skip to content
Law Handbook banner image

Strata and Community Titles

Property ownership in South Australia falls under three main categories:

  • Torrens Title
  • Strata Title
  • Community Title

This section is about residential strata and community titles. If you are planning to buy a strata or community titled property, there are some important legal matters that you should know. Community living offers some benefits but it does not suit everyone. Before you buy a unit or lot, think carefully about what is involved. You will be living in close proximity to others, possibly sharing walls and some facilities.

Each strata or community group, no matter how big or small, has a 'corporation', which is a legal entity like a company. All owners are automatically members of their corporation, and are bound by the rules of their corporation. The corporation is responsible for the maintenance and repairs of the common areas.

Strata Titles

Significant changes to Strata Title law came into effect on 28 October 2013. The Law Handbook sets out the law as of this date. A summary of the changes is available from the Attorney-General's Department.

A strata title is created by the division of land into separate units (at least two) plus common property [s 5]. The boundaries of a unit are defined by reference to the structural divisions in a building, not by reference to the land.

The law concerning residential strata titles is contained in the Strata Titles Act 1988 (SA), the Strata Titles Regulations 2003 (SA), and the common law, which is made up of the principles which courts have used to decide cases in the past.

All references to legislation and regulations in this Section are to the Strata Titles Act 1988 (SA) and the Strata Titles Regulations 2003 (SA).

In addition, the Strata Titles (Fees) Regulations 2001 (SA) set out the fees payable to the Registrar-General of the Lands Titles Office when forms need to be lodged with the Lands Titles Office in relation to a strata plan or strata corporation.

Since 1 June 2009, it has not been possible to deposit new strata plans under the Strata Titles Act 1988 (SA). New divisions now use the Community Titles Act 1996. Strata corporations existing at 1 June 2009 were not affected by the change and are still regulated under the Strata Titles Act.

The strata corporation

Every strata title property has its own strata corporation.

The role of a strata corporation is to administer and maintain the common property for the benefit of all unit holders, to administer all other property of the corporation, and to enforce the articles of the strata corporation [s 25 Strata Titles Act 1988 (SA)].

All unit holders are automatically members of the corporation [s 18(4)], but tenants are not.

Note that unit holders are guarantors of their corporation's liabilities, which means the corporation's debts are enforceable against each or any of the unit holders directly [s 21(1)]. If the corporation has a debt, the unit holders have, amongst themselves, the right of contribution to the debt based on their respective unit entitlements [s 21(2)].

The corporation must have a common seal [s 18(3)], which may be used for entering contracts, and must be used if the corporation wishes to amalgamate with another strata corporation.

The strata corporation can delegate some or all of its functions to a management committee and may appoint a strata manager or other such agent to assist with the management of the corporation.

The corporation can make rules which are binding on the corporation, unit holders and tenants regarding the use of common property and the units [ss 19, 20], providing that the rules do not contravene the Strata Titles Act 1988 (SA) or other laws.

Common property

The common property is held by the strata corporation in trust for all the unit holders [s 10 Strata Titles Act 1988 (SA)]. It is the responsibility of the corporation to maintain the common property, while it is the responsibility of individual unit holders to maintain what is not common property.

What is common property?

The question of what is and what is not common property is a difficult issue, and can cause many disputes. Generally speaking, common property is any land or space that is not within a unit [s 5(6)]. Unless a particular strata plan indicates otherwise, the boundary of a unit is the internal surface of the walls, floors and ceilings [s 5(5)]. In most strata corporations, the roof, guttering, external walls and foundations are common property. Internal walls are the owner's responsibility.

Common property also includes [s 5(6)]:

  • any pipe, cable, wire, duct or drain that is not for the exclusive use of a unit (any that service only one unit are considered part of that unit, not common property)
  • any structure that is not for the exclusive use of a unit installed before the deposit of the strata plan
  • any structure installed by a strata corporation as part of the common property
  • any other structure on the site committed to the care of a strata corporation as part of the common property.

In older strata plans that were deposited before 1 September 1988, the unit boundary was defined as midway between the surfaces of walls, floors and ceilings and this definition continues today, unless it has been changed by an amendment to the strata plan. Legal advice may be necessary to determine the correct boundaries of strata plans deposited before 1 September 1988.

A unit may also include an area defined on the unit plan as a 'unit subsidiary', which is not common property but an area for the exclusive use of a particular unit, for example a carport or garden [s 5(4)(e)]. Unless the strata plan explicitly states otherwise, a wall or fence between a building that forms part of a unit and a unit subsidiary to that unit is part of the common property [s 5(7)].

Powers of the strata corporation

Some of the powers of the strata corporation are to:

  • acquire, deal with and dispose of real and personal property (including an interest in a unit) and rights in relation to real and personal property [s 26(1)(a) Strata Titles Act 1988 (SA)]
  • borrow money, maintain bank accounts and invest surplus funds[s 26(1)(b), (c), (d)]
  • enter into contracts [s 26(1)(e)] (see Contracts below)
  • levy maintenance payments against unit holders [s 27(2)] (see Contributions below)
  • require a unit holder to carry out necessary work, such as internal plumbing repairs [s 28] (see Maintenance and repairs below)
  • do anything reasonable to enable it to fulfil its functions under the Act [s 26(1)(f)].

Contracts

The strata corporation may enter into any kind of contract [s 26(1)(e)]. It may do so either by using its common seal, or by authorising an officer of the corporation or an agent (such as a strata manager) to do so on its behalf [s 24].

Contributions

The corporation raises funds by levying contributions against all unit holders, in accordance with an ordinary resolution passed at a general meeting [s 27(2)]. The amount that each unit holder contributes to funds is normally calculated according to the 'unit entitlement' set out in the strata plan [s 27(3)(a)]. Put simply, a unit entitlement is the portion, or ratio, of the capital value of a unit as against the sum of the capital values of all the units [s 6]. The corporation may, by unanimous resolution, determine that contributions are paid on some other basis [s 27(3)(b)].

The corporation may, by an ordinary resolution at a general meeting, allow contributions to be paid in instalments, as specified in the resolution [s 27(4)(a)].

If contributions are not paid, they are recoverable as a debt [s 27(5)]; the corporation can sue the unit holder for the money.

An amount of interest payable on contributions or instalments that are in arrears may be imposed by the corporation, by ordinary resolution [s 27(4)(b)]. The amount of interest charged may not be more than 15% per annum, and interest cannot be charged on unpaid interest [reg 8A].

Maintenance and repairs - entry to premises

The corporation’s articles will usually impose a duty on a unit holder to maintain and repair their unit. If a unit holder does not do so, the strata corporation may give a unit holder written notice requiring them to carry out specific work by a certain time. If the work is not done in the set time, the strata corporation may, after giving at least two days notice in writing to both the unit holder and the occupier (for example, any tenant), authorise workers to enter the unit to do the work. [s 28(1), (2), (3)]

Similarly, the corporation may require and enforce work on a unit to remedy a breach of the Act or the articles even if the breach was by a former unit holder, an occupier (tenant) or former occupier [s 28(1)].

If an officer of the corporation or a person authorised by the corporation (such as a strata manager) is satisfied that urgent action is necessary to avert a risk of death, injury or significant damage to property, the officer or authorised person can, after giving whatever notice (if any) to the unit holder and occupier they consider reasonable in the circumstances, authorise entry to a unit for the performance of work reasonably necessary to deal with the risk. To enter the unit, such force as is reasonably necessary may be used [s 28(3a), (3b)].

The individual unit holder is liable to the corporation for the reasonable cost of work done [s 28(4)]. If the need for the work arose because of someone else, for example a tenant or previous owner, the unit holder can recover the cost as a debt from that person [s 28(5)].

Return of property

A strata corporation may require anyone in possession of any record, key, or other property of the corporation to return it to an officer of the corporation by a specified time. The person in possession of the property must be given written notice to return the property, and the specific person it must be given to must be stated in the notice [s 39].

Insurance

A strata corporation must have building insurance [s 30 Strata Titles Act 1988 (SA)] and public liability insurance [s 31]. A strata corporation with an administrative or sinking fund must have fidelity guarantee insurance from 27 October 2014 [reg 9(2)(b)], s 31(2a)]. It may also, by special resolution, decide to insure against other potential liabilities, for example, office bearer liability.

A unit holder, a mortgagee of a unit or a prospective purchaser or mortgagee of a unit may, by contacting the secretary of the strata corporation, request to see any or all of the insurance policies currently held by the corporation [s 32].

Building insurance

The strata corporation must insure buildings and building improvements to replacement value [s 30], which includes any costs associated with replacement, such as demolition, surveying, architectural or engineering work. The insurance must cover damage caused by the events, apart from subsidence, listed in regulation 10 Insurance Contracts Regulations 1985 (Cth) [s 30(3)]. Under no circumstances can a corporation permit each unit holder to take out their own individual building insurance instead of the corporation.

The corporation’s building insurance will not usually cover the contents of a unit, so occupiers may need to take out their own contents insurance.

Public liability insurance

The strata corporation must have public liability insurance for an amount specified in the regulations, which at November 2013 is at least $10 million [s 31, reg 9].

Fidelity guarantee insurance

A strata corporation with an administrative or sinking fund [reg 9(2)(b)] must have fidelity guarantee insurance [s 31(2a)] from 27 October 2014. A policy of fidelity guarantee insurance covers the risk of theft or fraud of the corporation’s funds by any person authorised to handle the corporation’s funds, including a manager. Although the requirement to have fidelity guarantee insurance is a new requirement from 27 October 2014, a strata corporation may already have fidelity guarantee cover included with its building insurance policy. The insurance cover must be for the amount of the maximum total balance of the corporation's bank accounts at any time in the preceding three years, or $50 000, whichever is higher [reg 9(2)].

Officers of the strata corporation

At all times a strata corporation must have a presiding officer, a secretary and a treasurer, who are appointed at a general meeting. One person may hold two or more of these positions. These officers must be unit holders (unless all the units in the corporation are non-residential). The strata corporation commits an offence if any of these positions is allowed to remain vacant for more than six months [s 23 Strata Titles Act 1988 (SA)].

Secretary

The secretary of a strata corporation has the following functions [reg 25]:

  • to prepare and distribute minutes of meetings of the corporation;
  • to submit a motion for confirmation of the minutes of any meeting of the corporation at the next meeting of the corporation;
  • to give the notices required to be given under the Act by the members of the corporation and the management committee;
  • to answer communications addressed to the corporation;
  • to convene meetings of the management committee; and
  • to deal with administrative and secretarial matters for the corporation and the management committee.

Treasurer

The treasurer of a strata corporation has the following functions [reg 25]:

  • to notify unit holders of any contributions to be raised from them in accordance with the Act;
  • to receive, acknowledge, bank and account for any money paid to the corporation; and
  • to keep accounting records and prepare financial statements.
Records

The strata corporation has a responsibility to maintain proper records. It must keep:

  • a register of the names of the unit holders (showing the unit holder's last contact address, telephone number and email address known to the corporation, and the unit holder's unit entitlement) for 7 years [s 39A Strata Titles Act 1988 (SA), reg 23];

  • minutes of meetings (both general meetings [s 40] and management committee meetings [s 35(8)]) for 30 years [reg 10]
  • accounting records relating to receipts and expenditure (of both the corporation [s 40] and the management committee [s 35(8)]) for 7 years [reg 10];

  • notices and orders served on the corporation for 7 years [s 40, reg 10];

  • copies of correspondence received or sent by the corporation for 7 years [reg 10];

  • notices of meetings of the corporation and its management committee for 7 years [reg 10];

  • documents received by the strata corporation from the original registered proprietor under s 38(3)(b) and (c) for 30 years [reg 10].

A strata corporation must ensure that a statement of accounts is prepared for each accounting period [s 40], and must keep each statements of account for 7 years [reg 10].

Access to information by unit holders

Insurance policies

A unit holder, a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit may, by contacting the secretary of the strata corporation, request to see any or all of the insurance policies currently held by the corporation [s 32 Strata Titles Act 1988 (SA)]. No fee is applicable.

If the applicant wishes to have copies of the current insurance policies, the request may be made either to the secretary or a member of the management committee [s 41(1)(b)]. If the applicant is the owner of a unit, a $5 fee applies [reg 11(2)(b)(i)]. If the applicant is a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit, a $35 fee applies [reg 11(2)(b)(ii)].

The corporation must make the information available within five business days after the request [s 32, s 41]. Failure to do so is an offence with a maximum penalty of $500.

Bank statements

On the request of a unit holder made through the secretary or a member of the management committee, a corporation that does not have a strata manager must provide a unit holder with quarterly bank statements for all accounts maintained by the corporation, and must continue to provide the statements until the person ceases to be a unit holder or revokes their application [s 41(1a)]. Failure to do so is an offence with a maximum penalty of $500.

If a corporation has a strata manager, application can be made to the strata manager for quarterly financial statements (see Duties of strata managers).

Other information in relation to a unit or the corporation

A unit holder, a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit (or someone on their behalf) may apply to the strata corporation, through the secretary or a member of the management committee, for access to the following information or documents [s 41(1)]. The information or documents must be provided within five business days after the request [s 41(1)]. Failure to do so is an offence with a maximum penalty of $500.

