edition of The NSW Strata Magazine.

Question: What is the decision making process for changing light fittings in common areas? I thought these changes need to go to a general meeting and that they require a special resolution. Am I correct?

My question is about the decision making process of the strata committee. Our strata committee decided to change the light fittings in all the common areas without reference to any non-committee owners. Under section 108 of the Strata Schemes Management Act I though all changes must go to a general meeting and they require a special resolution.

Answer: The Owners Corporation may have been carrying out repair and maintenance rather than an upgrade.

Section 108 (and the attendant special resolution) applies to “improvements” or “enhancements” of the common property. From the information provided, it appears likely that the strata committee were exercising the Owners Corporation’s repair and maintenance function and duty rather than an upgrade. It may be that all the light fittings were defective and therefore required replacement.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #465.

Question: Can the owners corporation make verbal approvals of the major work by-law?

An owner has installed an awning over her front door without Owners Corporation approval.

I notified the Strata Manager of this issue and they replied “We understand prior to our management (appointed in 2020), this was approved by owners verbally.”

Can the owners corporation make verbal approvals of the major work by-law? As I know, all of the unauthorised works should be applied in writing to the Owners Corporation, and then the outcome should also be written. Am I correct?

Answer: Any approval should be recorded in writing because it needs to be made by a general meeting or at a strata committee meeting (if authorised to approve minor renovations) and both types of meetings must have written minutes.

You are likely to be correct.

Any approval should be recorded in writing because it needs to be made by a general meeting or at a strata committee meeting (if authorised to approve minor renovations) and both types of meetings must have written minutes.

It is likely that the awning must be approved by special resolution of a general meeting. This is because it is a new structure affixed to common property (assuming the wall is common property which is most likely the case in most strata plans in NSW) and new structures must be approved by special resolution of a general meeting under section 108 of the NSW Strata Schemes Management Act 2015 (SSMA 2015) before they are installed. If it is intended that the lot owner be responsible for the repair and maintenance of the new structure, then under section 108 a by-law needs to be passed and registered making the lot owner responsible and if there is no such by-law, then the owners corporation remains responsible for repair and maintenance.

It is unlikely the awning could be approved as a minor renovation under section 110 of the SSMA 2015 because it would change the external appearance of the lot, may involve structural changes or may have needed planning approval. More detail would need to be provided to determine if the awning could be a minor renovation. However, under section 110, minor renovations can only be approved before they are installed.

If there has not been a proper approval for the awning, then the owners corporation has three options to choose from. The first is to remove the awning as part of its duty to repair and maintain common property because the awning is an illegal addition to common property. The second is to apply for an NCAT order under section 132 of the SSMA 2015 to compel the lot owner to remove the awning. The third is to pass a by-law ratifying the installation of the awning and making the lot owner responsible for its repair and maintenance. The owners corporation needs to consider all the facts of the case and what it wishes to achieve before deciding which option it wants to choose.

Carlo Fini
Lawyer (NSW)

This post appears in Strata News #465.

Question: In NSW strata, how many committee members are needed to agree for the approval of building repairs or works?

What is the NSW strata law regarding how many committee members can approve building repairs or works?

In our building of eight lots, we have always stood by four committee member approvals as a minimum. Our new strata manager is authorising quotes from only two committee member approvals plus a non-member approval, while two other committee members are not being advised.

Answer: Strata Committees may only make decisions in duly convened meetings with a majority voting in favour of any motion for it to pass.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #461.

Question: Our Executive Committee held Christmas drinks without approval for the spending. A resident had too much alcohol and vomited on the common property. What can be done about the unapproved spending and any liability in these circumstances?

The Executive Committee in our NSW Strata Plan hosted Christmas drinks for all residents on the common property. This was funded by the Owners Corporation, however no permission to spend our funds was ever asked or given.

At the event, a resident had too much alcohol and vomited on the common property. What are the Responsible Service of Alcohol rules for Owners Corporations in NSW? What if this resident had fallen and needed, say, $20,000 worth of dental work? Would ALL owners be responsible for the costs and legal implications associated with this? Surely insurance wouldn’t cover this type of accident. Would we be best to have a bylaw that covers something like this?

