What’s the magic number of members on the committee?
Page 12 | Premium Strata
New committee, new goalswhat about the 10 year plan?
Page 20 | QIA Group
Strata plan vs. common property memorandum: Who’s responsible for the roof membrane?
Page 30 | The Strata Collective
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plan vs. common property memorandum: Who’s responsible for the roof membrane?
How do we stop residents from washing their car with the fire hose?
If the hose reel water supply is fed from domestic/ drinking water, there is no legal reason it can’t be used.
Regardless, hose reels are not manufactured for regular use. The owners corporation should create a by-law preventing its use so the fire hose does not wear out.
A practical solution may be to install a lockable cabinet for the whole hose reel openable with a break glass &/or key.
Leanne Habib, Premium Strata:
Can a resident use the fire hose to clean his car on common property.
Draft a by-law to prevent unauthorised use (tampering, interfering, removal) of all fire safety equipment installed at the scheme.
Rob Broadhead, 2020 Fire Protection:
If the hose reel water supply is fed from the fire hydrant system, using the fire hose to wash a car will contravene the water supply regs because hydrant water is unmetered. This can result in large fines (circa $10,000) from Sydney Water.
Yes, a by-law could be drafted to prevent unauthorised use (tampering, interfering, removal) of not only the fire reel, but any other fire safety equipment installed at the scheme.
If the hose is simply a common property hose, individual owners should not be using that supply for their private purposes. It is common for strata schemes to install a lock on common property taps (excluding fire hose reels) to ensure only the authorised agents/ contractors of the owners corporation use their water supply.
Rob Broadhead | 2020 Fire Protection rob.broadhead@2020fire.com.au
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If
our strata manager is retiring, should the OC pay for the EGM to change managers?
We would need to review the specific terms of the agreement between the owners corporation (“the client”) and strata managing agent (“the agent”) to understand a few key elements to answer this question.
Typically, we would look for answers to these questions:
1. When the agent was appointed, did the motion or their agreement grant them delegated authority to perform the functions and duties of the secretary (which extend to convening a general meeting)?
Our strata manager is retiring. Can they charge our owners corporation for an EGM to change managers?
You can find the answer to the question in the agreement.
2. Does the agreement grant the agent full authority to convene a general meeting? Or is the agent required to seek instructions from the client?
3. Does the agreement stipulate whether or not the duty or function of preparing for, attending, chairing etc. is a service provided by the agent on an additional fee basis?
4. Are there specific terms of the agreement that refer to the client’s rights in the event that the strata managing agent winds up their business? For example, the Strata Community Association (NSW) agreement (used by most strata management businesses) has clause 7 which specifically talks about the circumstances of transferring an agreement from one agent to another.
Ultimately, the answer to the question is found in the agreement. New South Wales does not have a mandated uniform agreement that must be used by all agents, so terms may vary.
Tim Sara | Strata Choice tsara@stratachoice.com.au
Strata Window & Door Projects under the DBPA Fast Fact Sheet:
Seamless Compliance
We have had many conversations within the strata community to address some of the misconceptions around the impacts of the Design and Building Practitioners Act on window and door replacement projects. Below is the first in a series of FAQs that Windowline will share with our network. If you have any questions around changes to remedial projects and the steps to ensure project compliance, get in touch with our team.
Does window replacement need DBPA regulated design? No.
Generally, under the State Environmental Planning Policy, window replacements are categorised as exempt development as they are non-structural. Consequently, they typically fall outside the bounds of the Design and Building Practitioners Act therefore do not require regulated design.
Does balcony door replacement need DBPA regulated design? No.
Similar to window replacement, balcony door replacements are typically considered exempt development under the State Environmental Planning Policy so also do not require regulated design.
**However, this status is contingent upon the condition of the substrate beneath the balcony door. Should the substrate necessitate structural or waterproofing work, the replacement may fall under the Design and Building Practitioners Act, thereby necessitating a regulated design.
FAST FACT 3 FAST FACT 4
Who prepares a regulated design? Architects and engineers.
A regulated design must be prepared by a registered design practitioner. While various professionals can take on this role, it is essential to note that engineers, particularly those with expertise in structural and waterproofing aspects, are often best suited for preparing regulated designs under the Design and Building Practitioners Act. Engaging an engineer ensures that technical aspects are thoroughly assessed and that the design complies with the relevant building standards and regulations.
