This article about a majority lot owner in QLD who is using their entitlements to run the complex has been supplied by Frank Higginson, Hynes Legal.
Question: We have a majority lot owner who owns almost half of the units in our complex. They are effectively running the complex, making unreasonable decisions, spending money from the sinking fund and raising levies. What can we do?
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We have 21 units in our complex, 9 owned by one family group who basically dictate everything.
They decided that they wanted different locks on their mailboxes and apartment doors so had the locksmith create a second master key system for their units only. They paid this bill from the admin fund.
The chairman of the committee tried to bully our onsite manager into prioritising his unit above all others in the letting pool and when they refused he had a Remedial Action Notice issued to the manager accusing her of erecting scaffolding and installing air conditioners to his apartment with a QBCC licence.
He then organised for an increase in our levies of 250% above the last levy and increased the amount of spending allowed by the Committee. All of this was achievable due to the fact that the one family group (he is not part of the group) hold the majority of votes.
To date over $50,000 has been spent in legal fees from our sinking fund and apart from the fact that it is morally wrong, it is a clear case of bullying and I do not believe body corporate funds should have been spent.
He has also written to all owners telling them that the manager is unlicenced, unregistered and unfit to manage their units. Now there are only 7 other owners, including me, still in the letting pool. Despite the manager’s best interests, it is affecting bookings as all of the owners who are no longer in the letting pool have put their units with the same property manager who is not only making her life hard but also ruining the good reputation of our complex by the number of bad reviews his guests leave i.e. no linen in the apartment, rubbish in the bins/fridge, etc. HELP!
Answer: Owning more lots that anyone else does not give you the right to ignore what the BCCM Act requires.
This is very dysfunctional.
While there is nothing in the BCCM Act about the rights of a minority member of a body corporate there are very much obligations about acting reasonably.
If what you say below is correct, then to me it seems that the body corporate is NOT acting reasonably.
I think it is time for the minority group – including the resident manager – to get some legal advice about how to manage their way back to a position where they have some control. That may include seeking the appointment of an administrator to the body corporate, especially if he decision making is as appalling as you make out. There is a process for this which requires some proper strategy.
Owning more lots that anyone else does not give you the right to ignore what the BCCM Act requires.
Do you have a majority lot owner in your complex? If you have a question or something to add to the article, please leave a comment below.
Read more:
- QLD: That’s it for contribution schedule lot entitlement adjustments
- QLD: Bullying in Strata! Some Committees are Extremely Unreasonable
This post appears in Strata News #315.
Frank Higginson
E: [email protected]
P: 07 3193 0500
W: Hynes Legal
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We are in a block of 5 with 3 of the one family voting together on every motion since buying in 18months ago and not considering the minority owners. The Strata manager does not include the minority owners in any communication going to this family eventhough there are 5 committee members.
This response from Frank Higginson:
Owners are entitled to participate in the affairs of the body corporate, but they aren’t entitled to have their way. The question is what decisions are being made and whether they are reasonable. Another way to look at this would be whether the minority owners are being oppressed. If they are just being outvoted, then that is a different story.
They are absolutely entitled to access the body corporate records and participate at committee level though.
We have a caretaker / owner who’s taking over aswell, but getting the units and the complex so run down, that he
wants us to give him our properties. He has taken over everything, the body corp fees are out of control. Our units are appalling, holes in the walls, ceilings, mattresses disgusting, bathrooms untouchable and floors need a high pressure hose to be cleaned.
Can someone please help ?What do we do ?
The Caretaker of CMS owns 35 lots out of 73 units after having purchased 7 of these after the 2019 AGM so he may already have purchased more by now to give himself majority ownership of units.
At 2019 AGM he voted in favour of his own DOV for 5 year extension and also raised the caretaker fees by 0ver $800 per lot.
What I noticed on the AGM Minutes is that the Director of the Caretaker Company personally owns one unit. His company gives him the proxy to vote on the other 35 lots owned by his company of which he is the sole Director.
His company website claims to have developed the village and is still running it.
The spirit of the Body Corporate is broken with owners lining up to sell off their investment property.
How can this be legal? BCCM hotline and the Commissioner office say nothing can be done.
Hi Janet
We’ve received this response from Frank Higginson, Hynes Legal:
There is a case to be run at some stage about oppression of the minority, but in the meantime, there are no conflicts of interest at general meeting. People can vote directly in favour of their own interests, which can then commercially disadvantage others. A key question is whether the body corporate acted reasonably in voting the way it did. There is lots of grey in these ones for the time being.