Answer: If a majority of owners disagree about having a Christmas party they can call a general meeting and reverse the strata committee’s decision and they can impose restrictions on what decisions the strata committee can make and how it spends the owners corporation’s money.

This problem touches on various areas of the law: liquor licensing, strata law, public liability (also known as the law of negligence) and insurance.

The Liquor Act 2007 generally only requires premises to be licensed if liquor is for sale and does not require to be licensed premises where a private party is conducted and liquor is supplied to guests free of charge. So, a private Christmas party hosted by an owners corporation should not require a liquor license. However, the Liquor Act 2007 does create offences such as supplying liquor to minors regardless of whether this occurs on premises that must be licensed or not.

The Strata Schemes Management Act 2015 regulates what an owners corporation can and cannot do. It does not confer an express statutory power or function on an owners corporation to hold social functions such as Christmas parties. However, an owners corporation has the principal responsibility for the management of its strata scheme and this includes the management and control of the use of its common property and the administration of its strata scheme.

It is arguable that an owners corporation organising social activities such as a Christmas party is conducive to the owners corporation carrying out those functions and, in practice, many owners corporations engage in promoting social activities that enhance their communities. Should there be doubt about the ability to do so, it is also possible to pass an empowering by-law to authorise the owners corporation to organise those social activities. A decision to have a Christmas party, however, should be the subject of a properly worded resolution of either a strata committee meeting or general meeting. If there is no such resolution, then there is no authority to spend an owners corporation’s funds on a Christmas party.

If a majority of owners disagree about having a Christmas party then under the Strata Schemes Management Act 2015 they can call a general meeting and reverse the strata committee’s decision to hold a Christmas party and they can impose restrictions on what decisions the strata committee can make and how it spends the owners corporation’s money.

As the occupier of premises being the common property where the Christmas party is held, the owners corporation is under a common law duty to take reasonable case to ensure that guests are not injured and this probably extends to taking care that guests don’t injure themselves because they are drunk. To discharge the duty, the owners corporation should have something like a responsible service of alcohol policy and choose an area that it suitable for the party. If the owners corporation breaches that duty and a guest is injured because say they are drunk then the owners corporation may be liable to pay damages for the guest’s injuries.

The strata insurer would indemnify the owners corporation for any liability it has to pay such damages if the strata policy covers public liability for having a Christmas party. If the policy does not cover it or there is an exclusion in the policy that the insurer can rely on, then the owners corporation would have to pay damages itself and likely have to raise a levy on owners to do so. Even if the strata insurer picks up the bill, then the owners corporation can expect its premiums to increase significantly in following years.

Carlo Fini
Lawyer (NSW)

This post appears in the March 2021 edition of The NSW Strata Magazine.

Question: How many committee members need to sign off on the approval for repairs or building maintenance work for NSW strata properties?

How many committee members need to sign off any repairs or building maintenance work for NSW strata properties?

Our new Strata Manager is approving work quotes when only one or two committee members have OK’d it verbally, without including the other committee members in any correspondence.

Answer: Email direction is generally for matters that does not require a resolution of the strata committee.

Decisions by the strata committee are made in strata committee meetings by simple majority vote, though in practice, sometimes members give their verbal or email direction to the strata manager. The strata manager then obtains quotes or issues a work order and such approval is ratified at the next strata committee meeting.

Email direction is generally for matters that does not require a resolution of the strata committee. Matters that do require resolution should be dealt with at a properly convened meeting of the strata committee.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in >Strata News #449.

Question: My Community Association recently approved expenditure in excess of $60,000 at a committee meeting with no notice of motion on the agenda. Is this legal or does it breach strata law in NSW?

My Community Association recently approved expenditure in excess of $60,000 at a committee meeting.

There was no notice of motion on the agenda, no quotes were tabled, and not even the scope of the work to be carried out was tabled.

The discussion on the matter lasted less than 3 minutes. The minutes of the meeting include a motion that a contract has been awarded to carry out the works. Is this legal or does it breach strata law in NSW?

Answer: The minutes should record decisions made and the notice of the meeting should include all decisions to be considered.

The minutes should record decisions made and the notice of the meeting should include all decisions to be considered. In other words, you cannot make decisions that do not appear on the agenda for the meeting.