The corporation may reduce or waive any of the specified fees [reg 11].

Information to be provided:

  • particulars of any contribution payable in relation to the unit, including details of any arrears of contribution related to the unit;
  • particulars of the assets and liabilities of the corporation; and
  • particulars of any expenditure that the corporation has incurred, or has resolved to incur, and to which the unit holder of the unit must contribute, or is likely to be required to contribute.

If the applicant is the owner of a unit, no fee applies [reg 11(2)(a)(i)]. If the applicant is a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit, a $25 fee applies [reg 11(2)(a)(ii)].

Copies of documents to be provided:

  • the minutes of general meetings of the corporation and meetings of its management committee for such period, not exceeding two years, specified in the application;
  • the statement of accounts of the corporation last prepared by the corporation; and
  • the articles for the time being in force.

If the applicant is the owner of a unit, a $5 fee applies [reg 11(2)(b)(i)]. If the applicant is a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit, a $25 fee applies [reg 11(2)(b)(ii)].

Documents to be made available for inspection:

  • a copy of the accounting records of the corporation;
  • the minute books of the corporation;
  • any documents received by the strata corporation from the original registered proprietor under s 38(3);
  • a copy of any contract with a strata manager; and
  • the register of unit holders.

No fee applies to inspecting a copy of the contract with a strata manager or the register of unit holders. If the applicant is the owner of a unit, no fee applies to inspect other documents [reg 11(2)(c)(i)]. If the applicant is a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit, a $5 fee applies [reg 11(2)(c)(ii)] in relation to accounting records, minutes and s 38(3) documents.

Articles (Rules)

Articles are the rules of the strata corporation. While legal obligations under the Strata Titles Act 1988 (SA) cannot be avoided or changed, the articles are determined by the strata corporation itself.

The articles are binding on the strata corporation and the unit holders [s 20]. Articles that relate to the use of units or the common property are binding on tenants [s 20(1)(c)]. A unit holder who has a tenant in the unit must take reasonable steps to ensure that the tenant complies with the articles [s 20(2)].

Schedule 3 of the Strata Titles Act 1988 (SA) sets out the articles for all strata corporations. If a particular strata corporation wishes to adopt its own articles, or amend any number of its articles, it can do so [s 19(2)].

Some common provisions compel the owner or occupier to:

  • keep the unit in a clean and tidy condition
  • not interfere with lawns or gardens on the common property
  • not display signs without consent
  • not keep animals in or about the unit without consent
  • notify the corporation of changes in ownership or occupier
  • use the common property reasonably

What cannot be in the articles

dealing with a unit

A corporation cannot prevent a unit holder from selling their unit [s 19(4)(a)], or leasing or allowing someone to live in their unit [s 19(4)(b)].

assistance dogs and therapeutic animals

The articles may not prevent an occupier of a unit who has a disability (see s 5(1) Equal Opportunity Act 1984) from having and using an assistance dog or a therapeutic animal [s 19(4)(c), s 3(1)]. Similarly, a visitor to a unit who has a disability may not be prevented from using their assistance dog or therapeutic animal [s 19(4)(d), s 3(1)].

An assistance dog is an accredited guide dog or hearing dog, or a disability dog under the Dog and Cat Management Act 1995 [s 5(1) Equal Opportunity Act 1984]. A therapeutic animal is an animal, other than an assistance dog, certified by a medical practitioner as being required to assist a person as a consequence of the person's disability [s 88A Equal Opportunity Act 1984]

Articles that reduce the value of a unit or unfairly discriminate against a unit holder

Any articles that reduce the value of a unit or unfairly discriminate against a unit holder may be struck out by order of the Magistrates Court or the District Court [s 19A(1)].

The application to strike out the article/s must be made by a person who was a unit holder, which includes a person who has contracted to purchase the unit, when the articles came into force.

The application must be made within 3 months after the person (or either or any of the unit holders where the unit is held by 2 or more persons) first knew, or could reasonably be expected to have known, that the articles had been made [s 19(2)].

An application to strike out an article would normally be made to the Magistrates Court as a minor civil action under s 41A. If the matter was particularly complex or significant [s 41A(5)], a unit holder could seek the permission of the District Court to commence proceedings there [s 41A(3)]. Alternatively, the District Court could agree to transfer proceedings begun in the Magistrates Court to the District Court [s 41A(4)].

Breaches of the articles

If it is claimed that a unit holder or occupier (for example, a tenant) of a unit is in breach of the articles, the corporation may request that the person either do what is required under the articles, or stop doing what is not allowed under the articles. If the person continues to breach the articles, mediation may be sought, or a penalty may be imposed by the corporation if there is provision for this in the articles, and/or the matter may be taken to the Magistrates Court (see Disputes).

Penalties for breaching the articles

The articles of a strata corporation may impose a penalty of up to $500 [s 19(5)(b)] for contravention of, or failure to comply with, any articles [s 19(3a)]. If all the units in the strata scheme are non-residential, the penalty may be up to $2 000 [s 19(5)(a)].

Note that the articles set out in Schedule 3 of the Act (see above) do not include provision for imposing a penalty for a breach of the articles. If a corporation wants this power, it must amend its articles accordingly (see How to change the articles of a strata corporation below).

If the articles state that the corporation ‘may impose a penalty of up to $500’ for a breach of the articles, this does not mean that any penalty must be $500. A corporation should ensure that the amount of any penalty imposed is reasonable in relation to the nature and extent of the breach. The amount of a penalty could be disputed in the Magistrates Court if it could be argued to be oppressive, unreasonable or unjust [s 41A] (see Disputes).

Note that it is the strata corporation that may impose a penalty for an alleged breach. If a corporation has a management committee, the management committee may act for the corporation. Thus, unless some other valid delegation has been made, a duly called meeting of either the corporation or the management committee will be needed to impose a penalty for an alleged breach of the articles. A strata manager cannot impose a penalty for an alleged breach of the articles [see 'Delegation of powers and functions to a strata manager' at Strata managers].

notice of a penalty

The strata corporation must give notice of the imposition of a penalty using the form set out in Schedule 1 of the Strata Titles Regulations 2003 [s 19(3b)(c)(i)]. The form is set out below.

Schedule 1 - Penalty Notice

(Section 19(3b)(c))

To [insert name and unit number of the person to whom notice is given]

The [insert name of the strata corporation giving notice] gives you notice that you have contravened or failed to comply with [specify the by-law or article that has been contravened or not complied with] by [set out the details of the contravention or non-compliance].

The penalty of [specify the amount of the penalty] is payable to the corporation by you not later than [specify the date for payment].

If you do not pay the penalty as required by this notice, the penalty is recoverable from you by the corporation as a debt. If this notice is served on you as a unit holder, the penalty may be recovered by the corporation under section 27 of the Strata Titles Act 1988 (and interest will be payable on the penalty amount in the same way as if it were such a contribution).

Under section 19(3b)(e) of the Act you are entitled to apply to the Magistrates Court for revocation of this notice. The application must be made within 60 days after service of this notice. If you make such an application, the penalty specified in this notice is not payable unless the application is withdrawn or otherwise discontinued by you, or is dismissed or refused by the Court (and, in such a case, the penalty will be payable on the date on which the application is so withdrawn, discontinued, dismissed or refused or on the date for payment specified in the notice, whichever occurs later).

time for payment of a penalty

The date set for payment of the penalty must be at least 60 days after the date the notice is served [s 19(3b)(c)(ii)].

non-payment of a penalty

If the penalty is not paid in time, the strata corporation may recover the amount as a debt. If the notice has been given to a tenant, then, ultimately, action can be taken in the Magistrates Court (minor civil action jurisdiction) to recover the debt. If the notice has been given to a unit holder, the penalty may be recovered by the strata corporation as if it were a contribution payable to the strata corporation, and interest will be payable on the penalty amount in the same way as if it were such a contribution [s 19(3b)(d)].

challenging a penalty - revocation of the notice

A person who has received a penalty notice may, within 60 days after service of the notice, apply to the Magistrates Court for revocation of the notice [s 19(3b)(e)]. A representative of the strata corporation will be required to attend the hearing and will have to show that, on the balance of probabilities, the person committed the alleged breach [s 19(3b)(f)].

When an application to revoke a penalty is made, the requirement to pay the penalty is suspended until the matter is resolved [s 19(3b)(g)].

The Court must revoke the penalty if it is not satisfied that the person breached the articles as alleged, or if it is satisfied that the alleged breach is trifling [s 19(3b)(e)].

A breach may be regarded as ‘trifling’ if the circumstances surrounding the breach were such that the person ought to be excused from the imposition of a penalty on any of the following grounds [s 19(3c)]:

  • there were compelling humanitarian or safety reasons for the conduct that allegedly constituted the breach; or
  • the person could not, in all the circumstances, reasonably have averted the breach; or
  • the conduct allegedly constituting the breach was merely a technical, trivial or petty instance of a contravention of or failure to comply with the relevant articles.

challenging the amount of the penalty or time to pay

If a person served with a penalty notice considers the amount of the penalty or the time given to pay the penalty to be oppressive, unreasonable or unjust, they may approach the corporation in the first instance (in writing to the secretary) to request that the amount and/or time be reviewed. If unsuccessful, an application may be made to the Magistrates Court to review the corporation’s decision (see Disputes). While there is no time limit for such an application, be aware that the requirement to pay the penalty may not necessarily be suspended until the matter is resolved, and that interest may be payable on unpaid amounts. Legal advice would be useful in such matters.

How to change the articles of a strata corporation

Articles of a strata corporation can be changed by a special resolution of its members (see Types of resolutions) [s 19(2)], but any change must be lodged with the Registrar-General at the Lands Titles Office to be effective and legal [s 19(3)].

Management committee

The strata corporation can choose to run all of its business through general meetings or it can delegate some functions to a management committee [s 35 Strata Titles Act 1988 (SA)]. The management committee's job is to carry out the business of the strata corporation.

Powers and responsibilities of the management committee

The management committee has full power to transact any business of the corporation [s 35(2)], except that:

  • the strata corporation may impose limitations on what the committee can do [s 35(2)], and
  • the committee does not have the power to do anything for which a special or unanimous resolution is required [s 35(3)].

If a management committee is considering a contentious issue, such as raising special levies, it may be prudent to invite all unit owners to the committee meeting.

A management committee must keep minutes of its meetings and ensure accurate and proper accounting records are kept in respect of financial affairs [s 35(8)].

Membership of the management committee

A management committee is appointed by an ordinary resolution at a general meeting of the strata corporation [s 35(1)]. The members of the management committee must be unit holders (unless all the units are non-residential, in which case, non-unit holders may be on the committee) [s 35(1), (1a)]. The number of committee members and the term of their office (usually 1 year) are fixed by the corporation. Members may be removed by an ordinary resolution of the strata corporation at any time [s 35(5)].

Committee members can appoint another unit holder as their proxy for any meeting they cannot attend [s 35(7)].

If there is a casual vacancy in the membership of the committee, the management committee may co-opt a suitable person to fill the vacancy [s 35(6)].

A strata manager can be appointed to assist the management committee in the running of the affairs of the corporation.

Liability of committee members

Members of the management committee are personally liable for any offences of the strata corporation against the Act. Each person who was a member of the management committee at the time of the offence is also guilty of an offence, and is liable to a penalty of up to half of the maximum prescribed for the offence committed by the corporation [s 47(1)].

A management committee member has a defence if [s 47(2)]:

  • the member exercised reasonable care in the exercise of their responsibilities as a member of the management committee; and
  • if the offence is not attributable to any intentional or negligent act or omission on the member's part.

Many insurance companies offer office bearer liability cover against such risk.

Meetings of the management committee

notice of meetings

At least three days notice of a management committee meeting must be given [s 35(4b)].

decisions

Decisions of the management committee are made by majority vote [s 35(4b)].

quorum

To work out the quorum required for a management committee meeting, divide the total number of members of the committee by two, ignoring any fraction resulting from the division, and add one [s 35(4a)].

If the strata corporation has resolved that the management committee has eight members, then:

  • divide 8 by 2 (= 4)
  • add one (= 5)

So the quorum for a management committee with eight members is five.

If the strata corporation has resolved that the management committee has five members, then:

  • divide 5 by 2 (= 2 ½)
  • ignore the half (= 2)
  • add one (= 3)

So the quorum for a management committee with five members is three.

Strata managers

The business of properly running a strata corporation, such as keeping records and running meetings, can be complex, particularly when there is a large number of units in a group. Many strata corporations choose to appoint a strata manager to assist in running the affairs of the corporation. Professional strata management firms charge for these services.

A strata manager can only carry out the powers and functions delegated to them by the corporation and stated in the contract appointing them. A strata manager does not have any powers independent of the corporation. Strata managers have to act in the best interests of the corporation; if they do not, they can be sued for negligence by the strata corporation. As a preventative measure, it is advisable for a corporation to maintain an active involvement in its affairs.

The legal responsibilities of the strata corporation do not change with the appointment of a manager. It must still have a Presiding Officer, a Secretary and a Treasurer, who must all be unit holders, and is still legally liable for decisions made on its behalf.

