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Hi all
I hope that you can help with this issue.
i am an investor who owns a unit in a 36 apartment strata block. All apartments currently have balconies and the balcony railings are common property.
Owners have been given a choice about some work which is required to these balconies. They can either enclose the balconies fully with windows or replace the balcony railings with a more modern design (the current railings are quite old and in need of renovation/replacement).
The EC has presented a costing proposal which involves those owners who are choosing to enclose the balconies to pay in full for the work required. this seems consistent with legal advice as this is a change to common property, requested by those owners, and so should be paid for by those owners in their entirety.
With regards to the replacement of balcony railings, legal advice has been obtained by the EC which states that there is an argument that this work should also be paid for by lot owners because it is an ‘improvement’ which can be levied to those individual lot owners whose balcony is being improved.
Other owners (myself included) have obtained legal advice which says that this is incorrect and these sort of changes (i.e. a modernisation by way of replacing the balcony rails with a more modern design but still serving the same function – i.e. a balcony rail) to common property should be paid for by way of a levy in accordance with unit entitlements.
Does anyone know what the most correct legal answer is to the question of whether a replacement of balcony railings which are common property should be paid for by lot owners individually or borne across all units by way of unit entitlements? I don’t think the fact that some owners have chosen to enclose their balconies should make a difference to the answer and I imagine it would be similar to a situation where some units in a block have balconies and some don’t.
Look forward to any guidance as this is really proving a troublesome matter.
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The key to this question is whether or not the current balcony balustrades are safe (and I don’t mean compliant with current standards – that’s a whole other issue). If they are still OK but unsightly, then this is an improvement. If they are unsafe, then this is an owners corp responsibility. Having said that, let’s not forget who the Owners Corp are – you guys! This is not a freebie.
However, what really baffles me about this is the potential for scattered appearance with some balconies filled in and some others not. It’s like the building will be pixillated. And who will have responsibility for the maintenance and repairs of these enclosed balconies?
I think your Owners Corp should step away from this half-baked plan and let those who want to enclose or upgrade their balconies do so at their own expense and with by-laws to ensure they will have responsibility for their ongoing maintenance.
But I wonder if perhaps someone on your EC is pushing this plan because they will get what they want out of it.
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.
Iain asked…. Does anyone know what the most correct legal answer is to the question of whether a replacement of balcony railings which are common property should be paid for by lot owners individually or borne across all units by way of unit entitlements?
I agree with Jimmy’s comments about the Owners Corporation (O/C) backing away from what appears to be an ill-conceived proposal, and further advise that O/Cs cannot raise levy contributions other than to all Owners (who as Jimmy advised collectively comprise the O/C) in accordance with the units-of-entitlement (U.O.E.) allocated to their respective Lots – that is it cannot, as you suggest is being canvassed by the Executive Committee (E/C), recover the costs of replacing balconies only from the Owners whose Lots are involved.
So the legal advice obtained by the Executive Committee (E/C) is incorrect, and that obtained by you (Iain) and some other Owners is correct.
In summary, whoever it is that commissions the works pays for them, but irrespective of who that may be under the scenarios now being contemplated by the E/C, both involve alterations or additions to, or erecting a new structure on the Common Property and they’re not matters to which an E/C itself may consent.
Rather, prior to a consideration of the Special By-Law that will be necessary in order to assign responsibilities for the maintenance, repair, and replacement of those items, a “special resolution” will first need to be put before a General Meeting of the O/C, where ≥75% of all those voting there, as calculated from their individual U.O.E. (i.e. a “poll vote”), would need to do so in favour in order for either scenario to pass; Sect 65A of the NSW Strata Schemes Management Act (1996) applies.
Iain – I stated before that whoever it is that commissions the works pays for them, and that stands but with the rider originally mentioned by Jimmy to the effect that if the existing balcony railings are “safe” and some individual Owners for whatever other reason want those replaced, then as with some others who prefer to enclose their balconies, those Owners must obtain the consent of the Owners Corporation (O/C) under Sect 65A, and then pay for and maintain their works under the provisions of a Special by-Law.
Similarly, if a motion is put and is specially resolved (i.e. ≥75% majority) for the O/C to commission the works, then it (collectively) pays for them, depending upon available funds, from its Sinking Fund and/or by a Special Levy – both funded by all Owners in accordance with their Lots’ U.O.E.
I think those provisions are pretty clear, but I’m a little confused by your statement (post #4) about a “different outcome” being already specially resolved at a General Meeting; in which case that decision did in fact “force” that outcome and in so doing brought the current debate to an end – unless of course its been since overturned by a opposing special resolution or by a decision of the NSW Civil & Administrative Tribunal (NCAT).
Lastly, neither your O/C nor its individual Owners can contract out of the Law that in this instance comprises all provisions of the NSW Strata Schemes Management Act (1996) SCMA, so any Deed of Agreement that purports to do that would have no standing.
@Iain said:
I cannot be compelled to do this work (at my own cost) and if the Owners Corporation decides that they want to do it in order to keep the look of the building consistent,I think they must be pulling your leg because if they wanted to keep the look of the building consistent they wouldn’t be allowing a patchwork of enclosed and unenclosed balconies (must admit I don’t know what a horizontal spandrel is even though I’ve goggled it but I’m still no wiser).
They cannot force you to make any changes and any changes others make needs to be approved by a Strata vote of 75% in-favor and a bylaw registered such that the cost of the installation and upkeep is met by the owners who make the upgrade.
They can pass a motion with 75% in favor to enclose ALL the balconies and for the cost to be borne by the Strata, so it depends if 75% of the owners are in favor of enclosing the balcony. I’m not to sure what would happen if 75% voted to enclose all the balconies but some refused to have it done.
Iain, in an effort to clarify responses to your post/s I’ll contribute the following…..
Iain said ….. I think I understand more clearly that I don’t have to replace these (balcony railings) but as they aren’t a safety issue (they just look old and ugly) if I do choose to replace them as I’m now entitled to do given the 65A motion which has been passed, I should pay for the work required to alter those myself.
Correct
Iain said ….. the 65A resolution also attempts to compel other owners who are not enclosing (such as myself) to install matching spandrel on our balconies which is not required for fire compliance or BASIX but is merely required so that each balcony looks consistent. If I understand the summaries above, I cannot be compelled to do this work (at my own cost).
Correct
Iain said ….. and if the Owners Corporation decides that they want to do it in order to keep the look of the building consistent, then they can vote on that and the cost would be paid for by way of unit entitlements.
Correct, and without a Special By-Law being properly resolved and Registered on the Strata Plan’s Title, then the Owners Corporation (O/C) cannot prescribe those matters of style and construction that it desires, and furthermore, as its responsibilities to properly maintain its Common Property are unfettered under the Act, and as those additions and improvements that may be optionally undertaken by Owners under its past Sect 65A Resolution will naturally form part of that Common Property, it will additionally be responsible to maintain those.
So if the O/C doesn’t wish to be responsible for that on-going maintenance and repair of those balcony enclosures and new railings that individual Owners have at their option installed, then before anything else happens it needs to agree by special resolution at a General Meeting to Register that Special By-Law, so that with those Owners’ prior written consent, it can then legally transfer those responsibilities to them AND additionally mandate those matters of style, construction materials, and features (such as the spandrel) that Owners who by their choice act upon the Sect 65A Resolution must then comply entirely.
I think it’s time for you to do some lobbying in order to secure the 25% of like-minded Owners that’s necessary for you to collectively “requisition” the Secretary to convene an Extra-Ordinary General Meeting in order to put a ring-fence around this nonsense.
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