Depending on how much evidence you have and the nature of the expenditure (e.g. it may have been urgent remedial works), you may have grounds to make an application to NCAT to have the resolution to award the contract invalidated (unless works have commenced).

The Community Association could though, theoretically, ratify this anomaly at their next meeting.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in the November 2020 edition of The NSW Strata Magazine.

Question: At no cost to the owners corporation, we’d like to paint an unpainted common area exterior wall. How can we get this action sanctioned and take advantage of this improvement?

It has been suggested that we have some unsightly unpainted interior walls in our complex spruced up with a coat of paint. Currently, they are untreated block walls and unpainted concrete. They are within our building’s interior common property, adjacent to our basement carpark. As these services have never been painted, it is considered that improving their appearance is not maintenance, as the current finish could be considered maintenance free.

We have adequate paint left over from a recent exterior repaint to cover these unfinished surfaces, and sufficient volunteer labour to tackle the work. Therefore this improvement would come at no cost to our owners corporation.

The fact that these surfaces are isolated and interior would likely mean that a single paint would probably last us in excess of 15 years. How can we get this action sanctioned and take advantage of this zero cost improvement?

Answer: Such improvements require a special resolution of the Owners Corporation.

In our view, the painting is an “improvement” to the common property because the surfaces are currently unpainted. Such improvements require a special resolution of the Owners Corporation. Before embarking on the working bee, ensure you have the proper authorisations in place, and, in particular, check with the building’s insurer whether such a working bee would be an insurable event (in case of slip-and-fall etc).

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #402.

Question: Can an EGM be called to reverse the decision of a majority at an AGM? The owners corporation by a majority vote accepted the proposed strata levies at our AGM. A group of dissatisfied owners have asked for an EGM with a motion to reverse the decision.

Can an EGM be called to reverse the decision of a majority at an AGM?

The owners corporation by a majority vote accepted the proposed strata levies at our AGM. Levies supported by appropriate budgets, explanations and Capital Works Funding Plan.

A group of dissatisfied owners (just enough to make the 25% required for an EGM) within a month have asked for an EGM with a motion to reverse the newly agreed levies to those of the previous year. They provide no further explanation or documentation.

It seems this is permissible but unsatisfactory. Can a series of AGM and EGMs be called each to reverse the decisions of a prior AGM, EGM?

Answer: Decisions may be reversed and any type of general meeting may revoke a decision of another type of general meeting.

Yes, decisions may be reversed and any type of general meeting may revoke a decision of another type of general meeting.

Under the strata legislation, a unanimous resolution or special resolution of an owners corporation about a matter cannot be amended or revoked other than by a subsequent resolution of the same kind.

The position may change if a decision has been implemented and is incapable of being reversed.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #359.

Question: When considering committee decisions, if a motion is defeated at an AGM (or EGM), how soon can the same or similar motion be proposed again?

Are old Owners Corporation committee decisions “set in Concrete?”

At the conclusion of our recent AGM there was a discussion on the merits of undertaking a couple of capital works projects, and whether the Strata Committee should investigate their affordability and practicality of seeking a DA.

Long-time residents stated that someone had proposed the same idea some years before, and the committee decision, based on a vote, was to not pursue the initiative. Over the ensuing years, the newer unit owners would likely now have the numbers to approve this idea.

Therefore, our question is: If a motion is defeated at an AGM (or EGM), how soon can the same motion (or one ostensibly similar) be proposed for the second time?

Answer: Owners Corporations may change their minds over time in the same way that their previous committee decisions may be rescinded.

We are not aware of any impediment to the Owners Corporation placing an old motion for reconsideration by it.

Owners Corporations may change their minds over time in the same way that their previous committee decisions may be rescinded.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #232.

Question: What is deemed as a justifiable reason for an owners corporation to call a vote to overrule its strata committee decisions? What proportion of the vote is required to overrule?

Our Strata has a couple of less than congenial lot owners who, after resigning from the Strata Committee, now repeatedly quote a single sentence from NSW Fair Trading’s website in all their correspondence, and speak it verbatim when in conversation with committee members.

They quote: “Any decision made by the strata committee is treated as a decision of the owner’s corporation. However, the owner’s corporation can vote to overrule its strata committee’s decisions or put limits on what they can make decisions about”. From the NSW Fair Trading FactSheet: Meetings of the strata committee.

