As a solicitor, I thank the gods that people cannot get along. On my knees, I also give thanks to the Lord that the NSW Government has seen fit to put people from all different backgrounds into one little building. Because of the NSW Government all these people find good reason to argue with each other.
When disputes occur, and there is no ability to resolve the issue between mediation and negotiation, the Owners Corporation and lot owners bring in the sharks. Those human sharks dressed in penguin suits who normally reside around the areas of Philip and Macquarie Streets Sydney, are referred to as solicitors and barristers. Costly to home, costly to keep and usually unpalatable to all parties. Nevertheless, if people could find a way to get on, the sharks disguised as penguins would not be needed.
The Strata Schemes Management Act 1996 (SSMA) set up some guidelines for the appointment of solicitors. We thought it might be useful at this time to set out the steps which must be taken by a strata manager when appointing a solicitor.
Section 80D of the SSMA establishes two criteria when appointing a solicitor:
1. Legal proceedings which would normally be below $10,000; and
2. Legal proceedings which exceed $10,000.
The concept of “normally be above” is a protection under the Act to ensure that solicitors do not issue a monthly bill which is below $10,000. The SSMA requires the Owners Corporation to consider a particular issue as one action, and if that single action exceeds $10,000 certain steps must be taken.
Where an action is below $10,000 the following steps must be taken:
• A cost agreement and Cost Disclosure must be obtained from the prospective solicitor who would be appointed to handle the action or give advice;
• The executive committee may appoint the solicitor by executing the cost agreement and returning it to the solicitor; and
• Pursuant to Section 230A of the SSMA the Cost Disclosure must be circulated to all Lot owners.
For actions above $10,000 the following steps must be taken:
• A Cost Agreement and Cost Disclosure must be obtained from a prospective solicitor;
• Notice must be given of an EGM moving the following motions:
“It is resolved that the Owners Corporation take …… action and appoint …… solicitors to undertake the action”
• The EGM must be convened and resolve by ordinary resolution that the solicitor must be appointed;
• The Owners Corporation must execute the Cost Agreement and return it to the solicitor; and
• The Cost Disclosure must be circulated to all lot owners.
The Act is very clear in relation to the circulation of the disclosure document. It is not sufficient for this Cost Disclosure to be merely placed on a notice board. It is absolutely vital that it is circulated to all owners. This can be done by mail or email. This exemplifies why keeping email addresses of all Lot owners is absolutely paramount as a means of saving costs.
We plead for all Owners Corporations to get on, and if they cannot get on, mediate and conciliate. If you cannot get on and need a fight, Leverage Australia is always willing to assist!
Cheers,
Bailey Compton
Leverage News 