Finally there has been a conclusive decision from NCAT regarding lot owner compensations.

The President and Deputy President of NCAT have recently handed down an important decision. They have concluded that NCAT does not have power to award a lot owner compensation. This is a result of a failure by an owners corporation to repair defects in the common property.

This decision around NCAT and lot owner compensations is likely to be followed by NCAT in the future and resolves a longstanding controversy about this issue.

What does this mean? Read our recent cases regarding NCAT’s decision around Lot Owner Compensations

For NSW strata legal, building defect or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

There are many strata managers who are preparing and registering consolidated sets of by-laws for the strata schemes they manage.

We have recently come across several by-law consolidations prepared by strata managers that contain critical and costly errors.

In many cases, the professional indemnity insurance policies held by strata managers may not cover the negligent preparation of consolidated by-laws.

Here are some examples of mistakes we have seen… By-law Consolidations – When they go Wrong?

CLICK HERE FOR HELP WITH YOUR BY-LAW CONSOLIDATIONS!

Does NCAT have power to make an order for the payment of money?

In a recent case, NCAT decided that it did not. The outcome of this case has created doubt about NCAT’s power to make money orders in strata matters.

The case touches on a broader controversy that is currently playing out in NCAT. That controversy relates to the fundamental question as to whether or not NCAT has power in strata matters to make money orders at all whether for payment of damages or the recovery of a debt.

So, how did this matter play out, does NCAT have the power in strata matters to make money orders?

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

In a recent decision that has produced a confusing outcome, the Appeal Panel of NCAT has decided that NCAT does not have power to award damages (but might be able to order payment of compensation) where there are defects in common property that an owners corporation does not repair.

The outcome of this case has added further uncertainty to an already uncertain area of law concerning NCAT’s power to order payment of money in strata disputes.

So, what power does NCAT have to order payment of compensation according to this recent case? Common Property, Strata Disputes, NCAT and Compensation Payments

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

Pecuniary Interest Disclosures – When are they Required?

When does a strata committee member need to disclose a pecuniary interest they have concerning a decision to be made by the committee?

The position is clear when a committee member has a direct pecuniary interest in a matter to be decided by the committee. A disclosure of that interest must be made by the committee member.

But what about indirect pecuniary interests? What are they and when do they need to be disclosed?

An example is where a committee member wishes to engage a company to carry out work for an owners corporation and his or her relative is a director or shareholder of that company. Is that an indirect pecuniary interest which must be disclosed?

The most likely answer is “yes”. This is because a committee member will have an indirect pecuniary interest if a person connected with them (such as a relative) has a direct interest in the matter to be decided by the committee.

What are the Grey Areas?

There are some grey areas. For example, can it be said that an indirect pecuniary interest arises when the committee member’s relative is merely an employee of the company that will be engaged by the owners corporation? In those circumstances, does the relative (as an employee rather than director or shareholder of the company) stand to benefit from the company’s appointment by the owners corporation?

The answer to that question is also most likely “yes” because the legislation simply requires the relative to have a “direct interest” (not necessarily a direct pecuniary interest) in the matter in order for the committee member to fall under an obligation to make a pecuniary interest disclosure.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

Getting Your By-Laws Right: Making Landlords Accountable

In 2018, NCAT decided that a landlord is not responsible for ensuring that his or her tenants comply with the by-laws that apply to a strata building.  That decision was confirmed by the Appeal Panel of NCAT in Feletti -v- Eales [2019] NSWCATAP 100.

Therefore, if a tenant is breaching a by-law, the owners corporation of the building is not normally entitled to take action against the landlord to require the landlord to ensure that his or her tenant complies with the by-law.

This means that the owners corporation needs to take action against the tenant instead of the landlord which it may not want to do because tenants come and go and it can be difficult to enforce NCAT orders against them.

So, what is the solution to this problem for owners corporations?