This whilst both tedious and ungracious it is in fact quite true; in the event of a disagreement between the owners corporation and the executive committee, the decision of the owners corporation prevails.

Therefore my 5 questions are:

What are deemed as justifiable reasons for an owners corporation to call a vote to overrule its strata committee decisions?

What would be the process of calling for such a vote to take place?

Would an extraordinary general meeting of the owners corporation be needed to put the overrule motion to the vote?

What proportion of the vote is required to overrule strata committee decisions?

Would strata committee members retain their vote in the owners corporation meeting?

Finally, is there a definitive statement that could be used to effectively counter the NSW Fair Trading quote (and put these nay-sayers in their place)?

Answer: This could occur if the decision was not in the best interests of the Owners Corporation.

Examples:
- if the strata committee made a decision which was ultra vires or one that may only be made by the Owners Corporation
- if the decision of the strata committee was not in the best interests of the Owners Corporation
- a significant purchase is proposed to be made against the wishes of the individual lot owners
All of the above apply if the decision has NOT yet been implemented ie major purchase has already been made in which case the Owners Corporation would not be able to reverse the decision and would need to seek NCAT assistance.

A general meeting would need to be called and by ordinary resolution, the Owners Corporation would vary, rescind or override the decision made.

Yes or a motion on the AGM agenda.
Please note following the strata reforms which took effect in November 2016 there are now only types of general meetings, an Annual General Meeting and a General Meeting (formally referred to as an Extraordinary General Meeting)

An ordinary resolution would be required as per point 2 above ie a majority

Not really, because NSW Fair Trading position re-states the letter of the law (which is correct).

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #183.

Question: Whose decision is it to appoint strata maintenance contractors?

My issue is that our committee wants to appoint an expensive gardening company when we have cheaper quotes. A few other members and I are opposed to it, saying it is a waste of money. If gardening can be done for a reasonable amount, why spend big dollars?

Currently, these members and I are seen as troublemakers. The remainder of the owners have a majority and also have the Strata Manager on their side.

We believe the decision to accept the higher quote is not in the best interest of the body corporate. The Strata Manager recommended the gardening contractor and frankly, we question the Strata Manager’s honesty and professionalism.

Are we able to disapprove any company recommended by the Strata Manager, as it is in conflict?

Can we ask the Strata Manager to butt out of Committee issues such as recommending strata maintenance contractors?

The Strata Manager is calling an executive meeting in which we have to decide (vote) to appoint a Gardener and he is saying the majority vote will win? Can he do that?

There is no Secretary, Treasurer or any other official in our Committee. I have asked for this previously, but the Strata Manager told us we don’t need any Officials. I noticed that the Strata Manager is always getting his way regarding the appointment of strata maintenance contractors.

Answer: The appointment of a new gardener may be a matter that you and other owners feel is best taken to a general meeting

The Owners Corporation under the Act must appoint office bearers consisting of a Chairperson, Secretary and Treasurer. This is normally done at a committee meeting and traditionally, immediately at the first Committee meeting following the Annual General Meeting each year.

A decision regarding the appointment of a new gardener can be done at a committee meeting if owners have not previously restricted the decision making of the committee in relation to this subject. A majority vote at a committee meeting is the vote required to appoint a new gardener.

There is no conflict of interest if the Strata Manager proposes different strata maintenance contractors to assist with servicing the Owners Corporation, as this will fall normally within their delegated duties on behalf of the Owners Corporation, although the Strata Manager is required under the Act to disclose any direct connection or relationship with any nominated contractors, if relevant.

Further Pursuant to Clause 31 (3), Schedule 2 of the Strata Schemes Management Act 1996 (NSW), persons entitled to vote in respect of lots the total unit entitlement of which is at least one –quarter of the aggregate unit entitlement, can requisition the convening of a general meeting with the proposed motions that are submitted pursuant to Clause 36, Schedule 2 of the Act:

36 Requisition for motion to be included on agenda for general meeting

Any person entitled to vote at a general meeting of an owners corporation on a motion that does not require a unanimous resolution may, by notice in writing served on the secretary of the executive committee, require inclusion in the agenda of the next general meeting of the owners corporation of a motion set out in the notice and the secretary must comply with the notice.

