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QNA Does the committee has a power to reduce an OC's levy contribution?

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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QNA OC's on Special Resolution


29 Nov 2022

Question: We need to carry out substantial repairs on the building. A special levy of $12,000 has been billed to all lots. Does this decision need a special resolution to proceed?

We need to complete some large concrete and balcony works at our building. Most owners agree to this work being done, however, a few days before the AGM we were sent a letter stating the quoted amount for the job and that each owner would be billed $12,000 per lot. This amount was due to be paid in 28 days. Works are planned for early next year.

The job is not urgent and my understanding is that to strike this type of levy there needs to be a special resolution (75% in agreement). Can you please clarify if this decision needs to be voted on to proceed?

Answer: An ordinary resolution (or unobjected interim ordinary resolution) may be sufficient to raise the funds.

(Sections 52 and 53 of the Owners Corporations Act 2006 provide that a special resolution is required to carry out significant works to the common property if a planning permit is required for the works and or the budget required for the works is more than twice the annual budget.
If $12,000 required by each owner for the concrete and balcony works does not fit the above, then an ordinary resolution (or unobjected interim ordinary resolution) is sufficient to raise the funds.

Rochelle Castro
RC & Co Lawyers