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Hi All
Our strata recently held an AGM – one of the motions was to impose a large special levy, even though there are sufficient funds in the sinking fund to cover the intended work.
At and before the meeting, it was pointed out that the imposition of a special levy in our circumstances was illegal (sufficient funds existed to cover the work).
The committe responded by introducing an amendment to incorporate the special levy amount into the sinking fund over a period of one year, and suggested this was a 'compromise'.
Unfortunately the meeting accepted this by a narrow majority, thinking it was genuine. However surely it is a sham and fraudulent to rename a special levy a short term contribution to the sinking fund. The strata manager refused to give an opinion on this tactic's legality.
Any suggestions about possible courses of action would be appreciated.
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When you say you have sufficient funds, does that mean to pay for the works and have enough money left in the bank to cover other incidentals?
Our complex has discussed previously that, should we need any major works, we would take some of the money out of the fund and organise a special levy with payments stretched over a number of quarters in order to “restock” the account. We would never leave less than $10,000. I believe that the current regulations for strata do state that there has to be enough money in the bank to cover an major repairs that may occur.
What can be done is that you can alert all owners to the fact that their money is being wasted.
Somewhere at the back of my mind there's a thought that you will also be taxed on the excess in the sinking fund. Since it's not ussed or allocated to projects that haven't been contracted out, I think the Tax Office considers it a profit and will tax you accordingly.
Don't quote me on that without checking with your strata manager but if it's true, then you'll be hit with a double whammy – an unnecessary special levy and then a tax on the excess.
Get a hold of your strata roll and write to or call every owner personally and tell them (in as unemotive language as possible) what the problem is and why they need to vote against this.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
Sorry to keep on about our tawdry affairs; but we do have a problem regarding gross abuses of owners rights. To update:
- It has been over 2 weeks since our AGM concluded; and no minutes have been received by owners.
- Fair Trading advise that the 'conversion' of a large special levy into a one year contribution to the sinking fund is at least improper, and likely illegal. Especially as there were already adequate funds to pay for the intended works. In addition there was no motion on the agenda dealing with this.
- Despite the lack of minutes owners have been issued with levy notices (up 70% on the usual). Tears are beginning to flow.
Do strata managers have any responsibility at all in ensuring that meetings are conducted and reported properly? Are owners fair game for any mugger that comes along?
Would really appreciate any suggestions.
A couple of things spring to mind. Firstly, if an item wasn't on the agenda than it has no legal standing and you should apply immediately to the CTTT to step in and halt the levy collection.
However, if the increased levies were on the agenda – even if it was just as a proposed budget – then you are stuck with them until you can have them changed.
The easiest way to change them is to organise another general meeting as soon as possible and make sure you have a majority of owners to approve the change.
Otherwise you could try fighting this through the CTTT.
Either way, the one thing NOT to do is to refuse to pay. All that means is that you will lose your voting rights and have to pay penalty interest.
The one thing in your favour is that all your fellow owners who didn't bother to read their agendas are now hurting financially. A jolt in the hip-pocket nerve gets people moving faster than any argument, however convincing.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
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