The secretary must give effect to the requirement of the notice.

Subclause (1) does not require the inclusion of a motion on the agenda of a general meeting for which notices have already been given in accordance with this Schedule but in that case, the motion must be included in the agenda of the next general meeting after that.

For the purposes of subclause (1), an owner of a lot who, but for the fact that the lot is subject to a mortgage or covenant charge, would be entitled to vote at a general meeting of the owners corporation is entitled to vote at that meeting.

Therefore, the appointment of a new gardener may be a matter that you and other owners feel is best taken to a general meeting so that all owners can consider the appointment of the new gardener, instead of leaving the decision for the committee, if the committee has different views on the subject.

If so, owners who have at least one-quarter of the aggregate unit entitlement can requisition a general meeting to consider the appointment of a new gardener.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

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Comments

An says

September 27, 2024 at 11:13 pm

Hi, an AGM is held after the strata contract ends. There is only one person with a proxy. They had to agree to continue with the strata company as they said they were going to cut all services on the day. After this meeting they send a contract. Can we not sign the contract and change strata companies ? Or because during the AGM it was agreed to continue, do we have the obligation to do so?

Reply
- Liza Admin says
  
  October 21, 2024 at 11:58 am
  
  Hi An
  
  Thank you for yourt comment. The following response has been provided by Megan Parkins, Tender Advisory:
  
  We are working on the assumption that a strata committee meeting was not convened, within the agreement term, for the purpose of initiating a three-month extension, in accordance with Section 50(4) of the NSW Strata Schemes Management Act 2015.
  
  Therefore, notwithstanding the consent provided by the Owners in attendance at the meeting continue, as the Strata Manager was out of the agreement term prior to the Annual General Meeting, there would be question surrounding whether or not the notice/agenda for the meeting was validly issued.
  
  To elaborate, if the end date of the agreement was prior to the meeting notice/agenda being published, the Strata Management Company would have had no authority to perform this function on behalf of the Owners Corporation and this would subsequently render the meeting and the motion for re-appointment invalid.
  
  Reply
Hilda Girgis says

August 6, 2022 at 7:07 pm

What do you do if the committee is acting very bad costing strata to go very high by taking loans and going into court cases and losing a lot of money on the strata how can they be stoped or removed when
They have proxy voices and over turn the needs of the
Owners and you can’t get them of the committee because of the proxy

Reply
- Nikki Jovicic says
  
  August 8, 2022 at 9:04 am
  
  Hi Hilda
  
  This recent article should provide you with more information: NSW: Is Your Owners Corporation Performing Satisfactorily?
  
  Reply
Ross Anderson (UOAQ Member) says

June 20, 2022 at 10:20 pm

RE Chris Irons and the religious icons on common property.
A cultural /religious issue arose in 2014 at a complex I’m involved with in Qld, concerning our annual Xmas party. One owner told the Committee that while he had no problems with a Xmas party (which he would not attend) being held in our community recreational area, he objected, on religious grounds, to the use of body corporate funds to subsidize it, eg the food . This posed a real problem for the committee; he wasn’t being shouty about it but presented as a genuine objector, and all parties wished to respect his beliefs. Thankfully a recent Adjudication provided some divine intervention, ie Pivotal Point Residential [2014] QBCCMCmr 370, which banned use of body corporate funds for social events. So the Xmas party changed to a full ‘user pays’ model and everyone seemed happy with the new arrangements.

Reply
Davina says

October 18, 2021 at 10:04 am

Can a non owner vote at the AGM

Reply
Henry says

June 16, 2021 at 7:08 am

QUESTION: When our strata manager emails for a decision, all committee members are not aware of who has voted and how. Should we be aware of the decision making process? Should we be aware of the decision making process?

You didn’t answer the question ! The meaning of the question is: ” Is it right that committee members are not informed of WHO voted for or against and why”

I have, also, noticed that in AGM electronic voting online there is no disclosure who voted for or against motions and that during the AGM the Strata Manager does not offer to disclose. who and how each owner voted. Why is this secrecy allowed?

Reply
Ken Stewart says

August 28, 2020 at 9:06 am

I have applied to the strata committee to install a solar system on what I now find is a roof which is common property and they ruled against me. Do I have any avenue of appeal?

