Alterations/Renovations to Common Property in a Strata Scheme
/Common Property
The common property of a strata scheme is that part of the land (and improvements to it) which is not comprised in the lots on the strata plan. Common property is defined in section 3 (1) of the Strata Titles Act 1985 (WA) (“Act”) as meaning:
a. so much of the land comprised in a strata plan as from time to time is not comprised in a lot shown on the plan; and
b. any leasehold interest acquired by a strata company under section 18; and
c. the lot or lots shown on a survey – strata plan as common property.
In Western Australia, common property is owned by all the proprietors in undivided portions determined by the unit entitlement allocated to each lot. An underlying principle of the Act is that changes or improvements to the common property can only be done if all owners agree either by.
This article provides a brief overview and guidance of the governing law in WA, and touches also on some issues that we have seen arise from time to time concerning strata scheme common property.
Powers of the strata company
Although the common property is owned jointly by the proprietors of all lots, it is the strata company that has the power and authority to control and manage the common property. Under section 35 of the Act, the strata company has a duty to:
a. enforce the by-laws;
b. control and manage the common property for the benefit of all the proprietors (section 35(1)(b)); and
c. keep in good and serviceable repair, properly maintain and, where necessary, renew and replace the common property (section 35(1)(c)).
The powers and duties of the strata company shall be exercised and performed by the council of the strata company. The members of the council shall consist of a group of lot proprietors elected at each annual general meeting to represent all the lot proprietors in the strata scheme. At the meetings of council, all matters are determined by a simple majority vote. It follows that alterations or improvement works to common property that can be:
a. categorised as coming with the obligation of a strata company to control and manage the common property; and
b. deemed to be for the benefit of all the lot proprietors,
may escape the need for a resolution without dissent and be passed by a simple majority vote by the council at a general meeting. However, each case will involve an objective assessment and will depend upon the facts of each case.
Amendments to Common Property
All proprietors are equally entitled to the use and enjoyment of common property unless the strata company takes one of the lawful avenues open to it under the Act to bestow a special right or interest in the common property, or a portion of it, upon one or more proprietors. In the absence of any specific statutory authority enabling the strata company to carry out changes to the common property (beyond works encompassed within the control and management as outlined above), section 42(1) of the Act provides that a strata company may make by-laws, not inconsistent with the Act for its corporate affairs and any other matters relating to the management, control, use and enjoyment of the lots and any common property.
The Act deems schedule 1 and 2 by-laws to be by-laws of a strata company and provides that they may be amended, repealed or addressed by the strata company in the following manner:
a. by resolution without dissent (or unanimous resolution, in the case of a two-lot scheme) in the case of schedule 1 by-laws; or
b. in accordance with any order of a court or the State Administrative Tribunal (“SAT”) or any written law; or
c. in any other case, by special resolution.
Further, section 42(8) requires that a by-law which seeks to confer on a proprietor exclusive use, enjoyment of or special privileges in respect of the common property must be made by a resolution without dissent. It is no doubt a recognition of each lot owners proprietary interest in the common property that underlies the requirement for a resolution without dissent.
Possible issues
What happens, however, if you are faced with a situation where:
a. you wish to make changes to the common property; and
b. a unanimous resolution or a resolution without dissent is necessary,
but one of the individual lot proprietors is not in favour of the resolution?
Section 85 of the Act provides that a proprietor may apply to the SAT for an order that a strata company consent to a proposal by a proprietor to effect alterations to common property on the grounds that the strata company has unreasonably refused to consent to that proposal.
What amounts to “unreasonable refusal”? This will depend on the facts of each case and the level of support or dissent for the resolution will be a factor taken into account by the SAT, as well as the reasons for dissent. Further, section 51 of the Act provides that where a resolution without dissent is necessary but the resolution is only supported to the extent necessary for a special resolution, a proprietor included in the majority in favour of the resolution may apply to the District Court of Western Australia to have the resolution declared sufficient to authorise the particular proposed act. If the District Court so orders, the resolution shall be deemed to have been passed as a unanimous resolution or a resolution without dissent, as the case may be.
Alternatively, the majority in favour of the resolution can seek to adopt a position that the proposed alterations to the common property fall within the strata company’s obligation to control and manage the common property. This position can then be put forward in a detailed proposal to the strata council to be dealt with in a general meeting.
At Edwards Mac Scovell, we can assist you to resolve any disputes in relation to your strata scheme and the common property. For further advice or assistance, please contact Maria Enright.