Who undertakes the work of the compliant regulated design? A building practitioner.
To comply with the Design and Building Practitioners Act, any works that fall under the scope of the Act must be undertaken by a registered building practitioner. As such, it is imperative that a registered building practitioner is engaged to complete these works. Engaging a registered practitioner ensures adherence to the requisite standards and regulations, safeguarding the quality and compliance of the works performed.
Windowline is not only a registered building practitioner with strong connections to accredited design practitioners but is also fully capable of undertaking the works required under the Design and Building Practitioners Act. By choosing Windowline, you gain access to expert advice, and you can rely on us to efficiently manage and execute your project, ensuring professionalism and compliance every step of the way.
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What is the ideal number of members for an owners corporation committee, and why?
Five is the magic number.
The maximum number of committee members under the Act is nine. I recommend an odd number because it avoids a tie vote or a deadlock. Generally, I think five is a good number, five to seven. If you have a higher number than that, it’s hard to get a quorum and hard to get a majority decision because you’re waiting on more decisions.
However, if there’s a lot to do, you want more hands on deck sharing the load, but ideally, five is the magic number.
Is replacing an existing air conditioner unit in the lot considered a minor renovation?
Does replacing an existing air conditioner unit in lot require renovation approval from the owners?
Not all buildings follow the rules properly, and renovations are sometimes carried out without proper approval, or approval of renovations is not properly enforced.
Given the specific wording of regulation 28(d) the Strata Schemes Management Regulation 2016 (NSW), that mentions “installing a reverse cycle split system air conditioner” but does not explicitly mention “replacing” an air conditioner, we need to interpret whether replacing an air conditioner can be considered a minor renovation. Here is a more detailed analysis:
Legislative Framework
Strata Schemes Management Act 2015 (NSW)
• Section 110(3) states that the carrying out of work prescribed by the regulations is considered a minor renovation.
Strata Schemes Management Regulation 2016 (NSW)
• Regulation 28(d) specifies: “Installing a reverse cycle split system air conditioner.”
Analysis
The regulation explicitly mentions “installing” but is silent on “replacing.” Since replacing an air conditioner typically involves installation work, it can reasonably be argued that replacement falls within the scope of similar activities covered under minor renovations. However, this is an interpretative approach rather than a clear-cut legislative statement.
Practical Approach
1. Owners Corporation Consultation: Present the case to your owners corporation or strata committee. Explain that replacing an air conditioner involves similar work to installing one, and seek their agreement to treat it as a minor renovation.
2. Legal Advice: Obtain a legal opinion from a strata lawyer to confirm this interpretation, especially if there is any dispute or hesitation from the owners corporation.
Conclusion
While the regulation does not explicitly state that “replacing an air conditioner” is a minor renovation, it is reasonable to interpret it as such, given the nature of the work involved. However, to ensure compliance and avoid potential issues, consult with your owners corporation and consider seeking legal advice for a definitive interpretation.
Tim Sara | Strata Choice tsara@stratachoice.com.au
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Apartment Flood from Overflowing Gutters: Should the Owners Corporation Pay?
My apartment flooded due to a lack of maintenance from the OC. Is it reasonable to hold the OC liable for the damage?
My apartment recently experienced water damage due to overflowing gutters during heavy rain. The property manager and I submitted a claim for $1400 to my landlord insurer to cover the cost of lifting, drying, and deodorising the damaged carpet. The insurer denied the claim because a plumber’s report linked the flooding to clogged gutters with leaves and debris. We believe the lack of gutter maintenance by the owners corporation (OC) caused the issue. The OC has now confirmed they will clean the gutters every six months.
Is my claim against the OC for reimbursement of the repair costs reasonable given the situation?
Pursuing a claim on the contents insurance policy is standard procedure. If the contents insurer believes the OC is responsible, they can pursue a claim against the OC.
In situations where a property manager and a tenant lodge a claim for damages caused by the owners corporation’s failure to maintain common property, such as clearing gutters, there are several important steps to consider.
First, it is advisable to pursue a claim on the contents insurance policy. If the contents insurer believes the owners corporation is responsible for the damage, they can pursue a claim against the owners corporation. This is typically the standard procedure followed in such cases.
