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