Delegation of powers and functions to a strata manager

By an ordinary resolution [s 27A(3) Strata Titles Act 1988 (SA)] a corporation may delegate the following powers or functions to a strata manager, so that the strata manager can deal with them on the corporation’s behalf s 27A(2)]:

  • the receipt and holding of money and other personal property on behalf of the corporation;
  • payment of money on behalf of the corporation;
  • the preparation of statements of expenditure and proposed expenditure and statements of accounts;
  • the collection of money due to the corporation;
  • entering into contracts of insurance with insurers on behalf of the corporation;
  • maintaining and keeping records on behalf of the corporation;
  • issuing and signing notices on behalf of the corporation;
  • preparing minutes of meetings of the corporation;
  • providing information as required by the Act on behalf of the corporation;
  • investing money on behalf of the corporation; and
  • arranging for the maintenance and repair of the common property on behalf of the corporation.

However, a strata manager cannot do anything which requires a special or unanimous resolution of the corporation [s 27A(4)].

A corporation may place conditions on the exercise of any delegated power or function [s 27A(5)].

Even if a corporation has delegated powers or functions to a strata manager, it is still able to exercise those powers or functions itself [s 27A(5)].

Appointing a strata manager

Strata managers (also called ‘body corporate managers’) can be appointed at a general meeting by an ordinary resolution [s 27A(3) Strata Titles Act 1988 (SA)], although the power to appoint may be delegated to a management committee [s 35(2)].

If it proposed to appoint a strata manager (or extend or renew a strata manager's contract) at an annual general meeting, then the agenda for the meeting must include:

  • the text of the resolution to enter into, or renew or extend, the contract;
  • where and when a copy of the contract or proposed contract, including the attached schedule of the strata manager's professional indemnity insurance policy, and the required explanatory pamphlet, can be viewed or obtained by members of the corporation; and
  • proposed controls on expenditure by the strata manager.

Documents to be provided

From 28 October 2013, the following requirements must be met when appointing a paid strata manager, or renewing or extending a contract with a paid strata manager.

At least five clear days before the date of the meeting at which the corporation is to consider whether or not to enter into a contract with a strata manager, the strata manager must make available for inspection by unit holders [s 27B(8)]:

  • a pamphlet setting out the role of the manager and the rights of the strata corporation [reg 8B(4)]
  • a copy of the proposed contract, which must have attached to it a copy of the schedule to the policy of professional indemnity insurance maintained by the strata manager [reg 8B(1)].

the pamphlet

The pamphlet must specify the rights of the corporation to [reg 8B(4)]:

  • inspect records held by the manager;
  • revoke the delegation of a particular function of the manager;
  • appoint the manager as a proxy and revoke that appointment;
  • be informed of any payment that the manager receives from another trader for placing the corporation's business
  • terminate the contract; and
  • apply to the Magistrates Court for a resolution of any dispute.

the contract

The contract must [s 27B(3)]:

  • be in writing;
  • specify the term of the contract;
  • set out the functions or powers to be delegated;
  • specify the rights of the strata corporation if it wishes to end the contract after 12 months (see Ending a strata manager's contract);
  • set out the remuneration payable to the body corporate manager in respect of the work performed in exercising the delegated functions or powers, or set out the basis on which such remuneration is to be calculated;
  • contain a statement verifying that the body corporate manager is insured under a policy of professional indemnity insurance as required by the Act and an undertaking by the body corporate manager that the body corporate manager will maintain that insurance throughout the life of the contract [reg 8B(3)(a)];
  • contain an undertaking by the body corporate manager that the body corporate manager will allow any unit holder of the strata corporation to inspect, at any time during ordinary business hours, the records of the strata corporation in the possession or control of the body corporate manager and specifying how an inspection can be arranged [reg 8B(3)(b)]; and
  • have annexed to it, in accordance with reg 8B(1), a copy of the schedule to the policy of professional indemnity insurance maintained by the strata manager.

the professional indemnity insurance policy schedule

The professional indemnity insurance policy schedule must state [reg 8B(1)]:

  • the name of the body corporate manager;
  • the name of the insurer;
  • the nature of the policy; and
  • the amount for which indemnity is provided under the policy.
Duties of strata managers

Professional indemnity insurance

A strata manager must have professional indemnity insurance of at least $1.5 million per claim during a period of 12 months [reg 8B(2) Strata Titles Act 1988 (SA)]. A corporation’s strata manager must maintain this level of professional indemnity cover while working for the corporation [s 27B(2)(c)].

Duty to act in the best interests of the corporation

When doing work for the corporation, a strata manager must [s 27C(2)]:

  • act honestly and in good faith;
  • exercise due care and diligence; and
  • not make improper use of their position to gain, directly or indirectly, an advantage personally or for any other person.

Disclosure of interest

If a strata manager, or their employee or agent, has a direct or indirect pecuniary interest in a matter in relation to which they propose to perform delegated functions or powers, the strata manager must disclose the nature of the interest, in writing, to the corporation before performing the functions or powers [s 27D(1), (2)]. Failure to do so is an offence, with a maximum penalty of $15 000.

For example, if a strata manager (or their employee or agent) would receive a commission from a building maintenance company for contracting them to maintain the corporation’s common property (mow lawns, clean gutters etc.), the strata manager would have to inform the corporation in writing about the commission before entering into a contract with the company.

See also General meetings: Disclosure of interest by chair and Voting: Disclosure of interest by a proxy.

Access to records

If a unit holder requests, a strata manager must provide the unit holder, on a quarterly basis, with a statement setting out details of the strata manager’s dealings with the corporation's money. The strata manager must continue to provide the statements until the person ceases to be a unit holder or revokes their request. Failure to provide this information when requested is an offence, with a maximum penalty of $500 [s 27D(5)].

If a unit holder requests access to records of the strata corporation, a strata manager must make the records available for the unit holder to inspect within 10 business days of the request [s 27D(7)(a)]. If the unit holder asks for copies of any records, on payment of a fee (no more than $1.20 per page [reg 8C(3)]), the strata manager must also provide copies [s 27D(7)(b)]. Failure to provide access or copies is an offence, with a maximum penalty of $500.

Trust account audits

Strata managers or any agent who is authorised by the strata corporation to receive and hold money on behalf of the corporation are under strict legal obligations. An audit report of the strata manager's trust account in relation to a corporation must be forwarded to the secretary of the strata corporation each financial year [s 36H, reg 20(1)]. In addition, a statement setting out details of dealings by the strata manager or agent with the corporation's money must be produced to the strata corporation upon request [s 36G(3)], and all financial records must be kept for at least five years [s 36G(4)]. Any manager or agent who fails to comply with any of these requirements is guilty of an offence with a maximum penalty of $8 000.

Return of records and trust money

If a corporation revokes the delegations it has given to a strata manager (effectively, if the corporation dismisses the strata manager or if the contract between them is not renewed), then the strata manager must return all records and trust money.

return of records

Within 10 business days of the delegations being revoked, records must either be returned by mail, sent by registered post, or be made available for collection [reg 8C].

return of trust money

Within 10 business days of the delegations being revoked, trust money must either be returned by electronic funds transfer, or by cheque sent by registered post, or be made available for collection [reg 8C].

Ending a strata manager's contract

A corporation's contract with a strata manager must state the term of the contract. If a corporation wishes to end a contract before the end of the term because it believes the strata manager is not performing well, it would be advisable for the corporation to obtain legal advice. If the corporation believes the strata manager has breached their duty to act in the best interests of the corporation, or any other duties under the Strata Titles Act 1988 (SA), the corporation is entitled to seek to end the contract. If the corporation and the strata manager cannot agree about a proposed termination, or the terms of a termination, the dispute resolution process set out in the Act may be used. This process involves making an application to the Magistrates Court (minor civil action jurisdiction).

A corporation may end a strata manager's contract that is for a period of over 12 months, which is taken to include any renewal period at the option of the manager [s 27B(5)], after the contract has run for 12 months. The corporation must give at least 28 days’ written notice of the termination, although the notice period can be less if agreed in the contract. [s 27B(4)]

Unit holders

Compliance with the Articles

Unit holders have certain responsibilities as outlined in the articles of the strata corporation. In addition to complying with the articles themselves, unit holders are also required to take reasonable steps to make sure that their visitors or tenants do not breach the articles [s 20 Strata Titles Act 1988 (SA)].

Contributions

Unit holders must keep up their contributions to the corporation. If the funds are not paid, they are recoverable as a debt [s 27(5)], which means the corporation can sue the unit holder for the money, possibly with interest added at a rate reasonably decided by the strata corporation [s 27(4)(b)]. If you buy a unit and there is a contribution owing, you as the new owner are liable for that contribution [s 27(5)]. Check carefully before buying any unit as there may be debts outstanding on that unit.

Debts of the strata corporation

If the strata corporation does not or cannot pay its debts, the individual unit holders are personally liable. The corporation's debts are enforceable against each or any of the unit holders directly [s 21(1)]. If the corporation has a debt, the unit holders have, amongst themselves, the right of contribution to the debt based on their respective unit entitlements [s 21(2)].

Work benefitting particular units

Certain unit holders may have to pay for work which substantially benefits their own particular unit or group of units and not the strata corporation as a whole. However, this may be difficult to determine. Consider the example of a leaking pipe causing damage to one particular unit. If the pipe was common property, then the cost of repairs would have to be borne by the corporation. On the other hand, if the pipe was not common property, then the individual unit holder would be responsible.

Structural work

Unit holders must seek permission from the strata corporation before starting any building or structural work, or generally altering the outward appearance of a unit [s 29], for example, installing an air conditioner or external awnings. An exception is if work is required because of an order under the Housing Improvement Act 1940 (SA).

Structural changes that affect the delineation of a unit or what exists on the common property should be recorded by amending the strata plan lodged with the Lands Titles Office. Failure to do so may affect ownership of a unit and insurance policies held by unit holders and the corporation.

Right of entry

The key rights of unit holders are contained in the articles of the corporation and in provisions of the Act related to access to information (see Access to information by unit holders).

In addition, a unit holder, or a person authorised by them, has the right of entry into another unit, after giving such notice to the other unit holder as may be practicable in the circumstances, if [s 42]:

  • the proper supply of hot or cold water, gas, electricity, heating oil or air-conditioned air to their unit fails; or
  • the sewerage, garbage or drainage system as it affects their unit fails to operate properly; and
  • another unit must be entered in order to investigate the cause of the failure, or to carry out necessary repairs.

Reasonable force may be used to enter the other unit, but any damage to the other unit must be immediately made good at the expense of the unit holder exercising the right of entry.

General meetings

A strata corporation may hold a meeting of its members (a general meeting) at any time [s33(1) Strata Titles Act 1988 (SA)].

A meeting must be held at least once every calendar year (the annual general meeting), and within 15 months of the last annual general meeting [s 33(4)].

Calling of general meetings

A general meeting can be called by the secretary, or any two members of the management committee, or one fifth of the unit holders, or by order of the Magistrates Court [s 33(2)]. An application to the Magistrates Court (minor civil action jurisdiction) to call a general meeting can be made by the owner or occupier of a unit, a person who has contracted to purchase a unit, or any other person bound by the articles of the strata corporation (except for persons invited to or visiting the site) [s 41AA].

Note that, while a strata manager may be given the task of issuing the notice for a general meeting, a strata manager may not call a general meeting.

Notice of general meetings

At least 14 days written notice must be given to all unit holders before the meeting [s 33(3)]. Anyone proposing to convene a meeting of the members of a strata corporation must take reasonable steps to ensure that the proposed day, time and place are reasonably convenient to a majority of members of the corporation [s 33(3a)].

A unit holder may request that the strata corporation provide notices of meeting to another person in addition to (not instead of) the unit holder, for example, someone they have appointed as a proxy. The unit holder must still be sent notices of meetings [s 33(3aa)].

Agenda

The notice convening a general meeting must set out the agenda for the meeting [s 33(4a)]. The agenda must include [s 33(4b)]:

  • the text of any unanimous or special resolutions to be moved at the meeting; and
  • a motion confirming the minutes of the previous general meeting.

In the case of an annual general meeting, the agenda must also include [s 33(4b)(c)(v); reg 9A]:

  • presentation of the accounts for the previous accounting period;
  • contributions to be paid by members for the current accounting period;
  • presentation of expenditure statements required under section 33A;
  • presentation of copies of all insurance policies required under the Act;
  • discussion of the policies of insurance required by the Act to be held by the corporation;
  • the appointment of the presiding officer, treasurer and secretary of the corporation;
  • other appointments to be made or revoked by the corporation at the meeting;
  • the number of applications for relief made under Part 3A of the Act and the nature of the claims or disputes the subject of those applications;
  • if it is proposed to enter into a contract, or renew or extend a contract, with a paid strata manager, then

    - the text of the resolution to enter into, or renew or extend, the contract, and

    - where and when a copy of the contract or proposed contract, including the attached schedule of the strata manager's professional indemnity insurance policy, and the explanatory pamphlet, can be viewed or obtained by members of the corporation; and
  • proposed controls on expenditure by delegates of the corporation.

