This Q&A discusses the NSW legislation around Section 110 – the power to borrow money, in this case, to cover remedial works.
Question: At our next EGM we will be voting on whether to take out a Strata Loan to cover remedial works. What procedure is required for acceptance of this Motion?
At our next EGM we will be voting on whether to take out a Strata Loan to cover remedial works. What percentage is required for acceptance of this Motion and does everyone have to participate in the loan, despite organising finance themselves.
Answer: A resolution approving the relevant loan has to be passed at a general meeting of the owners corporation.
Section 100 of the Strata Schemes Management Act, 2015 (NSW) is set out below and the power to borrow only requires an ordinary resolution/majority vote.
100 Power to borrow money
- An owners corporation may borrow money and secure the repayment of money and of any interest in any manner agreed between the owners corporation and the lender, otherwise than by charging the repayment on the common property.
- An owners corporation must not borrow money, or secure the payment of money and interest unless a resolution approving the relevant loan has been passed at a general meeting of the owners corporation.
Because the borrower is the Owners Corporation and would need to issue levies to cover repayments, it isn’t possible that some owners could opt out as levies are due and payable by all owners part of the scheme.
Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440
This post appears in Strata News #369.
Have a question about Section 100: power to borrow money or something to add to the article? Leave a comment below.
Read next:
- QLD: Q&A Using a Strata Loan to Pay for Painting of the Complex
- Strata Owners: Why refinancing your home loan may be a good idea … and why it could prove difficult
- Strata Finance: The guide for Owners Corporations
These articles are not intended to be personal advice and you should not rely on it as a substitute for any form of advice.
Visit Your Strata Levies OR NSW Strata Legislation.
Looking for strata information concerning your state? For state-specific strata information, take a look here.
Are you not sure about some of the strata terms used in this article? Take a look at our NSW Strata Glossary to help with your understanding.
After a free PDF of this article? Log into your existing LookUpStrata Account to download the printable file. Not a member? Simple – join for free on our Registration page.
Leave a Reply