There is, however, a solution to the problem.  An owners corporation can make a by-law that requires landlords to ensure that their tenants comply with the by-laws.  That by-law will give the owners corporation the right to take action against a landlord when his or her tenants breach the by-laws.

We have drafted that by-law and a number of strata managers have introduced the by-law into the strata schemes they manage.

We expect that the by-law will prove very useful for owners corporations who introduce it because it will allow those owners corporations to take action against landlords whose tenants are breaching the by-laws.

The by-law goes one step further and will also allow an owners corporation to take action against both landlords and tenants whose guests and invitees breach the by-laws.

Order Your By-law Here!

If you would like to find out more about the by-law, or you are interested in purchasing the by-law from us, please email us here or call 9562 1266 now.

From sunset clauses to cooling-off periods, changes to the strata laws are being considered all over Australia.

The first cab off the rank will be modifications to the Victorian strata laws, due to be implemented in the next couple of months. These changes will bring some of those laws into line with NSW strata laws.

Some proposed changes include:

1: Sunset Clause

The new laws will clean up the ‘sunset clawback’ regulations. The laws will  prevent property developers from deliberately delaying the completion of buildings, in order to invoke the sunset clause.

No longer allowed will be the cancelling of contracts and the readvertising of properties on the market, at a much higher price.

Get out clauses will also be introduced for people who’ve bought properties off the plan, and discovered their completed apartment is substantially different from what they’d agreed to buy.

2: Cooling Off Period

The cooling off period will be extended from five to 10 business days with limitations on the vendor’s ability to get purchasers to sign those rights away.

3: Proxy Farming

Committees will be reduced from 12 to seven members with restrictions on proxy farming and committee proxies.

 4: Voting Rights

Lot owners voting rights on contractual limitations will be banned. It’s also yet to be seen if this will affect the vetos on short term letting often pre imposed on purchasers of new buildings.

 5: Levies

Lot owners who default in paying their levies will incur more debt recovery costs but, on the other hand, for those people suffering hardship payment plans can be arranged.

 6: Renovations

Owners corporations will be able to set conditions under which renovations must be conducted, clamping down on rogue renovators, while rules that unreasonably prohibit the installation of sustainability measures will be invalid.

7: Smoke Drift

Rules to combat cigarette smoke drift will be allowed and residents made responsible for their guests’ behaviour, including being fined for any breaches.

 8: Penalties

Maximum penalties for rule breaches will be increased to $1,100, with the fines paid to the owners corporation. Voting thresholds for legal action will vary, depending on the level of courts involved.

If these laws are accepted,  we’ll see a huge step closer to a uniform set of national strata laws.

More Information

You’ll find more information (and proposed laws) at consumer.vic.gov.au/OCBill. These regulations reflect many of the NSW laws in place and how they’ll roll out nationally.

For NSW strata legal or levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

Can the chairperson of an owners corporation disconnect the hot water supply to common property showers in a swimming pool area without the authority of his owners corporation?

A recent NCAT case grappled with this interesting issue.

So, how did they resolve it? Hot Showers, Common Property and NCAT

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

Must strata lot owners pay, as part of their levies, maintenance of the common property they do not use?

Are all strata owners responsible for paying for the maintenance of every part of the common property even if some owners cannot or do not use part of the common areas?

Is it possible for an owners corporation to raise a differential contribution that is levied on some but not all owners or is levied in shares that are not proportional to the unit entitlements of the lots?

Here are some typical examples where owners often query if they should pay for maintenance of these areas:

• A strata scheme that contains multiple stages – should they pay for stage 2 if they’re in stage 1?
• The owner of a ground floor lot who does not use a lift servicing the upper levels of the building
• The owner who does not use recreational facilities such as a swimming pool, gym or tennis court

Are these exceptions or are common areas in strata residential blocks treated as a whole?

Read this paper to find out the true position – Common Property Use and Differential Levies in Strata Blocks

For NSW strata legal or levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.