Expenditure statements [s 33A, reg 9C]

An expenditure statement must be presented by a strata corporation to each annual general meeting of the corporation. The statement must include:

  • for the current financial year, the estimated expenditure of a recurrent nature and the estimated expenditure of a non-recurrent nature;
  • in relation to reserve funds, the estimated expenditure in future years for which funds should be raised now and held in reserve; and
  • the amount to be raised by way of contributions from unit holders to cover the current financial year expenditure and reserve funds.

Forward budget (sinking fund budget)

While strata corporations are not required to have sinking funds (unlike community corporations, which must do so), certain strata corporations are required to present forward budgets at their annual general meetings.

exempt corporations

Strata corporations with six or less strata units, and strata corporations with improvements on the common property insured for less than $100 000, are not required to present a forward budget at their annual general meeting [reg 9C(3)].

corporations required to have forward budgets

For corporations with seven to twenty units, and with improvements on the common property insured for $100 000 or more, a forward budget must be presented at each annual general meeting, as part of the expenditure statement. The forward budget must include proposed expenditure (other than recurrent expenditure) for a three year period. New information must be presented about proposed non-recurrent expenditure every three years.

For corporations with more than twenty units, and with improvements on the common property insured for $100 000 or more, the forward budget presented at each annual general meeting must include proposed expenditure (other than recurrent expenditure) for a five year period. New information must be presented about proposed non-recurrent expenditure every five years.

Quorum

It is necessary to have not less than half of all unit holders represented at any meeting, in person or by proxy or, if applicable, via remote communication. If a quorum is not present, the meeting must be adjourned for at least 7 days, but no more than 14 days, and written notice given to unit holders of another meeting. If less than half of the unit holders are represented at the second meeting, those present are entitled to work as a 'quorum', which means they can legally make decisions, even when special and unanimous resolutions are required [s 33(5), (6), (7)].

Attendance by remote communication

The articles of a corporation may make provision for attendance and voting at meetings by unit holders by means of telephone, video-link, Internet connection or any similar means of remote communication. If the unit holder complies with the requirements in the articles, they may attend and vote at a meeting by remote communication [s 33(11); reg 9B(3)].

A unit holder may request the secretary of the corporation, in writing, to attend and vote at the meeting by means of remote communication. If the secretary of the corporation makes the necessary arrangements to receive and record the unit holder's attendance and voting at the meeting by remote communication, and the unit holder complies with any requirements of the secretary in relation to the request, then the unit holder may attend and vote at the meeting by remote communication [s 33(11); reg 9B(3)].

A corporation is under no obligation to provide facilities for remote communication to unit holders [s 33(11)].

Chairing of meetings

A strata corporation must elect a presiding officer, who must be a unit holder (see Officers of the strata corporation). The role of the presiding officer is to chair meetings of the corporation. However, if the presiding officer is not present, another person at the meeting may be appointed to chair [s 33(8)].

If it is proposed that the corporation's strata manager, or an employee of the strata manager, will chair a meeting of the corporation, a majority of those present and entitled to vote at the meeting must agree to this [s 33(9)].

In addition, if it is proposed that the manager chair the meeting, the manager must inform the meeting, before any vote is taken [reg 9B(2)]:

  • of any proxies the manager holds for the meeting, and that the proxies are available for inspection (in accordance with the rules for proxy voting);
  • that the manager may only chair the meeting if a majority of those present and entitled to vote agree;
  • that the manager may only vote on the question of who is to chair the meeting if the manager holds proxies specifically allowing them to vote on this; and
  • that he or she has no right to prevent any member from moving or voting on any question or motion.

Disclosure of interest by chair

Any person chairing a meeting who has a direct or indirect pecuniary interest in any matter to be voted on at the meeting must disclose the nature of the interest to the members present at the meeting before the vote is taken, even if they themselves cannot or are not voting on the matter. Failure to do so is an offence with a maximum penalty of $15 000 [s 34A(3)].

Voting

Normally, each unit is entitled to one vote (the possible exception to this relates to non-residential strata schemes) [s 34(1) Strata Titles Act 1988 (SA)].

If there are two or more unit holders for one unit, only one of them, or a proxy appointed by one of them, needs to attend the meeting to vote. If both or all unit holders attend a meeting, only one may vote. If they cannot agree on who will vote, the unit holder whose name appears first on the certificate of title for the unit is the one who may vote [s 34(3)(b)].

Where a unit holder is under a disability, the rights and powers of that unit holder under this Act may be exercised on their behalf by a guardian [s 45(1)]. Thus, a guardian of a person under a disability may vote on behalf of the person.

Disclosure of interest

A person who attends and is entitled to vote at a meeting of a strata corporation, and who has a direct or indirect pecuniary interest in any matter to be voted on at the meeting must disclose the nature of the interest to the members present at the meeting before the vote is taken. Failure to do so is an offence with a maximum penalty of $15 000 [s 34A(3)] See also Disclosure of interest by a proxy (below).

Proxy voting

Unit holders may appoint in writing a 'proxy' or someone to vote for them if they will not be present [s 34(2a)]. The proxy may be another unit holder, a tenant, relative or friend. The strata manager or an employee of the strata manager may also be appointed as a proxy, but if they cease to have these roles, the proxy also ceases [s 34(3c)].

Even if a proxy nomination has been made, a unit holder may attend and vote at meetings on his or her own behalf [s 34(3a)(f)].

how to appoint a proxy

The nomination of a person as a proxy of a unit holder must be [s 34(3a)(a)]:

  • sent in writing to the secretary of the strata corporation; and
  • specify whether the nominated person is nominated to attend and vote

    - at all meetings, and in relation to all matters, on behalf of the unit holder, or

    - only at specified meetings, or in relation to specified matters, on behalf of the unit holder.

Failure to comply with these requirements of section 34(3a)(a) will invalidate the nomination [s 34(3b)].

sample proxy nomination

I [your full name], the owner of [your unit number], [the strata corporation’s address] appoint [proxy’s full name] of [proxy’s address] to attend and vote at meetings of the strata corporation on my behalf.

This nomination remains effective for 12 months.

DATED:

SIGNED:

disclosure of interest by a proxy

declaration of a unit holder's interest

If the proxy is required to vote in a particular way in relation to a matter in which the unit holder has a direct or indirect pecuniary interest (other than an interest that the unit holder has in common with all the holders of the strata units), the nomination must specify the nature of the unit holder's pecuniary interest [s 34(3a)(c)]. In addition the proxy must declare the unit holder's interest before the vote is taken [s 34A(1)(b)]. Failure to declare the unit holder's interest is an offence with a maximum penalty of $15 000.

declaration of a proxy's interest to the meeting

Similarly, if the proxy themself has a direct or indirect pecuniary interest in any matter to be voted on at the meeting, they must disclose the nature of the interest to the members present at the meeting before the vote is taken [s 34A(3)]. Failure to do so is an offence with a maximum penalty of $15 000.

declaration of a proxy's interest to the person who nominated them

If a proxy has a direct or indirect pecuniary interest in any matter to be voted on at a meeting (other than an interest that a proxy who is a co-owner has in common with all the other co-owners [s 34A(2)]), they must, if it is practicable to do so, disclose the nature of the interest to the person who nominated them before the vote is taken. If this is not practicable, they must disclose the nature of the interest to the person who nominated them as soon as practicable after the vote is taken. Failure to do so is an offence with a maximum penalty of $15 000. [s 34A(1)(a)]

conditions on a proxy

A proxy nomination may specify conditions [s 34(3a)(b)] for example, how the unit holder requires the proxy to vote on certain matters.

period of proxy nomination

A proxy nomination is effective for a period of 12 months or such lesser period as may be specified in the written notice of nomination [s 34(3a)(e)]. However, the nomination may be revoked earlier at any time by the unit holder, by giving written notice to the secretary [s 34(3a)(d)]. Any contract or agreement purporting to prevent revocation is unenforceable [s 34(3a)(d)].

an attorney as a proxy

A person who has been appointed to exercise a general power of attorney or an enduring power of attorney may vote on behalf of a unit holder. Note that, if a person is appointed by general power of attorney specifically for the purpose of attending and voting at meetings, or specified meetings, of the strata corporation, the appointment is (despite any provision of the Powers of Attorney and Agency Act 1984 or the terms of the general power of attorney) only effective for a period of 12 months. The unit holder can, of course, specify a lesser period in the power of attorney, or revoke the power of attorney at any time [s 34(3d)].

If a general power of attorney appoints a body corporate manager specifically for the purpose of attending and voting at meetings, or specified meetings, of the strata corporation, a copy of the general power of attorney form must be provided to the secretary of the corporation before the meeting, or the first of the meetings, to which it relates [s 34(3e)].

proxy forms must be available for inspection

The secretary of the corporation must ensure that a copy of each written proxy nomination and each general power of attorney form appointing a body corporate manager is available for inspection at a meeting before any matter is voted on. Failure to do so may incur a maximum penalty of $500 [s 34(3f)].

Absentee votes

A unit holder may exercise an absentee vote by giving the secretary of the strata corporation written notice of the proposed vote at least six hours before the meeting [s 34(4)].

Right to vote

Normally, all voters must be paid up members of the corporation; however non-financial members of the corporation can vote for or against a motion requiring a unanimous resolution [s 34(7)].

Application to dispense with a vote

If a unit holder is under a disability or cannot be found, the strata corporation or any other person with a proper interest in the matter may apply to the Magistrates Court (minor civil action jurisdiction) to dispense with the need to have the unit holder vote [s 45(2)].

Written ballot

A written ballot may be demanded by a unit holder (or a proxy of a unit holder) attending a meeting [s 34(5)]. The person presiding at a meeting has the power to manage a written ballot as they think fit [s 34(6)].

remote communication and written ballots

It is not clear how a person attending a meeting via remote communication such as telephone or video-link [s 33(11); reg 9B(3)] may participate in a written ballot. As remote communication is only allowed if provided for in the corporation’s articles, or if approved and arranged by the secretary, if the situation of a written ballot is not covered in the articles or the arrangements, this may preclude someone attending via remote communication from participating in a written ballot. However, the person presiding at a meeting has the power to manage a written ballot as they think fit [s 34(6)].

Types of resolutions

Ordinary resolutions

An ordinary resolution is one passed at a properly convened meeting of the corporation by a simple majority of the votes of unit holders present and voting on the resolution [s 3(1) Strata Titles Act 1988 (SA)]. Decisions of a strata corporation are made by ordinary resolution unless the Act or articles specify otherwise.

Special resolutions

Special resolutions must be proposed by at least 14 days written notice to all unit holders, including the terms of the proposed resolution and the reasons for the proposed resolution [s 3(1)(a)].

A special resolution is required to:

  • change or adopt new articles [s 19(2)];
  • authorise the erection, alteration, demolition or removal of a building or structure, or authorise changes to the external appearance of a building by a unit holder [s 29(1)(b)], unless all the units in the strata scheme are non-residential premises, when the articles of the strata corporation may allow such changes to be made [s 29(1)(a)]; and
  • approve any special insurance [s 31(3)].

When there are only two units

When there are only two units, both unit holders must agree to achieve a special resolution [s 3(1)(b)].

When there are three units

When there are three units and the owner of each unit is entitled to 1 vote (as is the case for all residential strata corporations), a special resolution is achieved if the resolution is passed at a properly convened meeting of the strata corporation at which either no vote, or only 1 vote, is cast against the resolution [s 3(1)(b)].

If the corporation has three units that are all non-residential and the number of votes exercisable in respect of each unit is equivalent to the unit entitlement of the unit [see s 34(2)], then a special resolution is achieved if the resolution is passed at a properly convened meeting of the strata corporation at which the number of votes (if any) cast against the resolution is 25% or less of the total number of votes that could be cast at a meeting at which all unit holders are present and entitled to vote [s 3(1)(b)].

When there are four or more units

When there are four or more units, a special resolution is achieved if the resolution is passed at a properly convened meeting of the strata corporation and the number of votes (if any) cast against the resolution is 25% or less of the total number of votes that could be cast at a meeting at which all unit holders are present and entitled to vote [s 3(1)(b)].

If the number of units is 12,

then: the total number of votes that could be cast at a meeting at which all unit holders are present and entitled to vote is 12

and: 25% of 12 = 3

thus: for the resolution to pass, only 3 votes may be cast against it.

Assuming the meeting has been validly called and 8 of the 12 unit holders are present,

then: a majority vote is required for the motion to pass, and the motion fails if 4 vote against it.

result of vote against for abstain
Pass

0

1

2

3

3

8

7

6

5

4

0

0

0

0

1

Fail

3*

4

3

4

2

0

* Although only 3 votes were cast against the motion, 3:3 is not enough to pass the motion.

Unanimous resolutions

A unanimous resolution is the same as a special resolution but passed without any dissenting vote, that is nobody must vote against the resolution. Any unit holder who does not attend (or send a proxy to vote), or attends and chooses not to vote, is not counted as a dissenting vote.