Leaks from common property, including issues like blocked gutters, are generally covered by contents insurance policies. It seems unusual for the contents insurer to deny the claim due to a common property leak, therefore, understanding the specific reasons for the denial of the claim is crucial.
I first recommend asking for a formal denial letter that clearly outlinies the reasons for denying your claim. Make sure this letter references specific clauses in your insurance policy. If you believe the insurer has not provided sufficient grounds to deny your claim, you should consider challenging the decision via the insurer’s dispute resolution process.
Alternatively, if the owners corporation is believed to be liable, a claim can be pursued against them through the processes advised by Fair Trading: Strata disputes.
New committee, new goalswhat about the 10 year plan?
If the committee adopts a 10year plan and programmed maintenance, what happens if, in the future, a new committee decides on a different set of goals? Do we start over again?
There is always going to be change.
Craig Welsh:
I split the terminology. I call a 10-year plan a forecast, and annual committee decisions are the budgets. If you have expenditures like renovations planned for the next few years, and then the plumbing blocks and other unexpected maintenance items pop up, there go the upgrades. Things change and the forecast changes.
When you sit down to look at your forecast every year, you set your budget. If the two don’t align, it’s probably time to update your forecast. While they align, life is good. Your levies are still going to work, your general plans are still going to work, and you can agree and set that budget. If they don’t align, it’s time to consider your costs. You need to be able to look into the future and say, “Yes, we’re going to have the money when we need it.”
Marcus Munstermann:
There is always going to be change. Let’s look at the decision for something like retrofitting EV chargers. If the decision has been made to allocate funds, it’s budgeted in the first instance and then the next committee comes along and says they don’t want to do that, those things are in flux anyway.
While the budget says that we’re putting aside twenty thousand dollars to spend on EV charging, you still have to have a discussion, motions, quotes, all of those things come into play. That will end up driving the outcome.
QIA Group info@qiagroup.com.au
What if an NCAT order includes an unachievable timeframe?
What can an owners corporation do when an NCAT order includes an unachievable timeline to complete works? The works require a structural engineer’s scope, the issuance of tender documents, the selection of a tenderer and the completion of the works. The owners corporation should go back to NCAT to have that timeframe extended.
If the timeframe is unrealistic, the owners corporation should be trying to go back to NCAT to have that timeframe extended. That should initially be done by way of an attempt to reach an agreement with the apartment owner on an extension of time that’s appropriate and an explanation should be given to the owner and, if necessary, NCAT, as to why the work can’t be completed within the timeframe specified by NCAT.
Adrian Mueller | JS Mueller & Co Lawyers adrianmueller@muellers.com.au
Water damage from an AC unit?
Who’s liable?
Our air conditioner’s pipework passes through a common wall. The air conditioner only services this unit. Water has entered the unit via the air conditioner’s pipework and damaged some of the internal linings. Who is responsible for the repairs? Is it the unit owner or the owners corporation?
Firstly, this will depend on the insurance cover chosen by the owners corporation.
Who owns the pipe?
Under the Strata Schemes Development Act
2015 No 51 [NSW] the following definitions apply:
• common property, in relation to a strata scheme or a proposed strata scheme, means any part of a parcel that is not comprised in a lot (including any common infrastructure that is not part of a lot).
• lot, in relation to a strata scheme, means one or more cubic spaces shown as a lot on a floor plan relating to the scheme but does not include any common infrastructure unless the common infrastructure is described on the plan, in the way prescribed by the regulations, as a part of the lot.
• common infrastructure means
1. the cubic space occupied by a vertical structural member of a building, other than a wall, or
2. the pipes, wires, cables or ducts that are not for the exclusive benefit of one lot and are—
a. in a building in relation to which a plan for registration as a strata plan was lodged with the Registrar-General before 1 March 1986, or
b. otherwise—in a building or in a part of a parcel that is not a building, or
3. the cubic space enclosed by a structure enclosing pipes, wires, cables or ducts referred to in paragraph (b).
As the pipes are for the air conditioner and the air conditioner is ‘exclusive use’, providing the building does not pre-date 1986, the pipes belong to the lot owner.
Who is responsible for the internal repairs?
