Enter your email Address

  • Home
  • What is strata?
    • Strata Legislation – Rules and ByLaws
    • What is Strata?
    • Glossary of NSW Strata Terms and Jargon
    • Strata Property Basics: Strata Owners Corporation
    • Strata 101: Strata title
    • Understand Strata Management with this Five-Minute Guide
    • Cracking the Strata Fees Code
    • Strata Finance
    • 2021 Updated Guide: Master the Art of Strata Insurance
  • Strata Topics
    • Strata Information By State
      • New South Wales
      • Queensland
      • Victoria
      • Australian Capital Territory
      • South Australia
      • Tasmania
      • Western Australia
      • Northern Territory
    • Strata Information By Topic
      • COVID-19
      • By-Laws & Legislation
      • Smoking
      • Parking
      • Noise & Neighbours
      • Insurance
      • Pets
      • Your Levies
      • New Law Reform
      • Maintenance & Common Property
      • Committee Concerns
      • NBN & Telecommunications
      • Building Defects
      • Renting / Selling / Buying Property
      • Strata Managers
      • Building Managers & Caretakers
      • Strata Plan / Strata Inspection Report
      • Apartment Living Sustainability
    • Strata Webinars
      • NSW Strata Webinars
      • QLD Strata Webinars
  • Blog
    • Newsletter Archives
  • The Strata Magazine
    • The NSW Strata Magazine
    • The QLD Strata Magazine
    • The VIC Strata Magazine
    • The WA Strata Magazine
  • Advertise With Us
    • Site Sponsors
    • LookUpStrata Site Advertising
  • About Us
    • Testimonials for LookUpStrata
  • Help
    • Ask A Strata Question
    • Q&As – about the LookUpStrata site
    • Sitemap

LookUpStrata

Australia's Strata Title Information Site

  • Promotion Strata Insurance Webinar
  • Whitbread Insurance Brokers
Australia's Top Property Blog Dedicated to Strata Living
You are here: Home / Renting / Selling / Buying Strata Property / Renting / Selling / Buying Strata Property NSW / NSW: Q&A Monitoring the Owners Corporation During Strata Purchase

NSW: Q&A Monitoring the Owners Corporation During Strata Purchase

Published June 13, 2019 By Yuhao Gu, Omega Legal 1 Comment Last Updated March 12, 2021

Sharing is caring!

4shares

This Q&A about keeping an eye on the Owners Corporation during the strata purchase process of exchange and settlement in NSW has been supplied by Yuhao Gu, Omega Legal.

Question: How can a purchaser in a Strata complex maintain oversight of the Owners Corporation and the committee’s functioning between exchange and settlement?

GET NOTIFIED WHEN WE PUBLISH NEW Q&As, NEWS AND ARTICLES TO THE SITE

How can a purchaser in a Strata complex maintain oversight of the Owners Corporation and the committee’s functioning between exchange and settlement? This may be important where the Owners Corporation has current complex issues such as building warranty concerns and/or unresolved insurance claims.

We are in the process of purchasing in a 4 lot strata scheme in NSW. There are significant pending issues with structural integrity of the verandas / waterproofing membrane failures, as well as a provisionally denied hail claim from a major storm event in December 18.

If the owners corporation made poorly informed or terminal decisions on either issue prior to my son’s settlement and without his knowledge, it would fundamentally weaken his position in what otherwise can still be resolved in the OC’s interest.

Is getting the vendor to identify the purchaser as their bona fide nominee for the relevant lot the only way for the purchaser to ensure visibility of pre-settlement proposals, advice and decisions? If so, should that nominee requirement be a special condition in the Contract of Sale?

The NSW Strata Magazine Click Me Banner

Answer: If a purchaser desires to be fully informed of all strata decisions and vote at a general meeting before settlement, they will have to rely on a well drafted special condition in the contract for sale.

A purchaser of a strata property does not generally have a right to be kept informed of new information concerning the strata. If a purchaser desires to be fully informed of all strata decisions and vote at a general meeting before settlement, they will have to rely on a well drafted special condition in the contract for sale.

Can a purchaser of a strata property attend and vote at a general meeting before settlement?

There is a clause in the NSW standard contract for sale where the vendor is required to immediately notify the purchaser of a notice of a general meeting before completion and appoint the purchaser to vote on the vendor’s behalf. But this clause has its limitations, assuming it has not been amended by any special conditions.

For example, decisions could be made by the strata committee instead of the owners in a general meeting if the strata committee has sufficient authority, and the vendor will not be obliged to provide you with strata committee meeting notices and minutes, even if the vendor has access to them, which the vendor may not have as a matter of course.

Under the standard clause, a purchaser will have to rely on the vendor’s compliance with their obligations and if the vendor fails to forward the notices as required, it would be difficult for the purchaser to make a claim for any remedy against the vendor.

What special conditions could be requested by the purchaser?

There is utility in a special condition for the vendor to nominate the purchaser as the vendor’s nominee as you have mentioned. The special condition may even go so far as enabling the purchaser to rely on the clause to issue a strata interest notice to the strata manager under section 22 of the Strata Schemes Management Act 2015 (Act) before settlement has occurred, which is usually only issued after settlement when a purchaser becomes the legal owner.