Reply
Brett Kemble says

April 19, 2018 at 8:22 am

Hi Leanne
I thought an owners corporation could block or override a committee’s decision using a petition with at least 25 % of owners signatures. The petition is simply presented to the secretary and tabled with an appropriate motion for the next committee meeting, avoiding the need for a general meeting

Reply
- Nikki Jovicic says
  
  May 1, 2018 at 11:07 pm
  
  Hi Brett
  
  We have received the following reply back from Leanne Habib, Premium Strata:
  
  See Section 36 of the Strata Schemes Management Act, (NSW) 2015 entitled “Functions of strata committee” (emphasis added)
  
  (1) A strata committee has the functions conferred on it by or under this or any other Act.
  
  (2) A decision of a strata committee is taken to be the decision of the owners corporation. However, in the event of a disagreement between the owners corporation and the strata committee, the decision of the owners corporation prevails.
  
  So, a motion at a general meeting would need to be passed to override the decision of the strata committee because the Owners Corporation can only make decisions at a duly convened meeting (or valid strata committee resolution).
  
  Reply
Jo Wark says

March 21, 2018 at 8:35 pm

What is the difference between Owners Corporation and strata Committee?
I am hoping to get onto the Stata Committee at our meeting next month, but how do you get to be on the Owners Corporation?
Jo W

Reply
stephen says

March 21, 2018 at 10:41 am

“Any decision made by the strata committee is treated as a decision of the owner’s corporation. However, the owner’s corporation can vote to overrule its strata committee’s decisions or put limits on what they can make decisions about”. From the NSW Fair Trading FactSheet: Meetings of the strata committee.

The above assume several things, it is nothing more than a very general statement that reflects the intent of s 36(2). It is far from literal and far from gospel.
The statement should say “any valid decision, within their authority, made by the strata committee” (SC) just to be clear the SC can’t just do as it pleases; there are limits.

The Act sets out various decisions which are solely for the owners corporation (OC) to determine at a general meeting so such decisions are not within the scope of the SC. The Act, as a whole, also sets limits on what the OC and SC can make decisions about and when the OC / SC steps outside those boundaries it acts ultra vires (beyond its authority).

As far as the procedural aspects of a committee meeting goes the Court’s seem to not really care about most of the musts that are in the Act.
Must does not mean must in the Strata Act in most instances of its use, i.e. there is often no consequence for not doing what the Act says ‘must’ be done.

Q1 has no objective answer. The Act sets out what is required to call a general meeting and you should read s 19 to understand the provisions at your disposal.
The problem with utilizing s 19 is the time factor. The SC can easily in most cases action their resolution long before a general meeting is called and in those circumstances the GM then becomes mute.
If the owners do not like what the SC has done then in urgent matters the owners should seek an interim order to restrain the SC from relying on their decision until after a general meeting to fully determine the matter. There is more to that suggestion than is possible to outline here but it is an option.

Q2 is in part answered by s 19. You need to get the Secretary to call the general meeting or force the issue via s 19(2) if you can get the support.

Q3. There is no longer a meeting called an EGM, there is the FAGM, the AGM and a general meeting is now what was formerly known as an EGM. As per s 19 you will need a general meeting.

Q4. If you can get a a general meeting to resolve the matter then you need just an ordinary resolution (majority vote) but for future reference I would refer readers to Sch 2 cl 9(3) which enables the owners to effectively “veto” a decision of the SC but that veto must be exercised before the SC make the decision, i.e. if you see something on the SC meeting agenda that you do not want the SC making a decision about there is a way to ‘nullify’ any decision the SC make on that matter using the provisions found in cl 9(3).
Clause 9(3) is not easy to meet the conditions of but it is something owners should be aware of.

Q5. Provided they are entitled to vote at the general meeting; simplistically put, as long as they are financial at the time of the general meeting then they are entitled to vote.

Q6.
The best response is probably: The Fair Trading statement is a very general statement; it is not literal nor is it gospel. The decision/s needs to be a valid decision/s within the scope of the authority of the SC, the SC can’t just do as it pleases.