Unanimous resolutions are required when:

  • acquiring, dealing with or disposing of real property [s 26(3)];
  • granting to a unit holder exclusive use of part of the common property for a specified period [s 26(4)];
  • distributing surplus funds from the sale of land [s 26(6)];
  • determining contributions other than on the basis of unit entitlement [s 27(3)];
  • varying the voting rights in non-residential schemes from one vote per unit to a system where the number of votes exercisable in respect of each unit is equivalent to the unit entitlement of the unit [s 34(2)];
  • permitting a residential unit holder to grant a lease or license over part of the unit to someone other than another unit holder (but no authorisation is required in relation to a lease or licence over the whole of a unit) [s 44(2)(b)];
  • amending the strata plan [s 12]; and
  • amalgamating with another adjacent strata plan [s 16].

Note that, although a special resolution is required to make alterations or additions to a unit, a unanimous resolution is required if the alterations affect the boundaries of a unit or the common property. Any changes to unit or common property boundaries must be ratified in an amendment to the strata plan.

when a unanimous resolution is not obtained

Where a unanimous resolution is necessary but is not obtained, but the resolution is supported to the extent necessary for a special resolution, then a person included in the majority in favour of the resolution may apply to the Magistrates Court or the Supreme Court to have the resolution declared sufficient to authorise the particular act proposed [s 46].

Notice of an application to convert a special resolution to a unanimous resolution must be served on every person who was entitled to vote and did not, either in person or by proxy, vote in favour of the resolution. The court may also order that any other person the court declares to have a sufficient interest in the proceedings be served with notice of the application. The court may direct that any such persons be joined as a party to the proceedings [s 46].

Disputes

Disputes often arise when people live close together. In most cases they can be resolved and often a community mediation service can assist to sort out problems.

The strata corporation can intervene where a dispute between unit holders involves a breach of the articles, for example where a unit holder continues to play loud music late at night. The strata corporation may write to the unit holder and point out that there has been a breach of the articles and that, under the Strata Titles Act 1988 (SA), the unit holder is bound by the articles (see also Penalties for breaching the articles). In other disputes not involving a breach of the articles, the strata corporation may also try to intervene (usually through its management committee or strata manager) to sort out the problem.

If no resolution can easily be worked out, then an application may be made to the Magistrates Court as a minor civil action [s 48A] to decide the matter. If the matter is particularly complex or significant [s 41A(5)], a unit holder can seek the permission of the District Court to commence proceedings there [s41A(3)]. Alternatively, the District Court could agree to transfer proceedings begun in the Magistrates Court to the District Court [s 41A(4)].

An application can be made to the court by [s 41AA]:

  • a strata corporation;
  • the owner or occupier of a unit;
  • a person who has contracted to purchase a unit; or
  • any other person bound by the articles of a strata corporation except for persons invited to or visiting the site.

The court can deal with disputes where [s 41A]:

  • it is claimed a breach of the Act or the articles of the corporation has occurred;
  • an occupier of a unit claims to have been prejudiced by the wrongful act or default of the strata corporation, or a delegate (including a strata manager), or the management committee, or some other member of the strata corporation;
  • a member of a strata corporation claims that a decision of the strata corporation, or a delegate (including a strata manager), or the management committee is unreasonable, oppressive or unjust; or
  • any aspect of the occupation or use of a strata unit is in dispute between a strata corporation and a member of the corporation, or between two or more members of a strata corporation.

The strata corporation may appoint a member of the corporation to represent it in any proceedings [s 41A(8)], or it may be represented by its strata manager.

The court may [s 41A(9)]:

  • order a party do something;
  • order that a party refrain from any action, or stop doing something;
  • request further information or records;
  • order that accounts be audited;
  • decide on the validity of an article;
  • decide on the validity of a decision of the corporation;
  • order that the articles of association be altered;
  • reverse or vary any decision of the corporation or management committee;
  • vary, avoid or terminate a contract entered into between a strata corporation and a strata manager or an associate of the strata manager (the court will only do so if it is satisfied that the contract involves a breach of fiduciary duties or other duties under the Act);
  • award money as damages or compensation;
  • make any other incidental or ancilliary orders; and
  • make an interim order in urgent matters [s 41A(11), (12)].

Any person who fails to comply with an order of the court is guilty of an offence with a maximum penalty of $2 000 [s 41A(13)].

Appointment of an administrator

If substantial problems arise, the corporation, a creditor of the corporation, a unit holder, or someone with a registered interest in a unit (for example, a mortgagee) can apply to the Magistrates Court or Supreme Court to have an administrator appointed to take over the affairs of the corporation [s 37]. Any application to court would only be in extreme circumstances, and the court would be reluctant to appoint an administrator unless incompetence or illegality were clearly shown. An administrator has wide powers and can do anything for which a special or unanimous resolution is usually required [s 37(2)]. The legal costs relating to the appointment of an administrator and remuneration of the administrator are payable from the funds of the strata corporation [s 37(4)].

Termination of a tenancy

If a tenant of a unit uses the unit for an illegal purpose or causes a nuisance or interferes with the reasonable peace, comfort or privacy of occupiers of the other units, then the affected person or persons can apply to the South Australian Civil and Administrative Tribunal (SACAT) to terminate the tenancy. Legal advice should be sought in this situation.

Services

Uniting Communities Mediation Service


Telephone: 8342 1800

Community mediation, run by Uniting Communities Mediation Service, can assist in the settlement of neighbourhood and other community disputes. Mediation is a voluntary process where trained mediators work with people in conflict to help them to resolve their differences. The role of the mediator is to listen, ask questions and find out the facts, not to blame anyone or take sides. With all the information, the mediator helps people to put together an agreement which is not legally binding, but is made in good faith. The advantages of mediation as a way to resolve disputes are:

  • It can save on court and solicitor costs for both parties;
  • Mediation sessions are conducted in private, unlike court proceedings;
  • It can contribute to the early resolution of problems, thereby reducing stress and anxiety; and
  • Both parties take responsibility for their role and are given the opportunity to resolve their own disputes.

Mediation services intervene in disputes at the request of at least one of the parties. If an approach is made to a service, the service can write to invite the other side to come to a mediation session to discuss the problem. Because attendance is voluntary from both sides, any party may withdraw from the resolution process at any time.

Cancellation of a strata plan

There are several ways in which a Strata Plan may be cancelled:

On cancellation:

  • the assets and liabilities attach to the former owners
  • the corporation and the articles are dissolved
  • the land vests in the former registered proprietors of the units in shares fixed by reference to unit entitlements of their respective unit.

It is suggested that legal advice be sought before taking the step of cancellation.

Buying a strata unit

Matters to be considered in purchasing a strata unit

There are particular issues related to buying a strata unit. Effectively, you are buying into a strata corporation and will become a member of the strata corporation. As well as being responsible for maintaining your own unit, you will share the responsibility for maintaining the common property (the external structure and foundations of the buildings and pipes, cables, wires, ducts and drains).

As a prospective purchaser, you may apply to the strata corporation for a range of information for moderate fees (see The strata corporation: Access to information by unit holders).

If you enter a contract, the vendor must provide certain information (see below), including the notice in Division 3 of the Schedule of Form 1, which sets out a range of issues to consider when buying into a strata corporation. The following issues are part of the notice:

Information and documents a vendor is required to provide

Along with the information that must be provided in relation to any proposed sale of land, certain information about a strata corporation must also be provided under Division 2 of the Schedule of Form 1, Land and Business (Sale and Conveyancing) Regulations 2010:

  • particulars of contributions payable in relation to the unit, including details of arrears of contributions related to the unit;
  • particulars of the assets and liabilities of the strata corporation;
  • particulars of expenditure that the strata corporation has incurred, or has resolved to incur, and to which the unit holder of the unit must contribute, or is likely to be required to contribute; and
  • particulars of the unit entitlement of the unit.

The following documents should also be provided:

  • a copy of the minutes of the general meetings of the strata corporation and management committee for the preceding 2 years;
  • a copy of the statement of accounts of the strata corporation last prepared;
  • a copy of current policies of insurance taken out by the strata corporation; and
  • a copy of the articles of the strata corporation (copies of the articles may also be obtained from the Lands Titles Registration Office).

Note that, if the vendor has no agent but the purchaser has an agent, the purchaser’s agent must apply for the information s 9(2) Land and Business (Sale and Conveyancing) Act 1994.

The notice in Division 3 of the Schedule of Form 1 must also be provided to the purchaser. This notice sets out a range of issues to consider when buying into a strata corporation.

Documents you may inspect

You are entitled to inspect [s 41(1), reg 11]:

  • a copy of the accounting records of the corporation (fee: $5);
  • the minute books of the corporation (fee: $5);
  • any documents received by the strata corporation from the original registered proprietor under s 38(3) (fee: $5);
  • a copy of any contract with a strata manager (no fee); and
  • the register of unit holders (no fee).

Checklists

What is a 'properly convened' general meeting?
  1. The meeting must be called by an authorized person/s (the secretary, or any two members of the management committee, or one fifth of the unit holders).

  2. Anyone proposing to convene a meeting of the members of a strata corporation must take reasonable steps to ensure that the proposed day, time and place are reasonably convenient to a majority of members of the corporation. It is possible to set the date for the next annual general meeting at the annual general meeting. While the date can be set a year in advance, it is advisable, particularly in smaller corporations, to have a clear process whereby unit holders can notify the secretary of their circumstances and request a change in the day or time. The ability to attend a meeting via remote communication may also be taken into account.

  3. Correct notice must be given: 14 days written notice, including the agenda, must be given to all unit holders.

  4. If the meeting is not an annual general meeting, the agenda must include the text of any unanimous or special resolutions to be moved at the meeting and a motion confirming the minutes of the previous general meeting.

  5. If the meeting is an annual general meeting, certain items must be placed on the agenda (see General meetings: Agenda).

  6. A quorum (half of the members) must be present in person, by validly appointed proxy, or by remote communication. To check the rules for appointing a proxy, see Voting: Proxy voting.

  7. The meeting must be chaired by the presiding officer, or, if the presiding officer is not present, by another person present and appointed by the meeting. Alternatively, the strata manager may chair the meeting if a majority agrees.
Appointing a proxy

You may appoint a proxy by preparing a written notice.

  1. The nomination of a person as a proxy of a unit holder must be sent in writing to the secretary of the strata corporation. The secretary must have the nominations available for inspection at a meeting before any matter is voted on.
  2. A nomination must specify whether the nominated person is nominated to attend and vote at all meetings, and in relation to all matters, on behalf of the unit holder, or only at specified meetings, or in relation to specified matters, on behalf of the unit holder.
  3. If the proxy may only attend specific meetings, these must be stated. If the proxy may only vote on certain matters, these must be stated.
  4. If you want your proxy to vote in a certain way on a specific matter, this condition must be stated on the nomination.
  5. If the proxy is required to vote in a certain way in relation to a matter in which you have a direct or indirect pecuniary interest, the nomination must specify the nature of your pecuniary interest.
  6. Remember that any proxy nomination only remains effective for a maximum of 12 months.

You may appoint a proxy by granting a general power of attorney.

  1. The ability to attend and vote at meetings is included in the powers your attorney has. Alternatively, you may appoint an attorney specifically for the purpose of attending and voting at meetings, or specified meetings, of the strata corporation.
  2. The secretary must have the general power of attorney forms available for inspection at a meeting before any matter is voted on.
  3. If you appoint a strata manager as your attorney, the power of attorney form must be sent to the secretary before the first of the meetings to which it relates.
  4. Remember that the appointment of your attorney as your proxy only remains effective for a maximum of 12 months.

Common questions

Annual general meeting

When should we have an annual general meeting?

The strata corporation must hold the next annual general meeting no more than 15 months after its last meeting. An annual general meeting should be held in every calendar year [s 33(4)].

Approval for structural work

An owner in our block of units wants to put awnings on the outside of the building to shade her kitchen windows from the afternoon sun. Does she need permission from the corporation to do this?

Yes. The decision to alter the external appearance of the units must be taken by the corporation. A special resolution of the corporation will be required to grant permission for this work [s 29].

Attendance by proxy at meetings

I am a member of the management committee but find it hard to get to every meeting. Can I appoint a proxy (someone to vote for me) for these meetings or at general meetings?

If a member of the management committee is unable to attend a committee meeting, they can appoint another unit holder as their proxy [s 35(7)].

However, for a general meeting, there are strict rules about the appointment of a proxy: the nomination must be sent in writing to the secretary of the strata corporation; it must specify whether the nominated person is nominated to attend and vote at all meetings, and in relation to all matters, on behalf of the unit holder, or only at specified meetings, or in relation to specified matters, on behalf of the unit holder.

In addition, a proxy attending a general meeting has strict obligations in relation to disclosure of interest (see Voting: Proxy voting: Disclosure of interest).

Auctions and sales

Can I sell my unit at anytime? Can I hold an auction in my unit when I wish to sell it?

Yes. There are no limitations on the sale of a unit by the unit holder, but you will need the corporation’s permission to place an auction or sale sign on common property.

Auditing

Do we have to make sure the corporation books and records are audited?

This depends on whether your strata corporation has appointed a strata manager or agent to receive and hold money on behalf of the corporation. A manager or agent must keep money in a trust account and has a legal obligation to have the trust account audited at regular intervals. The Strata Titles Act 1988 (SA) does not require a member of the corporation who is the treasurer or holds corporation money to have accounts audited; however the appointment of an auditor is sensible to make sure that a proper statement of accounts has been prepared. This should be balanced against the cost of auditing the accounts.

