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Interesting tidbits in strata law

By Frank Higginson31 Jul 2012

Interesting tidbits in strata law

For all its ups and downs, one constant about the strata industry is that it rarely has a dull moment. From a legal perspective, strata law is still a relatively new beast. This area of the law has only been alive for about 20 years. Even the most experienced of us in this area learn something new every day.

One of the more popular formats for these e-newsletters seems to have been the ones with bite size takeaways. Here are some issues that we think might be of interest to those in the strata industry.

Committee initiated newsletters

How many committees circulate a regular newsletter to owners keeping them up-to-date with body corporate developments? An adjudicator has ordered that the cost of circulating a newsletter is not a proper body corporate expense.

Many committees issue circulars around AGM time. Some are ostensibly to inform owners of what is going on, and some are blatant material lobbying for re-election. Owners can send what they like to other owners in their own right, but be careful sending lobbying material on the body corporate account.

If the committee is going to circulate a newsletter, it should be included in the committee explanatory schedule in a general meeting notice.

Bankrupting owners

Have you ever been advised that one way to recover outstanding levies is to commence bankruptcy or winding up proceedings against the owner?

These are not considered ‘debt recovery proceedings’ as contemplated by the BCCM legislation. These types of proceedings are a restricted issue, meaning a committee cannot initiate them. They require a special resolution at general meeting.

Allocation of part of an exclusive use area

An adjudicator recently ordered that if two owners wanted to reallocate part of an exclusive use area between them, the body corporate is responsible for all costs of ensuring that a new CMS is recorded to recognise that partial reallocation. That includes having the reallocated area properly surveyed (which can cost thousands of dollars) if the registrar of titles requires it.

Financial – or not?

Presenting a cheque for payment of a body corporate debt (ie levies) before the start of a general meeting means the owner can exercise voting rights at that meeting. An administrative nightmare could potentially follow if the cheque does not subsequently clear as the vote/s would no longer count and some results would have to be changed. This would be impossible to do if there was a secret ballot.

The final note we will make is that adjudicator’s orders are not binding. While they are useful guides, they do not set a precedent. Every situation is different. As always, you should seek advice if you want to be sure.