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S108 of the NSW legislation includes a paragraph:
(4) If a special resolution under this section does not specify who has the ongoing maintenance of the common property concerned, the owners corporation has the responsibility for the ongoing maintenance.
It is also possible that the owners corporation could decide (by special resolution) not to maintain the property and remove it instead!
The best option would be to create by-laws authorising the existing arrangement in retrospect and, as part of that process, obtaining from each owner a commitment to maintain their own equipment. This becomes difficult if the existing owners did not install the equipment and purchased the lot with an assumption that equipment on the common property (and not mentioned in a by-law) was Owners Corporation equipment and therefore maintained by the OC.
- The Owners Corporation is able to make rules concerning how the common property is usable or accessible to owners and others. This rule would appear to be allowable.
- It is unlikely to be regarded as discriminatory because the reason for the rule directly relates to the category of resident to which it applies. That is, it relates to the safety of children, and it applies to children. If a query were to be raised it would be assessed only on whether or not the safety of children had been properly assessed.
- It is unlikely to be regarded as fraud against a minority because it confers no specific advantage on those proposing or supporting the rule.
So I would recommend getting out there and collecting proxies.
The OC concern about possible liability has some justification. If an accident occurred and it was deemed the fault of the child or parent, then the OC might be sued on the basis that they did not take steps to prevent the child or parent putting themselves in danger – ie, imposing a ban or putting up warning signs. Whether that claim would succeed is unpredictable. For instance, if the OC passes the bylaw, but a parent was able to show that it was not enforced, then a claim might succeed! On the other hand, if there was no by-law, but plenty of warning signs for both drivers and parents, then the claim might fail. What would be certain is that there would be legal costs, but that should be covered by insurance.
The SM may be referring to the part where the funds are repaid. The Act requires that the repayment must be in the form of a special levy, and that would require a General Meeting. S76(2).
Generally, failure to specify any proportion is taken to mean that the two parties have a ‘joint and several’ responsibility. That is “a claimant may pursue an obligation against any one party as if they were jointly liable and it becomes the responsibility of the defendants to sort out their respective proportions of liability and payment.”
The wording of the by law seems to also support that in the second part, where the two proprietors are lumped together as if they were one.
I would guess that if this ever had to be determined in some legal process, the division would be based on unit entitlements. It’s possible that UE corresponds to floor area, and that is the basis for the recalculation. But in absence of some such determination I believe that the Managing Agent cannot impose any particular proportion on either lot.
We had a similar situation when the Committee decided they didn’t want large trucks using the driveway so they put a height barrier at the entrance, without approval from the owners. They refused to remove it until an owner who is also a lawyer put the case. IIRC the points he made were:
The owners own the common property, not the SC.
The owners have a right of access to ‘their’ property.
Any change that restricts that right of access in any way must be a decision of the owners, not the SC.The Committee thought about this for a while and reluctantly agreed, and took the barrier down. They might have got some other advice of their own, which would have been the same. The reason for the concern in this case was the impact that not being able to bring a furniture van to the front door might have on resale prices (a fire engine would have driven straight through the barrier).
A lot of very bad advice here. It is true that an OC is not automatically considered an employer as a consequence of ‘being in business’. It is also true that “A contractor is not employing someone” – but only if you can establish that the person doing the work really is a contractor, and that can be very difficult to determine. For instance, many people laying carpet are actually engaged as ‘casual contractors’ but, in the event of an accident, would probably be considered an employee of the company that you signed the carpeting contract with (because that’s what they do for a living, they work almost entirely for the one business, they don’t provide their own tools or transport, they do get training, they don’t advertise their own services, etc, etc). But the carpet company doesn’t want to pay WC insurance, so they have decided that their employees are actually self-employed sole traders and they don’t need a policy to cover them. If they have an accident and they discover they aren’t covered like they thought they were, they will come looking to the OC for compensation, and they might succeed. The best protection is a properly checked subcontractor’s statement, but are you sure that your managing agent is getting one for every subcontractor, that it’s up to date, and that it has been checked for gross stupidities that might invalidate it? Do you know that the young kid who sometimes helps the gardener put the bins away for a few dollars is covered by the gardener’s WC policy, or that the gardener doesn’t have a policy because he considers himself a sole trader who doesn’t need one? Not really an issue when the kid drops a bin on his foot – a big issue when he steps out in front of the garbage truck.