If you think your SC aren’t following the Act then s 238 sets out a way to seek to have NCAT make an order removing one or more SC members from being SC members. Also if you can force a general meeting then perhaps the odd motion to declare a SC members position vacant, see s 35(1e), would add to the entertainment of the day.

Reply

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Question: Our strata manager makes decisions on small repairs, but bigger repairs are referred to the chair and treasurer for a decision. Planning for larger items is handled by the entire committee. Is this correct?

Answer: The strata manager may have an expenditure limit. If the chair (acting within a duly convened meeting) is the point of contact, this may be the most appropriate approach.

Question: What is the process for committee decision making between committee meetings?

Answer: Any majority “decisions” made informally outside a meeting that require resolutions under the legislation should be ratified at subsequent strata committee meetings.

Question: The owners corporation hasn’t had a meeting for over a year, yet decisions are being made. We have received no meeting notices or minutes. Who is making the decisions?

Answer: The decision making process in strata schemes can be quite complex.

Question: Our aggressive building manager installed a sign forbidding people to feed cats in our complex’s garden. The owners corporation has not approved the sign. Can I remove the sign?

Answer: I would not suggest removing the sign yourself, especially if the building manager is aggressive in their approach.

Question: How are owner requests usually dealt with? The committee makes decisions via email in our scheme, and responses can take a long time. What is the usual process under the Act?

Answer: As best practice, items such as renovations and works over $5,000 should be determined at a duly convened strata committee meeting.

Question: A resolution was passed to replace air conditioning units and limit the hours of use. Many owners are not happy. Can we do anything to reverse the decision?

Answer: If a majority of owners do not agree with the decision, those owners whose unit entitlement are at least one quarter should make a qualified request for the owner corporation to convene another general meeting.

Question: What process should be followed to erect signage on common property? Should signage be decided on by the owners corporation or the committee?

Answer: The key phrase to consider is whether the signage would be “improving or enhancing the common property”.

Question: Years ago, a decision was made to only plant drought tolerant hedges. Without consultation, the committee removed hedges and planted flowers. Does the committee have the authority to make this change?

Answer: If the strata committee is fulfilling the owners corporation’s repair and maintenance functions, no special resolution may be required.

Question: If window replacements in our building have the potential to affect privacy of my courtyard, is it possible to request this be taken into consideration during the decision-making process for the work?

Answer: You can approach your owners corporation, but they do not appear to be under any duty to accommodate your wishes.

Question: I have purchased in a four lot strata scheme. The owners of two other lots are related and band together for a majority vote. Is this legal? What can I do?

Answer: Speak to the other owners and try and work with them.

Question: We have four owners. Three are residents, and one is an investor. Who are the members at the meetings? Are all owners members, or only elected members?

Answer: At strata committee meetings, only elected members vote and make decisions.

Question: We have an old numbering system on the common property fence of our strata scheme. Can an ordinary resolution be used to approve the replacement of the street number or can the owners corporation pay for and maintain the signage with an ordinary resolution?

Answer: Is it an improvement or enhancement to the common property?

Question: How do we stop a lot owner, who is not on the committee, from meddling in the affairs of the owners corporation?

Answer: This is not unusual. Have your strata managing agent or strata committee write to the interfering owner and ask him to cease and desist.

Question: Our owners corporation has received a request from the development next door to place scaffolding on common property and across two private car parks. They have offered to pay compensation. How do we deal with something like this?

Answer: Usually, the best option is to negotiate an access deed with the developer.

Question: Our Committee has been requested to investigate naming our building. What’s the best and fairest way to involve everyone in the naming process? What else do we need to consider?

Answer: Once a name has been chosen, bear in mind that a special resolution will need to be passed for the “erection” of the sign/”addition” to the common property.

Question: The Strata Committee accepted a $13,000 contract for landscaping work without approval. Can the contract be ratified? If so, how?

Answer: A decision of the strata committee can generally be ratified by a later meeting of either the strata committee or by the owners corporation at a general meeting.

Question: Does the strata Committee have the right to place religious icons such as Buddhas around the common area without all lot owners’ permission or informing all lot owners of their intentions? If this offends a lot owners’ religious beliefs, should the icons be removed?

Answer: We have two very different concepts – strata and religion – coming together in one place and I doubt our legislators ever anticipated that.

