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Q&A Roof Replacement

Question:


The property is commercial. There are 4 units in the building. I own 1 unit representing 25% share allotment. Another owner also owns one unit , being 25% share allotment. Remaining 2 units owned by a charity organization, government funded ,representing 50% share allotment. Problem with roof leaking. Owner of the 2 units with unlimited funding and 50% share allotment wants a new roof at cost in excess of $250,000. Myself and the other owner want to repair the roof by a registered professional at a cost of $35,000. Together we have a 50% share allotment. Therefore, a stalemate exists. 2 votes versus 2. 
 
Can we be forced into paying the high cost of roof replacement rather than repair cost. There is no sinking fund.

 

Answer:


If the roof is considered common property in accordance with the Plan of Sub-division, the Owners Corporation has an obligation to repair and maintain it. Notwithstanding, if the replacement cost of $250,000 is more than twice your Owners Corporations’ annual budget, then a Special Resolution would be required to raise levies for this amount.
 
A Special Resolution requires 75% of owners to be in agreement, and therefore, with consideration to the lot liability and entitlement, yourself and the other single lot owner would formally be able to object or withhold your permission to grant the Special Resolution. If you have obtained reports and quotations stating the roof can be repaired,  then there is no reason why the other lot owners would not consider your proposal for repair with a professional registered contractor.
 
Further, a Special Resolution will be required even if $250k is not more than twice the annual fees provided that a building or planning permit is required for the replacement option, and provided that repair rather than replacement is a possibility.
 
Finally, if no permit is required and the amount is less than twice the annual fees (so an ordinary resolution is only needed), the stalemate is determined by the chairperson casting an extra vote.

Vanessa Bucci
Managing Director
MBCM Bayswater & Ringwood



 

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Does the Owners Corporation Committee have power to reduce levies for a particular Lot?

Question: A landlord has suffered loss of rent due to repairs to common property. Does the OCC have the power to reduce that lot’s levies by the amount of the lost rent?

 

Could an OCC pass a motion in favour of reducing a particular lot owner’s levy for a fixed period?

Authorised works are being conducted on a lot owner’s property. The works have resulted in loss of rental to the landlord. The landlord is looking for the OC fees to be reduced by the amount of the lost rent.

Does the OCC have the power to reduce the levy or would an Extraordinary General Meeting be required?

 

Answer: The committee does not have a legal power to reduce an owner’s levy contribution

 

In Victoria, the committee does not have a legal power to reduce an owner’s levy contribution.

That said, it is lawful for the committee to pass a resolution that the OC would provide a credit to the owner’s account as a result of the circumstances described, being loss suffered by the owner caused by the OC to the owner’s property. Alternatively, the committee could decide to pay the owner cash for the loss the owner has suffered.
 

Rochelle Castro
RC & Co Lawyers


 

 

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Q&A - Balconies Inspections


13 Apr 2022

Question:

The owner’s corp chairman has contacted us stating he is ‘conducting inspections’ of lot owner’s balconies to see if any maintenance is required. If balconies are our responsibility cost-wise and we have no suggestion of any damage or cause for concern, does the committee have the right to come into our property for an inspection, seemingly without cause?

 

Answer:


The situation raises several issues and concerns which should be brought to the attention of lot owners and the chairperson either through their Strata Manager or by seeking further legal advice.
 
The first thing that comes to mind is to ask whether the Chairman is qualified to carry out such inspection? If so, does he/she meet the criteria of OH&S requirement to carry out the inspection work in a Strata complex?         
 
Unless there is visible evidence of balcony deterioration, which it isn’t in this case here, the onus is on the lot owner under Section 129 of the Act to properly maintain and keep in a state of good and serviceable repair any part of the lot that affects the outward appearance of the lot or the use or enjoyment of other lots or the common property, and maintain any service that serves that lot exclusively.
 
The second point to consider is to determine where the lot boundaries lie relative to Common Property, and depending on that determination, the Owners Corporation may have a responsibility to maintain the Common Property section of the balconies. The diagram below illustrates a section cut of a balcony base and the balustrade (side view) with median, interior and exterior line boundaries and shows which sections of the balconies are private and which part is common. 
 
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Furthermore, the most important part of the whole process is that the Owners Corporation should acknowledge and comply with the recent changes to the legislation. The Owners Corporations and Other Acts Amendment Act 2021 that came into effect on 1st December 2021 stipulates that an Owners Corporation can authorise a person to enter a Lot to carry out repairs and maintenance to common property. A notice of entry must be given to the lot owner, upon receiving at least seven days’ notice (or less in the case of an emergency), a Lot owner must grant entry to a person authorised by the Owners Corporation to carry out repairs, maintenance or other works to private property or common property in accordance with section 47(1), 47(2), 48(3), 50 and 51.
 
Complying with the above guidelines would be vital for the Owners Corporation to consider to be able to carry out the required inspection work to the balconies in accordance with Owners Corporation Act 2006 and the Acts Amendment Act 2021.  
 
Further information on the changes to the legislations can accessed through our website https://mbcm.com.au/blog/Authorised-Entry-to-a-Lot/


Rawand Kaka
Head of Strata