This article discusses strata levy increase disclosure, examining whether AGM minutes and levy motions should clearly explain the extent of levy increases so owners properly understand what they are approving.
Question: A strata fee increase was voted on and accepted at the AGM. The strata manager failed to reveal the extent of increases proposed and may have hidden the information behind strata jargon. Should minutes be clearly stated so lot owners are aware of what they are accepting?
Our strata fees increased by 60%. My fees jumped from $1175/quarter to $1750/quarter.
The fee increase was voted on and accepted at the AGM. However, the strata managers failed to reveal the extent of increases proposed. The minutes showed only each unit’s share of the increase. The increase was not made clear, and I believe may have been deliberately concealed by strata jargon not understood by a majority of owners. When the new strata fee invoices were distributed with the 60% increase, there was an outcry.
Under the Act, are minutes required to be understandable to the layman? Should this have been handled differently?
Answer: If Levies need to be amended subsequent to the AGM, there is some flexibility in the way to present proposed resolution/s to members of the strata company.
I’m pleased to advise that the short answer is: possibly!
Whilst the Budget and Levies are voted upon at each Annual General Meeting as required by Section 102 (Budget) and Section 100 (Levy Contributions), if the Budget or Levies need to be amended subsequent to the AGM, then as per Section 120(3) there is some flexibility in the amended Act to put the proposed resolution/s to members of the strata company in either of two ways:
- at a general meeting (i.e. convene an Extraordinary General Meeting).
- outside of a general meeting as prescribed by Regulation 89 of the Strata Titles (General) Regulations 2019.
For something as important as proposed changes to the Budget and Levy Contributions, I would recommend that the Council of Owners convene an Extraordinary General Meeting (EGM) for that purpose.
That will ensure that sufficient notice is given to all proprietors, and will enable all proprietors who choose to vote to do so in the exactly the same manner as they would have done at the AGM when the current Budget and Levies were approved.
This post appears in Strata News #560.
Andrew Chambers Chambers Franklyn Strata Management E: andrew@chambersfranklyn.com.au P: 08 9200 4200