Firstly, I assume the lot is not one of two in a two lot scheme and the rights under the Strata Schemes Management Act section 160 (4) have not been implemented.
In this case, the first part of the who is responsible for the repairs will depend on the insurance cover chosen by the owners corporation.
There are insurance policies that, while they will not respond to the cause of the leak, may respond to the resultant damage (in this case, the internal damages). There are also policies that will not respond unless there has been an ‘event’ that caused the leaking.
Therefore, your first port of call might be the insurance policy chosen by the owners corporation. If the cover is granted, the leak ‘via the pipework’ will be subject to point 1, and the resultant damage will be the insurer’s responsibility.
Secondly, if we assume the insurance chosen is one that will not respond, the answer as to who is responsible reverts back to the first point as to who owns and is responsible for the pipe.
Thirdly, if the lot is one of two in a two lot scheme and the rights under the Strata Schemes Management Act section 160 (4) have been implemented, the pipe, and therefore, the responsibility, will always remain with the lot owner.
Scott Driscoll | Driscoll Strata Consulting scott@driscollstrataconsulting.com.au
Company nominees and proxies. What’s the difference?
In our 95 lot building, two companies hold proxies or positions on the committees. What can we do?
I live in a building with 95 apartments. A specialist disability accommodation company holds 12 apartments, with two on the executive committee, and another owner with close ties to the developers holds six or seven proxies. Under the new rules, are companies reduced to five per cent and rounded down? Do both companies hold five per cent? Can two people from one company be on the executive committee?
Company nominees and proxies are two different means of voting and two different types of limitations.
It sounds like you have two different individual owners appointing different individuals as either a company nominee or a proxy. Company nominees and proxies are two different means of voting and two different types of limitations.
A quick recap on proxy limitations in NSW.
• There are limitations on who can hold a proxy, which are:
• building managers, on-site residential property managers and strata managers who hold a proxy cannot use it to vote on a matter if it means they would obtain (or if it would assist them obtain) a material benefit or a pecuniary interest; and
• an original owner may not use a proxy (or a power of attorney) under the contract for sale of a lot or a contract that is ancillary to the contract for sale.
• There are limitations on the number of proxies a person may hold at a general meeting, which are:
• Schedule 1, Clause 25 “(7) …The total number of proxies that may be held by a person (other than proxies held by the person as the co-owner of a lot) voting on a resolution are as follows:
a. if the strata scheme has 20 lots or less, one,
b. if the strata scheme has more than 20 lots, a number that is equal to not more than 5% of the total number of lots.”
From your comment, I expect that the other entity who holds 6 or 7 proxies meets all the above criteria.
Company nominees also have limits, which are set out below:
• Schedule 1 Clause 25A “(2) A company nominee, or a person acting under a power of attorney, may exercise voting rights on behalf of not more than—
a. if the strata scheme has not more than 20 lots—1 owner, or
b. if the strata scheme has more than 20 lots—5% of the total number of lot owners.”
Noting that a power of attorney who is a family member must not be taken into account in this limitation.
In your situation, the specialist disability accommodation company (being one owner) can appoint one person to be the company nominee for all its lots. If the scheme has more than 20 lots, a person could be the company nominee of more than one company lot owner, provided they are the company nominee only for 5% of the number of lot owners for the scheme.
Breaking it down, if the scheme has ten lots and lots 1 and 2 are owned by ABC Pty Ltd and lots 3 and 4 are owned by XYZ Pty Ltd, the company proxy or power of attorney for ABC Pty Ltd could only exercise voting rights for lots 1 and 2. The same person could not also be appointed as the company nominee for XYX Pty Ld.
If the scheme has 21 lots and the remaining 17 lots are owned by different individuals, the same company nominee or power of attorney still could not be appointed for ABC Pty Ltd and XYZ Pty Ltd to exercise voting rights for lots 1, 2, 3 and 4 as together, the two lot
owners are more than 5% of the total number of lot owners. Why? There are 19 total lot owners. The calculations are: 2 lot owners / 19 total lot owners X 100% – 10.5%.