Question: At our AGM, a special levy was approved to replace aged windows. An owner has since challenged the decision and is seeking to have it overturned. What are the chances the decision will be overturned and if so, how do we fix the damaged windows?

Answer: If an owner is unhappy with the outcome of a decision made at a general meeting, they have a few options.

Overturning decisions of the owners corporation

Option 1 – Submit a motion to revoke the decision

Option 2 – Arrange a qualified request for a general meeting

Option 3 – Seek orders from the Tribunal invalidating a resolution

An owners corporation’s duty to repair and maintain common property

Question: The committee would like to replace all windows and sliding doors simply to update the colour from brown to black. If this decision is adopted, do all lot owners need to upgrade?

Answer: The Owners Corporation needs to pass the special resolution, and, if it passes, yes, all owners are liable to contribute to the costs whether they are in agreement or not.

Question: A Strata Committee member proposes to take a dispute to NCAT. What percentage of Committee members must agree to permit this? It is a simple majority or 75%? Should all owners have a voice?

Answer: This would be a decision to be made by a majority of the Strata Committee.

9 Decisions at meetings

Question: We live in a secure gated community. Some owners want the gate to remain open during the day. Would the decision require a special resolution of the owners corporation, or can the decision be made by the Strata Committee?

Answer: The strata committee cannot make this decision, because the owners corporation is charged with the duty to manage and control the use of the common property.

Question: Can a special resolution passed at an AGM/EGM be challenged if it adversely affects some owners.

Answer: Depending on the reasons, a decision of the owners corporation can be challenged in NCAT for a variety of reasons.

Order invalidating resolution of owners corporation

Order where voting rights denied or due notice of item of business not given

Orders to settle disputes or rectify complaints

Question: Our 4 lot scheme is split evenly between two lot owners. The other owner continually sends emails to both me and the strata manager, wasting time about trivial matters. Do I have to continually reply to emails or can I withhold comments until the AGM?

Answer: You could allow for matters not urgent to come back to an EGM or AGM.

Question: During closed-door meetings, the committee vote on each agenda item frequently without costings or reasons for decisions. As an owner, what can I do?

Answer: As an owner you have rights to block the strata committee from considering a matter.

Question: In the AGM last year, we all voted to have a defibrillator. The chairman and secretary voted against it and in every meeting since have decided to ask a lawyer their legal rights and are digging their heels in. Can they do this?

Answer: It may be that the strata committee is seeking clarification for the proper procedure to implement its AGM decision.

Question: Two Committee members made changes to common areas without any vote and used the common seal without approval. What process should have been followed?

Answer: An Owners Corporation can only make decisions through general meetings or strata committee meetings.

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?

Answer: Use the strategy of having two owners on the committee and only having the developer as one of the members

14 Decisions at meetings

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.

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

Question: I’ve asked if my late fee charges can be waived and the strata manager states the request must be considered by the owners corporation via a meeting, which I may have to pay for. Is this correct?

Answer: There is no informal decision making capabilities by the Owners Corporation only at a General Meeting

Question: How do we force a decision in a 4 unit, self-managed complex? There are always 2 for and 2 against.

Answer: Strata is a democracy and it comes back down to a vote.

Question: When our strata manager emails for a decision, all committee members are not aware of who has voted and how. Should we be aware of the decision making process?

Answer: Technically, if the strata manager has authorisation in their agreement, they do not need to have sought approval in the first place

Question: A majority lot owner holds over one fifth of the lots in our building. He gets away with unnecessary spending due to his lot entitlements. How do we stop this?

Answer: In strata living, majority rules and so the voting for these works can be passed if sufficient votes are cast to enable the works to be undertaken.

Question: What is the decision making process for changing light fittings in common areas? I thought these changes need to go to a general meeting and that they require a special resolution. Am I correct?

Answer: The Owners Corporation may have been carrying out repair and maintenance rather than an upgrade.

Question: Can the owners corporation make verbal approvals of the major work by-law?

Answer: Any approval should be recorded in writing because it needs to be made by a general meeting or at a strata committee meeting (if authorised to approve minor renovations) and both types of meetings must have written minutes.

Question: In NSW strata, how many committee members are needed to agree for the approval of building repairs or works?