Demystify Strata Series #4
In this series, we will cover topics including understanding special levy payments, paper-based meetings and expenditure approvals, rooftop solar installations, and managing committee members based overseas.
As the CEO of Premium Strata, I often receive questions during General Meetings, in publications, and through direct messages that seem straightforward but are made more complex by evolving regulations and the multi-faceted responsibilities in strata schemes. To provide clarity, I’m launching a blog series to demystify strata management and tackle these practical questions head-on. Stay informed and empowered with our Demystify Strata Series.
Please note, the following posts address specific scenarios and may not apply to your scheme. Feel free to reach out to us if you have any further questions!
In the realm of strata living, special levies can sometimes catch residents off guard, especially when faced with unexpected financial burdens. We recently received a query from a strata owner in NSW regarding a special levy imposed by their Owners Corporation.
💡 Consider this Scenario: A strata owner, particularly a senior citizen, expresses concern over their ability to pay a one-off special levy of $100,000 divided between 33 units within a 6-week timeframe. They inquire about alternative payment options and question the rationale behind this levy.
🔍 Insight: The imposition of a special levy often indicates that the Owners Corporation needs additional funds to undertake substantial remedial works, as mandated by statutory obligations or to cover unforeseen circumstances that have not been budgeted for. While this may come as a surprise to some residents, it’s essential to understand the necessity behind such levies for maintaining the integrity and safety of the building.
If you find yourself in a situation where paying the levy upfront poses financial strain, it’s advisable to reach out to your strata manager promptly. They can assist in presenting your case to the Owners Corporation for consideration of a payment plan tailored to your specific needs. Payment plans typically span a 12-month period, ensuring more manageable installment payments.
It’s worth noting that each application for a payment plan is assessed on merit, and the Owners Corporation may request proof of any financial hardship. By engaging in open communication and exploring alternative payment arrangements, strata communities can better support residents facing financial challenges.
The approval process for installing sustainability infrastructure, such as solar water systems, can sometimes raise concerns, especially when aesthetic preferences clash with sustainability goals.
We recently received a question from a strata owner in NSW seeking clarity on whether a fellow strata member could prevent their solar water system installation due to concerns about its visual appearance.
💡 Consider this Scenario: A strata owner in NSW wants to install a rooftop solar water system on their individual roof, but a majority of 52% of strata members oppose the installation, citing visual appearance as their primary concern. However, this system wouldn’t be visible to the rest of the property.
🔍 Insight: To approve the installation, the Owners Corporation must pass a sustainability infrastructure resolution. According to NSW legislation, less than 50% of the vote can block the resolution, meaning that if 52% vote against it, your installation could be blocked. However, you do have potential recourse. The NSW Civil & Administrative Tribunal (NCAT) may find that the Owners Corporation unreasonably refused your proposal. Mediation is required before taking this step, and it is recommended to seek legal advice before proceeding to NCAT.
As sustainability initiatives like solar installations become more common, understanding the balance between aesthetics and environmental benefits is key in strata communities.
Navigating expenditure approvals within a strata community can sometimes be complex, especially when it comes to significant repair and maintenance works. We recently received a query from a strata owner in NSW regarding the legislative requirements for approving expenditure over a certain threshold.
💡 Consider this Scenario: A strata owner in NSW is seeking clarification on whether it’s a legislative requirement for the Strata Management Committee to hold a “Paper Meeting” to vote and approve expenditure on repair and/or maintenance works exceeding $5,000.
🔍 Insight: According to legislation, there is a prescribed limit on spending by an owner’s corporation, currently set at $30,000. This means that any proposed expenditure exceeding this amount requires obtaining at least 2 independent quotations. Additionally, legal fees are subject to similar restrictions.
Regarding the role of the strata committee, it’s important to note that they cannot make decisions on matters that the owners corporation has determined should be decided only in a general meeting. However, internal limits on spending may exist to ensure responsible financial management, preventing the strata managing agent from committing funds without prior approval from the strata committee.
As strata communities navigate expenditure approvals, understanding both legislative requirements and internal processes is crucial for effective decision-making and financial transparency.
Strata committee meetings can sometimes pose logistical challenges, especially when a committee member is overseas or unable to attend in person. A recent question from a NSW strata owner addressed whether an overseas committee member can appoint a replacement or participate via video conferencing. Let’s explore this further.
💡 Consider this Scenario: A strata committee member is overseas and unable to attend an in-person meeting. Can they appoint a replacement, or alternatively, attend via video conferencing while other members are physically present?
🔍 Insight: Yes, as per Section 34 of the Strata Schemes Management Act, 2015 (NSW), an “acting” member may be appointed with the consent of the strata committee. This acting member must be an owner or a company nominee eligible to be a member of the strata committee. While acting as a member, they are entitled to fully participate in the meeting and are considered a member for the duration of the meeting.
Alternatively, the absent member can also participate via teleconferencing or video conferencing if the meeting is set up accordingly. This option provides flexibility and ensures that all committee members can contribute, regardless of their physical location.
Understanding these provisions helps strata communities maintain efficient communication and decision-making, even when members are unavailable in person.
These Q&As were first addressed via the LookUpStrata ‘Ask A Strata Question’ program.