If the scheme has 50 lots and ABC Pty Ltd owns lots 1 and 2, XYZ Pty Ltd owns lots 3 and 4, with all remaining 46 lots owned by different people, one person could be appointed by the company nominee for all lots 1, 2, 3 and 4, as together the two lot owners (ABC Pty Ltd and XYZ Pty Ltd) are less than 5% of the total number of lot owners. Why? There are 48 total lot owners. The calculations are two lot owners / 48 total lot owners x 100% = 4.16%.
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Strata plan vs. common property memorandum:
Who’s responsible for the roof membrane?
My strata plan indicates that a waterproof membrane on my open roof area belongs to my lot. However, the common property memorandum attached to the by-laws states it is common property. Which document takes precedence?
My lot leads onto an open roof area in our building. Who is responsible for the waterproof membrane in this space? The reading of a note on the strata plan suggests that it is part of the lot, but the common property memorandum attached to the by-laws says it is common property. Which document is correct?
The strata plan notation prevails, but get legal advice.
The short answer is that the strata plan notation prevails. The reason for this is section 136(2) of the Strata Schemes Management Act 2015, that states:
1. A by-law has no force or effect to the extent that it is inconsistent with this or any other Act or law.
In this instance, the common property memorandum is passed in contravention of the by-laws so that the strata plan notation would prevail.
Due to the probable amount of money involved in the works, I suggest having a lawyer provide quick advice for the owners corporation, which can be retained into the future should this item ever be raised again.
Rod Smith | The Strata Collective rsmith@thestratacollective.com.au
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Restricting lot access to the common laundry facilities
Three lots in our small building don’t have washing machine facilities and use the shared laundry room. Can I propose a motion restricting access for only units without lot facilities and introducing a small usage to offset costs?
I live in an eight unit building. Five owners have a washing machine connection inside their lot. The three lots without a washing machine connection have not been renovated since the building was built in 1963. They use the common laundry room. One lot has a washing machine space and connections inside their unit but always uses the shared laundry room.
Can I submit a motion to the next AGM to restrict access to the laundry room? I propose we install a lockable door on the room and create a by-law to restrict access for the three units without laundry facilities in their unit. I’d also like to implement a small usage fee for these units to help offset costs. Is this possible?
Discuss your ideas with all other owners.
There are a few things you need to consider, starting with sections 108 and 139 of the Strata Schemes Management Act 2015.
If you are seeking to install a door and lock to a room that currently does not have a door, you are seeking the owners corporation to make changes to the common property and a special resolution will need to be passed in order to achieve this. Section 108 of the Strata Schemes Management Act 2015 governs how the owners corporation may make changes to common property: View – NSW legislation
You may need to consider that for the special resolution to pass, there must not be more than 25% of the value of the votes cast against the resolution. Refer to section 5 of the Strata Schemes Management Act 2015: View – NSW legislation
Section 139 of the Strata Schemes Management Act 2015 provides that a bylaw “must not be harsh, unconscionable or oppressive”: View – NSW legislation
In 2020, the NSW Civil & Administrative Tribunal provided some examples of the questions that may lead to a by-law being considered harsh, unconscionable or oppressive:
1. Does the by-law provide for unnecessary or unreasonable differential treatment between lot owners or occupiers?
2. Does an aggrieved lot owner have a reasonable expectation (in the circumstances of the particular case) that any restriction(s) would not be required or imposed?
3. Does the by-law provide for reasonable exceptions?
4. Does the by-law provide a “complete embargo” as found in John Maait Properties?
5. Is it appropriate that an owners corporation establish some control and is the level of control appropriate?
6. Does the by-law include provision for consideration of individual needs that may not be necessary in relation to the majority of owners or occupiers?
7. Does the by-law allow particular works or benefits but at an unreasonable cost?
8. In considering each of the above factors (and any other factors which may suggest themselves), does the by-law include that element of extremity necessary to meet the high standard set by s.139
This is taken from the decision in the case regarding The Owners Strata Plan No 91157 v Yoolee Holdings Pty Ltd Limited: The Owners – Strata Plan No 91157 v Yoolee Holdings Pty Ltd Limited; Yoolee Holdings Pty Limited v The Owners – Strata Plan No 91157 [2020] NSWCATAP 6 (16 January 2020)
Please note my response above does not address all the issues which may arise. It would be best to consider the provisions and examples referred to above and discuss your ideas with all the other owners. You should obtain legal advice prior to proposing any motions or by-laws for approval at a general meeting.