The reason for doing this would be to try and oblige the strata manager to provide the notices of meetings directly to a purchaser, rather than relying on the vendor’s forwarding of the documents. However, there can be doubt whether the service of a strata interest notice before a purchaser becomes the legal owner of the property will automatically lead to the strata manager sending the purchaser the notices due to the technical wordings of the Act and therefore it will be prudent to confirm your expectations with the strata manager.

Speak first with your lawyer if you wish to buy a strata property and have concerns about the strata

As a general rule, you purchase a property as is including its defects and problems so be sure to discuss them with your lawyer if you find out any issues about the property, ideally before you sign the contract. While it may be useful for you to participate in strata meetings before settlement, all decisions will need to be made by the majority of the owners and each owner is only entitled to one vote.

A well-drafted special condition will only go so far as ensuring you can be informed as new information becomes available but it may not guarantee that you ultimately receive the outcome that you expect. So definitely speak to your lawyer again to discuss what the best approach is in your son’s circumstances.

This post appears in Strata News #257

Have a question about strata purchase process or something to add to the article? Leave a comment below.

Embed

Yuhao Gu
Omega Legal
E: [email protected]
P: 0402 990 108

Read next:

  • NSW: Q&A What Do We Do When A Developer Comes Knocking?
  • NSW’s First Strata Renewal Decision Unpacked: Procedural Tips For Your Scheme
  • NSW: Q&A Should a Free Strata Report be available at inspection?

Visit Renting / Selling / Buying Strata Property OR NSW Strata Legislation.

Looking for strata information concerning your state? For state-specific strata information, try here.

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.

Comments

  1. AvatarPhillip Langworthy says

    June 14, 2019 at 12:32 pm

    Hi Sophia, Thanks for your excellent advice which accords exactly with the understanding we have developed from this pre-settlement experience. Two follow on issues now the property has settled: Firstly is how the the purchaser can authorise a nominee (who is not a co-owner) to represent their interests in all matters involving the Owner’s Corporation, the Committee and the BCM? The purchaser has sent signed, written instructions to the SEC & the BCM to this effect and has been advised that a power-of-attorney executed by a registerer solicitor is required. This does not appear to be a legislative provision of the Act and seems unnecessary? Secondly, the purchaser has asked for themselves (or their nominee) to be considered for appointment as the 3rd member of the committee (there are currently only 2 committee members covering all roles of Chair, SEC, Treasurer). The BCM has advised that even if the Owner’s Corporation and/or the Committee agree to this, it is prohibited under the 2015 Strata Schemes Mgt Act. I can find no such constraint and the legislation appears to be silent on that issue. Even if one of the two existing committee members has not vacated their office, can the number of committee members be varied between AGMs? Regards PL

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Search For Strata Articles

  • Advert Stratabox
  • StrataBox Advert
  • Advert: StrataLoans
  • Advert: StrataLoans
  • Advert: StrataLoans
Subscribe Newsletter

TESTIMONIAL

"The newsletter is very helpful and gives great guidance with commonly asked questions." Gayle, Lot Owner
"I love your regular emails and now this fantastic magazine! Keep up the great work. " David, Lot Owner

Quick Login

Log In
Register Lost Password

Categories

  • COVID-19
  • Ask A Strata Question
  • New South Wales
  • Queensland
  • Victoria
  • Australian Capital Territory
  • South Australia
  • Tasmania
  • Western Australia
  • Northern Territory
  • ByLaws & Legislation
  • Smoking
  • Parking
  • Noise & Neighbours
  • Insurance
  • Pets
  • Levies
  • Law Reform
  • Maintenance & Common Property
  • Committee Concerns
  • NBN & Telecommunications
  • Building Defects
  • Renting / Selling / Buying
  • Strata Managers
  • Building Managers and Caretakers
  • Strata Reports / Plans
  • Sustainability

Recent Comments

  • Jennifer Engwirda on WA: Q&A Procedure for Election or Removal of Council Members
  • Jennifer Engwirda on WA: Q&A Procedure for Election or Removal of Council Members
  • Jennifer Engwirda on WA: Q&A Procedure for Election or Removal of Council Members
  • Veronica Connolly on WA: Q&A Common property damage caused by the Lot Owner?
  • Liza Admin on VIC: Q&A Approval for Renovations / Changing Appearance of the Lot
  • Will Marquand on QLD: Q&A Can I Access Body Corporate Records?
  • Liza Admin on ACT: Q&A Who Pays Strata Insurance Excess as Outlined in UTMA 2011
  • HS on NSW: Q&A Keeping Pets in a Strata Building
  • Ron Shepherd on QLD: Q&A Responsibility for maintenance of common property
  • Liza Admin on QLD: Owner Improvements

WEBSITE INFORMATION

  • Privacy Policy
  • Terms and Conditions of Use
  • Terms of Use for Comments and Community Discussion
  • Advertising Disclosure
  • Sitemap

SCA Membership

SCA WA Membership

ASK A STRATA QUESTION

Disclaimer

The opinions and/or views expressed on the LookUpStrata site, including, but not limited to, our blogs and comments, represent the thoughts of individual bloggers and our online communities, and not those necessarily of LookUpStrata Pty Ltd. In all instances, information should not be taken as advice and independent legal advice should be consulted.

CONTACT US VIA EMAIL

Copyright © 2021 · LookUpStrata ® Pty Ltd · All rights reserved