Bank Accounts

How do we open a new bank account in the name of the corporation?

The Strata Titles Act 1988 s 26(1)(c) gives the corporation the power to open and maintain a bank account. The bank will require evidence that the account holder is an incorporated body. This could include a copy of the deposited Strata Plan, a copy of the common property title or a copy of the deposit slip. These can all be requested from the Lands Titles Office.

A strata manager can be asked to open a bank account for the corporation. If there is no strata manager, the bank may also wish to see evidence that the individual/s opening the account on behalf of the corporation have the power to do so. Minutes of the general or management committee meeting giving authority to open the account would usually be accepted.

Books and records

I have recently been elected treasurer and secretary of our corporation. What sort of books and records do I have to keep?

The requirements in relation to maintaining and keeping records of the corporation may be delegated to a strata manager. If this function is not delegated, as the treasurer, you must keep all accounting records relating to receipts and expenditure of the corporation and management committee.

As the secretary, you are responsible for administrative and secretarial matters for the corporation and the management committee. Record keeping is part of this function. If the function of maintaining and keeping records has not been delegated to a strata manager, you must keep: a register of the names of the unit holders; minutes of all meetings; notices and orders served on the corporation; copies of correspondence received or sent by the corporation; notices of meetings of the corporation and its management committee; documents received by the strata corporation from the original registered proprietor.

For further detail, see The strata corporation: Records.

Calling meetings and initiating action

I have advised the secretary of the strata corporation that repairs are needed to my water pipes due to tree root damage, but she has taken no action. What can I do?

If the damage is the responsibility of the strata corporation, and the secretary is not acting when requested, the unit holder could approach any two members of the committee, or if the corporation does not have a management committee, the unit holders of one fifth or more units, and ask them to convene a general meeting. If the situation becomes an emergency, the unit holder could have the repairs done and bill the strata corporation. If all else fails, the unit holder could take the strata corporation to court, either to force them to take reasonable action, or to recover costs of repairs.

Car parking

Visitors to other units often park in my space, or on common property, obstructing my access. What can I do to stop this?

Unit occupiers have an obligation under the articles to make sure that their visitors do not park in other unit holder’s spaces, or parts of the common property not authorised for parking. The upset unit occupier can first talk to the other unit occupier about the problem. If the unit occupier is a tenant, the unit owner may also be approached, as they have an obligation to take reasonable steps to ensure that the tenant complies with the articles. If there is no resolution, the management committee or the corporation may be asked to intervene. If the problem continues, it is suggested that a community mediation service be approached. If the articles of the corporation provide for a penalty to be imposed for a breach of the articles, the corporation may impose a penalty on the unit occupier. As a last resort, an application can be made to the Magistrates Court for an order to prevent future breaches. If a court order is not complied with, fines or even gaol sentences can be imposed.

Corporation Records

I am worried about the corporation’s finances. Can I can look at the books and records of the corporation to put my mind at ease?

Yes. The corporation must keep the minutes of meetings for 30 years and accounting records and correspondence for seven years. As a unit holder you can apply to the secretary or a committee member or the strata manager, and they must arrange for you to see the information you require within five business days after the request. Most information is provided free of charge to unit holders but some copying charges may apply (see The strata corporation: Access to information by unit holders). You may also arrange to have quarterly bank statements for all accounts maintained by the corporation.

Corporation address

What is the strata corporation’s official address?

The official address of the corporation is that shown on the certificate of title issued for the common property in the name of the strata corporation. A corporation must keep a letter box with its name clearly shown on it for postal deliveries to the site. A post office box can only be used as the address of a corporation in districts where there is no postal delivery service. A document may be served on a strata corporation, its secretary or treasurer by posting or delivering to the address of the corporation.

Exclusive use of common property

One of the owners in the block was granted 'exclusive use' of a large part of the common property by the corporation some years ago. We feel that this is an unfair situation. How can we regain this common property for use by all owners?

If the exclusive use was granted for a set period then a unanimous resolution at a general meeting would be required for it to continue past the agreed date. If the exclusive use is not limited by time, it was an invalid resolution, as the Act requires any unanimous resolution allowing a unit holder exclusive use of a part of common property to be for a specified time.

One of the owners has fenced in common property next to their unit for their own use. Can they do this?

Excluding others from common property is contrary to the articles, as is using common property as a garden for a unit holder’s own purposes. The corporation can agree, by unanimous resolution, to grant exclusive use of the common property for a set period. Such a decision would need to be made at a general meeting. The corporation or management committee may treat this behaviour as a breach of the articles and go through the steps of communicationmediationpenalty (if possible under the articles) – Magistrates Court minor civil action.

Fences

The fence around my unit is old and needs to be replaced. Should the corporation pay for a new fence?

Generally, fences are common property and therefore the responsibility of the strata corporation. The corporation must maintain the common property to an acceptable standard, which may involve replacing or repairing the fence.

However, a strata plan could specify that a fence is part of a unit, or a fence erected by a unit owner may not be common property. If the fence is not common property, you as the unit owner, are responsible to maintain it. In fact, in this case, the corporation could require you to replace the fence. Legal advice should be sought in these situations.

How many members are allowed on the management committee?

For the last 5 years at each annual general meeting, our corporation, comprising 20 units, has elected a presiding officer, secretary, treasurer and 7 other management committee members. This number of people on one committee seems to me to be too many. How many people are there supposed to be?

There is no maximum number for a management committee. A general meeting of the corporation can fix the numbers for a management committee and must elect the presiding officer, secretary and treasurer. If a unit holder thinks the management committee is too large they could raise this at a general meeting.

Improvements to common property

Some of the unit owners want the corporation to install hand rails on the common stairs. What would be necessary to have the work approved?

As the common stairs are shared by all unit holders, they are considered common property. A simple majority vote at a general meeting can approve this addition to the common property. The corporation is responsible for public risk in the common property area and it may be sensible to install these rails.

Investing funds and borrowing money

Our strata corporation is holding funds put in by the unit owners. Where can we invest these surplus funds? Similarly, if the corporation wanted to borrow money, are there any restrictions?

The Act states that surplus funds should be in prescribed investments. In general terms this means a bank, building society or similar institution which does not expose the funds to great risk. If a strata manager or agent is authorised by the corporation to receive or hold money on the corporation’s behalf, that money must be held in a trust account.

Under the Strata Titles Act, the strata corporation can borrow money to carry out its functions. The articles can state who is authorised to borrow the money and from which financial institutions.

Management committee meetings

Can I attend management committee meetings even though I am not on the committee?

You can only attend those meetings with the committee’s permission, or if the articles allow your attendance, or a general meeting decides you can attend.

Management committee vacancies

Recently some members of our management committee resigned and this left the committee without a secretary. What do we do?

The management committee can appoint a person to fill a casual vacancy until a permanent appointment is made at the next general meeting. The position of secretary must not be left vacant more than six months.

If the number of resignations takes the number of members below the number required for a quorum, and there is difficulty filling vacancies, decisions can still be made, but they will need to be ratified at the next committee meeting with a quorum, or at a general meeting of the corporation.

Negligence and Insurance

A tree on common property overhangs the street and drops berries. I am worried that a member of the public might suffer injury. Are we responsible?

If a member of the public, or a unit holder, suffers injury as a result of the negligence of the strata corporation, then the strata corporation may be liable. This may include the strata corporation’s negligence in not pruning or maintaining trees in a safe manner. All strata corporations must hold public liability insurance to the value of 10 million dollars to cover these risks.

Does the corporation’s insurance cover a burst hot water service?

An insurance policy does not normally cover wear and tear. Unit owners and the corporation have a duty to maintain their equipment. However the building damage caused by a leaking hot water service may be covered.

Notice of meetings

A general meeting of our group has been called but they have given me a notice posted less than 14 days before the date of the meeting. Are the decisions of the meeting legal?

Written notice of the time, place and agenda of a general meeting must be given to all unit holders at least 14 days before the date of a meeting. Contact the secretary if you have not received a notice. You could point out that any decision made at the meeting would be invalid as the meeting was not properly called, and any decisions would need to be ratified at a properly convened meeting.

Ongoing costs

What types of costs are involved if I wish to own a strata unit?

Apart from the usual expenses associated with owning land (council rates, water and sewerage, gas, electricity etc.), as a member of the strata scheme you will be required to contribute to the costs associated with the running and maintenance of the scheme. These can be split into two categories: recurrent fees (those that occur on an annual basis), and costs for the long term maintenance of the scheme (often referred to as a sinking fund). Inquiries should be made with the strata corporation that administers the scheme to find out these additional costs.

Painting and gutters

Can the corporation oblige unit owners to clean the gutters on their unit?

Gutters and roofs are common property. There is no reason why unit owners could not agree to clean their own gutters to reduce maintenance costs, but there is no legal obligation to do so. If a unit owner does not or cannot clean their gutters, the corporation remains liable for repairs. A thorough clean before winter is good preventative maintenance.

Can owners decide to save maintenance costs by painting the outside of their own units?

The corporation could agree to this arrangement but it carries some risks in that the end result could be poor or inconsistent. The corporation is liable in the first instance for fixing the external paintwork on a poorly painted unit.

Quorum

I live in a block of 8 units. At our annual general meeting only three people turned up. Is this a quorum?

No business may be transacted at a general meeting unless a quorum of at least half the unit owners is represented (in person, or by validly appointed proxy, or by remote communication if this has been allowed). In your particular strata corporation, four persons entitled to vote would constitute a quorum. If a quorum is not present, the meeting must be adjourned for at least one week, but not more than 14 days, and written notice given to unit holders of another meeting. Then if after one half an hour of the relevant time less than half of the unit holders are represented, those present are entitled to work as a quorum.

Rates

I have bought a unit in a block of three. Do all three owners individually have to pay the water and sewerage rates and the council rates?

Each of the units in your block will be billed separately for council and sewerage rates. However, unless there are separate water meters for each unit, there is no way to determine a unit's water usage. Contributions are normally paid by unit entitlement; a unanimous resolution is needed to change this arrangement. SA Water offers the following billing options: sending one lump sum bill for water usage every three months to the strata corporation secretary; dividing the bill in percentages nominated by the corporation and billing owners separately; dividing the bill equally between the unit owners and billing them separately. Whatever the billing arrangement, the strata corporation is ultimately responsible to SA Water for the bill. Private water meters may be installed to each unit to determine how the SA Water account should be divided. There are costs associated with the installation and reading of private meters.

Renting

I am renting out my unit. Do I have to tell the strata corporation? What rights do the tenants have in relation to the strata corporation? Can they attend and vote at meetings? What happens if my tenants cause problems for other unit occupiers?

The unit holder must immediately notify the strata corporation of any change in the occupancy of the unit. Tenants do not have any voting rights in relation to the unit. However you may appoint your tenant as your proxy to attend general meetings and vote. You have an obligation to ensure your tenants abide by the articles of the strata corporation. It should be noted that it is not possible for a strata corporation to restrict your rights to rent your unit or to specify to whom the unit can be rented.

If your tenant causes the unit to be used for an illegal purpose, or interferes with the peace, privacy or comfort of other residents, the affected residents could approach the Residential Tenancies Tribunal for an order that your tenants be evicted.

Salt (rising) damp

I own a unit in a group where two of the other units have plaster falling off from rising damp. Why should I pay for damage inside their units?

The building foundations are common property and the corporation is therefore responsible for maintaining the damp course that protects the walls. The corporation has an obligation to make good damage caused by rising damp that can be shown to come from the soil through the foundations.

Voting

Our strata manager has sent the owners a postal form to vote about which painting quote to accept. Is the result binding on all owners?

No. The Act only provides for decisions to be made by a general or committee meeting.

What is common property?

I have paid for my blocked sewer pipe to be cleared, but the secretary refuses to reimburse me, claiming it was not common property. Who should pay?

The issue of what is and what is not common property can cause many disputes. Generally speaking, the boundary of a unit is the internal surface of its walls, floors and ceilings, and a unit can also include an area known as a ‘unit subsidiary’ marked on the strata plan as being for the exclusive use of a particular unit, for example, a carport or garden area.

Common property comprises any land or space that is not within a unit, and such things as pipes, drains or electrical wiring that are not for the exclusive use of a unit. The strata corporation has a responsibility to maintain the common property. However, if the corporation carries out work that wholly or substantially benefits a particular unit, or group of units, then responsibility for payment may be placed on those unit owners. In past court cases, ‘benefit’ has been interpreted as meaning something more than ongoing maintenance. If the pipe serves only your unit it could be argued that the clearing of the pipes should be at your expense. The cause of the blockage may also be relevant to who pays the bill. If it was clearly your fault, for example, your child’s toy blocked the pipe, then you may well have a responsibility to pay for clearing and possibly even repairs. On the other hand, if the blockage was caused by roots from a tree on common property then the corporation is liable.

White ants

I am the owner/occupier of a unit in a block of 12. Recently the corporation has decided to have each unit treated for white ants. I suffer from asthma and I am concerned about pesticides and their effect on my family and the environment. Can the corporation force me to undertake this work?

