Our 4 lot commercial building is at a stalemate over whether to repair or replace the roof — how do we resolve this?

VIC

Committee & Governance

Our 4 lot commercial building is at a stalemate over a roof repair. Two lots would like a repair and the other two want a new roof. How do we resolve this?

We have 4 commercial lots in the building. I own 1 unit representing 25% share allotment. Another owner also owns one unit being 25% share allotment. The remaining 2 units are owned by a charity organisation, that is government funded, representing 50% share allotment.

We have a problem with the roof leaking. The owner of the 2 units with unlimited funding and 50% share allotment wants a new roof at a cost in excess of $250,000. The other owner and I want to have the roof repaired by a registered professional at a cost of $35,000. We are at a stalemate with 2 votes versus 2.

Can we be forced into paying the high cost of roof replacement rather than the repair cost? There is no sinking fund.

If the cost of replacing the roof is high enough to warrant a special resolution, this needs 75% agreement to pass. If a special resolution is not required, the stalemate is determined by the chairperson casting an extra vote.

If the roof is considered common property in accordance with the Plan of Sub-division, the Owners Corporation has an obligation to repair and maintain it. Notwithstanding, if the replacement cost of $250,000 is more than twice your Owners Corporations’ annual budget, then a Special Resolution would be required to raise levies for this amount.

A Special Resolution requires 75% of owners to be in agreement, and therefore, with consideration to the lot liability and entitlement, yourself and the other single lot owner would formally be able to object or withhold your permission to grant the Special Resolution. If you have obtained reports and quotations stating the roof can be repaired, there is no reason why the other lot owners would not consider your proposal for repair with a professional registered contractor.

Further, a Special Resolution will be required even if $250k is not more than twice the annual fees provided that a building or planning permit is required for the replacement option, and provided that repair rather than replacement is a possibility.

Finally, if no permit is required and the amount is less than twice the annual fees (so an ordinary resolution is only needed), the stalemate is determined by the chairperson casting an extra vote.