Even a claim that cannot succeed (such as some tradespeople who make a career out of having an accident the first day on the job) can tie up the OC in a massive amount of time, trouble and money defending a case.
It’s insurance – it covers the times when someone stuffs up, makes a mistake, accidentaly enters into an employer situation, and suddenly becomes liable. Declare wages paid as zero and the premium will be nominal.
WC Insurance is strongly recommended. Coverage for an organisation that does not employ anyone is nominal – less than $100 pa from memory.
The problem is that you can employ people and not know it! If you engage a contractor, and that contractor is not self-employed, and if the managing agent fails to get a subcontractor’s statement from the contractor, or if the managing agent gets the subbies statement but doesn’t check it properly (most of them don’t know what to look for) then you could find that the contractor has a claim against you. You could even be liable for a contractor engaged by an owner that the OC didn’t know about, for instance in an emergency.
The definition of who is or isn’t an employee is complex, and could include volunteer workers.
You will not be refused WC insurance. Claims history can be used to calculate your premium, but is very unlikely to apply in this case. It cannot be used to refuse insurance. For the small cost involved it is an essential protection.
If your managing agent is making these sorts of comments then you have an additional problem of ensuring that they are managing subcontractors properly and that they are keeping adequate records. For instance, the subbies’ statements I referred to above – these are essential for proving that the subby was not an employee.
You need to confirm that the Managing Agent is obtaining these statements in all cases, that they are up to date, and that they are properly checked. For instance, many subcontractors answer the question about having their own WC insurance by quoting a personal accident insurance policy – this is not the same, and in the event of an accident they will not be considered as covered, meaning that the responsibility might fall on the OC.
Also, many subcontractors don’t actually know whether they are sole traders or employees! You do not have to validate the information provided, but it is essential to check that the form makes sense. Your managing agent must be familiar with the rules and must have procedures in place to ensure that you do not get hit with a claim.
It seems that the 75% rule may now me achievable, but there are a number of additional steps required. Most importantly, there has to be an actual redevelopment offer on the table. So you cannot be forced out because the other owner is planning to sell to a developer – there must be an actual deal in place. If it is a sham deal that the owner has concocted to get control of the premises, the Court should be able to detect that, and it would not be approved.
That deal must be fair, having regard to a wide range of factors, including costs you may incur in relocating. You will be able to object if you regard it as unfair, and the arbitration process is set out in the Act.
The process must have been conducted in good faith. In your case, I would guess that this requirement would be examined very carefully, because the 75% used to approve the action was held by associated persons. For instance, if the owner used their 75% voting power to increase your contributions or make other changes designed to force you out before the approval is completed, that could be taken as a clear indicator of bad faith, and the plan could be rejected.
If the other owner is able to come up with a plan that meets all those requirements and which makes it through the Court approval process, the likelihood is that the amount received for your unit will be considerably in excess of the current market value of the lot. That has been the experience to date.
There is free advice and advocacy available to certain people – you should check if you qualify:
https://www.fairtrading.nsw.gov.au/sites/ftw/Tenants_and_home_owners/Strata_schemes/Collective_sale_and_renewal/Strata_Collective_Sale_Advocacy_Service.pageI can’t imagine what argument that owner could be relying on. If the premises subject to lease are no longer available, due to events beyond the control of the lessor, then the lease terminates. There should be provisions in that lease for how that happens, but that’s between the owner and his tenant. It’s no different than if the property was resumed, or any number of other circumstances where the property is no longer available. Commercial or non-commercial makes no difference.