The corporation has an obligation to administer and maintain the common property for the benefit of all unit holders. This includes protecting the units from white ants as they come from outside the unit boundaries. Any white ant damage to a unit will need to be made good by the corporation. As the proposed work is for the benefit of the entire block of units the corporation would be allowed to treat your unit and recover the cost.

Perhaps you could approach the presiding officer with your special reasons for an exemption or suggest an alternative treatment for your unit. If a suitable resolution cannot be reached, it is suggested you approach a mediation service. Finally, if there is still no satisfaction, the Magistrates Court can make a decision on the matter. It is advisable to obtain legal advice in this situation.

Community Titles

The law concerning community titles is contained in the Community Titles Act 1996 (SA), the Community Titles Regulations 2011 (SA) and the common law. All references to legislation and regulations in this section are to these documents, unless otherwise stated.

Changes to the Community Titles Act 1996 (SA) came into effect from 28 October 2013. To see a summary of the changes, see the Attorney-General's Department http://www.agd.sa.gov.au/community-and-strata-titles-legislation

There are two types of community titles available depending on the nature of the scheme:

  • Community Schemes and
  • Community Strata Schemes.

Regardless of the type of community title, both divide land to create lots and common property in a similar manner to strata titles. Each plan must divide the land to create at least two lots and common property.

Unlike a strata title, a scheme may include a development lot, retained by the developer, for later division into further lots within the scheme.

Community Schemes

In a community scheme lot boundaries generally do not relate to a structure, but are determined by surveyed land measurements and are unlimited in height and depth, unless otherwise specified on the plan. Unlike a strata scheme the owner is therefore responsible for the maintenance and insurance of any structures on that lot, and has no obligation for maintenance of other lot owners' buildings.

Community Strata Schemes

In a community strata scheme the lot boundaries must be defined by reference to parts of the building, similar to a strata title. There must be at least one lot that exists above another, unless the scheme was previously a strata scheme under the Strata Titles Act 1988 and has converted by resolution to the Community Titles Act 1996 (SA). The structure itself is common property and it is therefore the responsibility of the corporation to maintain and insure it.

Small schemes

Forward budgets

Some requirements in the Community Titles Act 1996 (SA) do not apply to some small schemes. In addition, the by-laws of some schemes may exempt a scheme from certain requirements. Exemptions vary depending on the number of lots in the scheme or the value of the common property. See also Types of Resolutions: Special resolutions and Financial Management: Audit of accounts.

In relation to forward budgets, corporations with six or less community lots and corporations with buildings and improvements on the common property insured for less than $100 000 are not required to present a forward budget as part of their expenditure statement at their annual general meeting (see Financial Management).

Fidelity guarantee insurance

The requirement to have fidelity guarantee insurance, which began on 27 October 2014, does not apply to two lot community corporations with no administrative or sinking fund, or to community corporations with common property insurance cover of $100 000 or less (see Insurance).

Officers of the corporation

If a scheme has ten or less lots, one person may hold two or all of the positions of presiding officer, secretary and treasurer [s 76(3)(a)] (see Community Corporation: Officers of the corporation).

By-laws may exempt a corporation from certain requirements

The by-laws of a scheme consisting of two lots may exempt the corporation from the requirements to [s 35]:

  • hold annual general meetings (except the first general meeting)
  • prepare accounting records of the corporation’s receipts and expenditure and to prepare an annual statement of accounts
  • have the annual statement of accounts audited
  • establish administrative and sinking funds, and
  • maintain a register of the names of the owners of the community lots.

The by-laws of a three lot scheme may only exempt the corporation from the requirement to maintain a register of names of the owners of the community lots.

Community corporation

A community corporation is created upon deposit of the community plan [s 10, s 71] to administer the scheme's by-laws and manage the common property and any fixtures erected on it [s 75]. Owners of community lots automatically have membership of the corporation [s 10(2), s 74]. Owners of development lots are not members of the corporation unless they also own community lots [s 10(2), s 74].

Lot owners are guarantors of their community corporation's liabilities, which means the corporation's debts are enforceable against each of the lot holders directly [s 77].

A community corporation must have a presiding officer, treasurer and secretary [s 76], and may establish a management committee [s 90(1)] to carry out the functions and perform the duties of the corporation within the limits of the committee’s powers [s 92(1)]. A community corporation may also delegate some of its functions to a person outside the corporation (such as a body corporate manager) to assist in the running of the corporation [s 78A(2)].

The corporation must have a common seal [s 73].

A community corporation must keep a letter box at the community parcel, with the name of the corporation clearly shown on it, for postal delivery to the corporation. Where there is no postal delivery to the community parcel, the corporation must keep a post office box. [s 155(4)]

The by-laws are the rules of the corporation. The corporation can make rules which are binding on the corporation, unit owners, tenants and visitors [s 43] about the management and use of common property and the use of community lots [s 34(2)]. The first by-laws of a corporation are those filed when the community plan is deposited with the Lands Titles Registration Office. A corporation can vary the by-laws [s 39].

Powers of the corporation
Maintenance and repair of lots - entry to premises

Some of the powers of the corporation are to:

  • to administer, manage and control the common property for the benefit of the owners of the community lots [s 75(1)(a)]
  • to maintain the common property and the property of the corporation in good order and condition [s 75(1)(b)]
  • where practicable, to establish and maintain lawns or gardens on those parts of the common property not required or used for any other purpose [s 75(1)(c)]
  • to enforce the by-laws and the development contracts (if any) [s 75(1)(d)]
  • enforce an owner’s duty to maintain and repair their lot [s 101]
  • borrow money or obtain other forms of financial accommodation and, subject to the Act or the regulations, give such security for that purpose as it thinks fit [s 118]
  • to carry out the other functions assigned to it by the Act or conferred on it by the by-laws [s 75(1)(e)].

Contributions

The corporation raises funds by levying contributions against all lot owners, in accordance with an ordinary resolution passed at a general meeting [s 114(1)]. The management committee may not set the contribution amount [s 114(2)]. The amount that each owner contributes to funds is normally calculated according to the 'lot entitlement' set out in the community plan [s 114(3)]. A lot entitlement is the portion, or ratio, of the capital value of a lot as against the sum of the capital values of all the lots [s 20]. The corporation may, by unanimous resolution, determine that contributions are paid on some other basis [s 114(3)].

The corporation may, by an ordinary resolution at a general meeting, allow contributions to be paid in instalments [s 114(4)(a)].

If contributions are not paid, they are recoverable as a debt [s 114(8)]; the corporation can sue the lot owner and any subsequent owner (if more than one owner, any or all of them) for the money [s 114(7)].

Interest may be charged by the corporation on contributions or instalments owing, this is done by ordinary resolution [s 114(4)(b)]. The amount of interest charged may not be more than 15% per year, and interest cannot be charged on unpaid interest [reg 19].

The Act imposes a responsibility on a lot owner to maintain and repair their lot [s 134(1)], unless the corporation’s by-laws have transferred this responsibility to the corporation [s 134(2)]. If the responsibility to maintain and repair lies with lot owners, and a lot owner does not fulfil this responsibility, the corporation may give a lot owner written notice requiring them to carry out specific work by a certain time [s 101(1)(a)].

Similarly, the corporation may require and enforce work on a lot to remedy a breach of the Act or the corporation’s by-laws, even if the breach was by a former lot owner, an occupier (tenant) or former occupier [s 101(1)(b)(i)].

The corporation can also pre-empt problems and require an owner to do work to remedy a situation that is likely to result in a breach of the Act or the by-laws [s 101(1)(b)(ii)].

If the work is not done in the set time, the corporation may authorise workers to enter the lot to do the work [s 101(2)]. This can only happen after the corporation has given at least two days notice in writing to both the lot owner and the occupier (for example, any tenant) [s 101(3)].

Force cannot be used to enter the lot without an order from the Magistrates Court [s 101(4)], in which case the corporation would have to file a minor civil action and the owner would have a chance to contest the application. However, force may be used if an officer of the corporation or a person authorized by the corporation (such as a body corporate manager) is satisfied that urgent action is necessary to prevent a risk of death, injury or significant damage to property [s 101(4a)]. In such a case, the officer or authorized person can, after giving whatever notice (if any) to the lot owner and occupier they consider reasonable in the circumstances, authorize entry to a lot for the performance of work reasonably necessary to deal with the risk. To enter the lot in urgent circumstances, such force as is reasonably necessary may be used.

The individual lot owner is liable to the corporation for the reasonable cost of work done [s 101(5)]. If the need for the work arose because of someone else, for example a tenant or previous owner, the lot owner can recover the cost as a debt from that person [s 101(6)].

Maintenance and repair of service infrastructure - entry to premises

The corporation may need to enter a lot in order to set up, maintain or repair service infrastructure. If so, the corporation must give notice to the owner of the lot to be entered [s 146(1)(a)]. The amount of notice required is whatever is reasonable in the circumstances [s 146(3)]. If the situation is an emergency and there is no time to give notice, then notice need not be given [s 146(2)(a)]. A lot owner may agree that their lot can be entered without notice [s 146(2)(b)].

If a person acting on the corporation’s behalf cannot enter the lot without using force, such

force as is reasonable in the circumstances may be used [s 146(4)]. Any damage caused by the use of force must be made good as soon as practicable by the corporation, unless the need for force was the result of an unreasonable act or omission on the part of the owner of the lot that was entered [s 146(5)].

Provision of services

A community corporation may provide, for the benefit of owners and occupiers of the lots in the scheme, any kind of service that relates to the ownership or occupation of the lot [s 143(1), reg 26(1)]. A corporation may only provide a service if an owner or occupier has agreed to accept the service [reg 26(2)(a)]. The corporation may charge for the provision of those services [s 143(2)], but the cost of the service must be paid for by the persons who have agreed to accept it and must not be subsidised by the corporation [reg 26(2)(b)].

Return of property

A corporation may require anyone in possession of any record, key, or other property of the corporation to return it to an officer of the corporation by a specified time. The person in possession of the property must be given written notice to return the property, and the person it must be given to must be stated in the notice. Failure to comply with such a notice is a offence with a maximum penalty of $2 000. [s 147]

Officers of the corporation
secretary

A community corporation must have a presiding officer, a secretary and a treasurer, who are appointed by ordinary resolution [s 76(1)]. Normally, these officers must be lot owners [s 76(2)]. If the scheme has ten or less lots, one person may hold two or more of these positions, and if the scheme has more than ten lots, one person may hold up to two of these positions [s 76(3)].

A community corporation may appoint or engage a person to assist the presiding officer, treasurer or secretary [s 76(9)].

An officer can be appointed for up to a year, with all positions becoming vacant no later than the next annual general meeting of the corporation [s 76(6)].

If a vacancy arises in any of the positions, the position can either be filled at a general meeting, or, if the corporation has a management committee, the committee may, by ordinary resolution, appoint a lot owner to fill the vacancy [s 92].

A vacancy will arise before the annual general meeting if the officer:

  • resigns in writing to the secretary, or, in the case of the secretary, to the presiding officer [s 76(7)(e)]
  • dies or sells their lot [ss 76(7)(a), (c)]
  • becomes bankrupt or applies to take the benefit of a law for the relief of insolventdebtors [s 76(7)(f)]
  • is convicted of an indictable offence (an offence that may be heard before a jury) or is imprisoned for any offence [s 76(7)(g)].

An officer may be removed by special resolution of the corporation (not the committee) on the grounds of misconduct, or neglect of duty, or incapacity or failure to carry out satisfactorily the duties of the office [ss 76(7)(h), (8)].

liability of officers

Where a provision of the Act authorises or requires an officer of a community corporation to certify as to any matter or thing, the officer incurs no civil or criminal liability in respect of an act or omission in good faith in the exercise of that function. A liability that would, but for this rule, attach to an officer attaches instead to the corporation. [s 151A]

The secretary of a community corporation has the following functions [reg 26A]:

  • to prepare and distribute minutes of meetings of the corporation and submit a motion for confirmation of the minutes of any meeting of the corporation at the next such meeting
  • to give, on behalf of the members of the corporation and the management committee, the notices required to be given under the Act
  • to answer communications addressed to the corporation
  • to convene meetings of the management committee
  • to attend to matters of an administrative or secretarial nature in connection with the exercise, by the corporation or the management committee, of its functions.

General meetings and committee meetings can also be convened by members of the corporation and other officers (see Management Committee and General Meetings below).

treasurer

The treasurer of a community corporation has the following functions [reg 26A]:

  • to notify owners of community lots of any contributions to be raised from them in accordance with the Act
  • to receive, acknowledge, bank and account for any money paid to the corporation
  • to keep accounting records and prepare financial statements.
Records

The corporation has a responsibility to maintain proper records, and to keep them in an orderly manner so they can be found easily for the purposes of inspection or copying [reg 23(2) Community Titles Regulations 2011].

A community corporation must maintain a register of the names of the lot owners, showing the owner's last contact address, telephone number and email address known to the corporation, and the owner's lot entitlement [s 135(1) Community Titles Act 1996], and must keep any information in the register for 7 years [reg 22]. The by-laws of corporations with only two or three lots may exempt the corporation from the need to maintain a register of names of lot owners [s 35].

