New Balconies, can the 75% rule be applied?

This is how I see it (and others may have different opinions). There are two scenarios that could come into play here.  The first is a “user-pays” arrangement. where only those who want the balconies pay for them.

Under this method, the Owners Corp is not paying for the new balconies – just four of the five  owners who want one.  However you would need the support of 75 percent of all the owners voting at a general meeting to pass the by-laws required to get this through.

Now it may be that the other owners could decide they have no dog in this fight so they abstain or at least enough of them support the motion to get it passed.

What happens then is that you have one owner who doesn’t want a balcony and four who do.  The question then arises, is is feasible to attach only four balconies?

I find it hard to envisage an economically viable construction method that would allow this to happen but assuming there was a solution, you build four balconies and leave the fifth apartment as is.

However, it may be that the owner of the fifth apartment doesn’t have the money to pay for the construction of their balcony, in which case, you might find a way to allow them to participate without their having to find the money all in one go (a strata loan for the whole project, for instance, or a private arrangement with the other owners).

But bear in mind that the argument that this will enhance the value of their property will not hold water if they have no intention of selling – self-funded retirees are often in this position, desperately trying to avoid increases in spending.

A longer shot would be the Redevelopment option in what we’ve been calling the “forced sale” provisions of the Act, which are explained here. Loosely speaking, you would come up with a plan that gained the support of 75 per cent of all owners in the block to redevelop five apartments by installing balconies. 

The plan would be constructed so that the five affected apartments would be the only ones that paid for this. At the end of a lengthy and fairly complex process, the fifth apartment would have the choice of either buying in or selling their apartment at an agreed market value.

Now, apart from the time factor, this process would have to be seen to be scrupulously fair, to the point of generosity, and all the costs, including legal provisions, would have to be borne by the five lots that were having balconies installed. 

Considering the hoops to be jumped through and the obstacles to be surmounted, the recalcitrant owners would have plenty of potential for obstructing and delaying the process … but then that could be an expense for them with no gain if, in the end, they were forced to either pay for a balcony or sell out.

The interesting aspect of the Renewal process in the Act is that there is no requirement to show that the improvements are necessary – just that they are desired.

Talk to an experience strata lawyer – if you push ahead with either plan, you are going to need one.