Question: What happens if the owners corporation does not carry out necessary maintenance due to lack of funds?
We have just discovered that our strata building’s 60-year-old roof and gutters are in urgent need of replacement within the next 12-18 months.
The building does not have enough money in the capital works fund to cover this maintenance. The ground floor lot owners do not want to approve and pay a special levy to cover the costs as they feel they do not benefit from repairs to the roof and gutters.
Can we raise a Special Levy for critical works? I’m concerned that too many owners will vote a Special Levy motion down. The unit entitlements for lots that disagree would be greater than 25%.
If the problem is ignored, the costs to fix the damage caused by a leaking roof will far outweigh the preventative repair costs.
What options are available to the building to ensure this maintenance work is carried out?
Answer: If the owners corporation does not take active steps to fix common property, there is the chance that an owner may lodge an application for the works to be done pursuant to an order.
Repairing and maintaining common property is one of the most important roles of the owners corporation. The obligation is a ‘must’, is strict and there’s a huge amount of caselaw on the matter. See S106 of the Act. The owners corporation can absolve itself of this obligation provided there isn’t consequential issues that come from it (3b of S106). Guttering is an important part of the building structure and unless fixed, is likely to cause further issues.
Raising a levy requires a majority resolution, so even if 25% were against that is ok.
If the owners corporation does not take active steps to fix the guttering, there is the chance that an owner may lodge an application under S106 for the works to be done pursuant to an order.
Andrew Terrell
Bright & Duggan
E: Andrew.Terrell@bright-duggan.com.au
P: 02 9902 7100
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