The corporation must make accounting records of its receipts and expenditure [s 136] and keep the records, along with

  • receipts for the expenditure of money
  • passbooks, deposit books and all other documents providing evidence of the deposit or investment of money
  • ADI statements and all other documents providing evidence of dealing with money invested or on deposit

for 7 years [reg 23].

The corporation must make a record of notices and orders served on the corporation and keep the notices and orders for 7 years [s 136, reg 23].

Minutes of meetings must be kept for 30 years [s 136, reg 23(3)].

Copies of correspondence received or sent by the corporation and notices of meetings of the corporation and its management committee must be kept for 7 years [s 136, reg 23(3)].

A corporation must ensure that a statement of accounts is prepared for each accounting period [s 137], and must keep each statements of account for 7 years [reg 23].

Access to information
bank statements

insurance policies

A lot owner, a mortgagee of a lot, or a prospective owner or mortgagee of a lot may request, through the corporation's secretary or a member of the management committee, to see any or all of the insurance policies currently held by the corporation [s 108 Community Titles Act 1996]. No fee is applicable.

If the applicant wishes to have copies of the current insurance policies under s 139(1)(b) a fee applies. If the applicant is the owner of a lot, a $5 fee applies [reg 25(1)(b)(i) Community Titles Regulations 2011]. If the applicant is a mortgagee of a lot, or a prospective purchaser or mortgagee of a lot, a $35 fee applies [reg 25(1)(b)(ii)].

The corporation must make the information available within five business days after the request [ss 108, 139]. Failure to do so is an offence with a maximum penalty of $500.

On the request of a lot owner made through the secretary or a member of the management committee, a corporation that does not have a body corporate manager must provide the lot owner with quarterly bank statements for all accounts maintained by the corporation, and must continue to provide the statements until the person ceases to be an owner or revokes their application [s 139(1a)]. Failure to do so is an offence with a maximum penalty of $500. If a corporation has a manager, application can be made to the manager for quarterly financial statements (see Body corporate managers).

by-laws

The corporation must make available up-to-date copies of the by-laws that owners and occupiers of lots, prospective purchasers of a lot or someone considering entering into any other transaction in relation to a lot may inspect or purchase [s 44(1)].

No fee may be charged for inspection of the by-laws [s 44(2)]. The maximum fee a corporation may charge for buying a copy of the by-laws is $44.25. Copies of by-laws can be obtained from the Lands Titles Office for $8.90. [Schedule 2, Community Titles Regulations 2011]

other information in relation to a lot or the corporation

A lot owner, a mortgagee of a lot, or a prospective owner or mortgagee of a lot (or someone on their behalf) may apply to the corporation, through the secretary or a member of the management committee, for access to the following information or documents [s 139(1)]. The information or documents must be provided within five business days after the request [s 139(1)]. Failure to do so is an offence with a maximum penalty of $500. The corporation may reduce or waive any of the specified fees [reg 25(3)].

information to be provided:
  • particulars of any contribution payable in relation to the lot, including details of any arrears of contribution related to the lot
  • particulars of the assets and liabilities of the corporation
  • particulars of any expenditure that the corporation has incurred, or has resolved to incur, and to which the lot owner must contribute, or is likely to be required to contribute.

If the applicant is a lot owner, no fee applies [reg 25(1)(a)(i)]. If the applicant is a mortgagee of a lot, or a prospective owner or mortgagee of a lot, a $25 fee applies [reg 25(1)(a)(ii)].

copies of documents to be provided:
  • the minutes of general meetings of the corporation and meetings of its management committee for such period, not exceeding two years, specified in the application
  • the statement of accounts of the corporation last prepared by the corporation.

If the applicant is a lot owner, a $5 fee applies [reg 25(1)(b)(i)]. If the applicant is a mortgagee of a lot, or a prospective owner or mortgagee of a lot, a $25 fee applies [reg 25(1)(b)(ii)].

documents to be made available for inspection:
  • a copy of the accounting records of the corporation
  • the minute books of the corporation
  • a copy of any contract with a manager
  • and the register of lot owners.

No fee applies to inspecting a copy of the contract with a manager or the register of lot owners.

If the applicant is a lot owner, no fee applies to inspect accounting records or minutes [reg 25(1)(c)(i)]. If the applicant is a mortgagee of a lot, or a prospective owner or mortgagee of a lot, a $5 fee applies per application [reg 25(1)(c)(ii)] in relation to accounting records and minutes.

Common property

What is common property?

The common property consists of those parts of the community parcel that do not comprise or form part of a lot, and includes the service infrastructure not for the exclusive use of a lot [ss 28(1)(a)—(b)]. In addition, the common property includes any building that is not for the exclusive use of a lot and was erected before the deposit of the community plan, any building erected by the developer or the community corporation as part of the common property, and any other building on the community parcel that has been committed to the care of the community corporation as part of the common property [ss 28(1)(d)—(f)].

In the case of a strata plan, the common property also includes those parts of the building that are not part of a lot [s 28(c)]. Unless a particular strata plan indicates otherwise, the boundary of a lot is the internal surface of the walls, floors and ceilings [s 19(4)].

Service infrastructure

Service infrastructure is the cables, wires and pipes that provide services to lot owners and the common property [s 3]. The service infrastructure is shown, as far as it is practical to do so, on the plan of community division through the common property, and on a lot where it services more than the one lot [s 14(5)(e)]. As service infrastructure that serves more than one lot forms part of the common property, it is the responsibility of the corporation to maintain it [s 75]. Service infrastructure that only serves one lot is the responsibility of that lot owner to maintain.

Commercial use of the common property

Unlike in strata titles, in community titles the common property can be used, subject to planning approval, for commercial ventures such as a public golf course or retail centre [s 28(2)]. Any profits are returned to the community corporation and must be paid into the administrative or sinking funds [s 28(3)]. Surplus profits may, by special resolution, be distributed to owners of the lots in proportion to lot entitlement, if more money than is needed is held in the administrative fund or the sinking fund [s 117]. As there can be losses as well as profits, any commercial venture should be based on detailed financial and legal advice.

If members of the public have access to the common property, or a part of it, then members of the public are entitled to use the common property, or the relevant part of it, in accordance with the by-laws [s 28(4)].

Management of the common property

Common property is managed by the community corporation [s 75], which is required to keep an administrative and a sinking fund [s 116]. A two lot scheme may be exempt from the requirement to keep an administrative and a sinking fund through its by-laws [s 35(1)(d)].

Insurance

Building insurance

It is the responsibility of the community corporation to insure the common property [s 103(1)].

As a general rule, buildings in a community strata scheme are common property (unless otherwise defined on the plan) and should be insured by the corporation [s 103(1)(b)].

In a community scheme, buildings within a lot are not common property and are the responsibility of the lot owners. However, the corporation's by-laws may authorise or require the community corporation to act as agent for the owners of community lots in arranging policies of insurance [s 34(3)(ca)]. If the by-laws do so, the by-laws may also impose a monetary obligation on the owner of a lot in relation to the payment of the insurance premium [s 37(2)(b)].

Owners in a community scheme also have a duty to insure any part of their property such as a wall, which provides support and shelter to a building or other structure on another lot or on the common property [s 106(1)].

Fidelity guarantee insurance

From 27 October 2014, fidelity guarantee insurance must be held by all corporations [s 104(3)], apart from 2-lot community corporations with no administrative or sinking fund and community corporations with common property insurance cover of $100 000 or less [reg 16C(b)]. A policy of fidelity guarantee insurance covers the risk of theft or fraud of the corporation’s funds by any person authorized to handle the corporation’s funds, including a manager. Although the requirement to have fidelity guarantee insurance is a new requirement from 27 October 2014, a corporation may already have fidelity guarantee cover included with its building insurance policy. The insurance cover must be for the amount of the maximum total balance of the corporation's bank accounts at any time in the preceding three years, or $50 000, whichever is higher [reg 16C(a)].

Other insurance

A community corporation must insure itself against risks that a normally prudent person would insure against and the amount of the insurance must be the amount that a normally prudent person would insure for [ss 104(1)—(2)]. In the case of insurance for bodily injury, the insurance must be for at least ten million dollars [s 104(2)].

Financial management

Sinking fund and administrative fund

A community corporation must establish a sinking fund (for non-recurrent expenditure only) and an administrative fund (for all other expenditure) [ss 116(1)—(2)].

Non-recurrent expenditure is expenditure for a particular purpose that is normally made less frequently than once a year [s 3(1)]. Recurrent expenditure is expenditure for a particular purpose that is normally made every year or more frequently [s 3(1)].

Money received by a corporation, including contributions of lot owners, must generally be credited to the sinking or administrative fund according to the purpose for which the money will be used [s 116(4)].

Expenditure statements

An expenditure statement must be presented by a corporation to each annual general meeting of the corporation. The statement must include [s 113(1)]:

  • for the current financial year, the estimated expenditure of a recurrent nature and the estimated expenditure of a non-recurrent nature
  • the estimated expenditure in future years for which funds should be raised now and held in reserve
  • the amount to be raised by way of contributions from lot owners to cover the current financial year expenditure and reserve funds.

Some corporations must also include a forward budget (a ‘sinking fund’ budget) as part of the expenditure statement.

Forward budget (sinking fund budget)

For corporations with seven to twenty lots, and with improvements on the common property insured for $100 000 or more, a forward budget must be presented at each annual general meeting, as part of the expenditure statement. The forward budget must include proposed expenditure (other than recurrent expenditure) for a three year period. New information must be presented about proposed non-recurrent expenditure every three years. [s 113(1)(aa), reg 18A].

For corporations with more than twenty units, and with improvements on the common property insured for $100 000 or more, the forward budget presented at each annual general meeting must include proposed expenditure (other than recurrent expenditure) for a five year period. New information must be presented about proposed non-recurrent expenditure every five years. [s 113(1)(aa), reg 18A]

Exempt corporations

Community corporations with six or less community lots and community corporations with buildings and improvements on the common property insured for less than $100 000 are not required to present a forward budget as part of their expenditure statement at their annual general meeting [reg 18A(3)].

Audit of accounts

A community corporation must have its annual statement of accounts audited unless it is exempted from this requirement [s 138(1)].

The auditor must be a registered company auditor within the meaning of the Corporations Act 2001 (Cth) [s 138(2)]. A member of the corporation and any person who has a personal or pecuniary interest in the results of an audit must not be appointed as auditor [s 138(3)].

Exempt corporations

An annual statement of accounts in respect of a financial year need not be audited in any of the following circumstances.

  • If the aggregate of the contributions made or to be made by members of the corporation in respect of that year does not exceed $20 000 AND the balance standing to the credit of the administrative fund at the commencement of that year does not exceed $20 000 AND the balance standing to the credit of the sinking fund at the commencement of that year does not exceed $20 000 [s 138(4)(a), reg 24].
  • If all community lots are owned by the same person [s 138(b)].
  • If the community scheme consists only of lots used for residential purposes AND there are not more than 6 community lots AND the community corporation, by unanimous resolution, resolves not to have the statement of accounts for that financial year audited [s 138(4)(c)].
  • If the by-laws of a community corporation with two lots exempt the corporation from the requirement to have its statement of accounts audited [s 35(1)(c)].

Authorizing expenditure

Depending on the amount the corporation proposes to spend, different types of resolutions are needed in order to authorize the expenditure [s 119, reg 21].

If the proposed expenditure is less than the number of community lots in the scheme x $2 000, an ordinary resolution is required.

If the proposed expenditure is more than the number of community lots in the scheme x $2 000 and less than the number of community lots x $5 000 then a special resolution is required.

If the proposed expenditure is more than the number of community lots in the scheme x $5 000, then a unanimous resolution must be passed to authorize the expenditure.

By-laws (Rules)

What cannot be in the by-laws

Unlike the Strata Titles Act 1988 (SA), the Community Titles Act 1996 (SA) does not include a standard set of by-laws. The Community Titles Act 1996 (SA) requires developers of community schemes to draft individual by-laws (ss 12, 34) which reflect the nature of the particular scheme [(s 11(4)]. The by-laws must cover the administration, management and control of the common property; regulate the use and enjoyment of common property; and regulate the use and enjoyment of community lots to give effect to the scheme description [s 34(2)].

In relation to buildings and other structures on community lots, the by-laws may also regulate issues such as position, design, dimensions, construction, appearance, maintenance and repair [ss 34(3)(a)(i)—(ii)]. Landscaping and the appearance of community lots can be covered in the by-laws [ss 34(3)(a)(iii), (b)], and requirements or restrictions on the use of community lots can be imposed to prevent interference with the use and enjoyment of other lots [s 34(3)(c)].

The by-laws cannot be inconsistent with the scheme description (if any) or development contract (if any) of the scheme or, if there are higher levels above the scheme, the by-laws or scheme description or development contract of those schemes [s 41].

The by-laws are binding on the community corporation, the owners and occupiers of the community lots and the development lot or lots (if any) comprising the scheme, and persons entering the community parcel [s 43(1)].

Those bound by the by-laws

The by-laws are binding on the community corporation, the owners and occupiers of the community lots and the development lot or lots (if any) comprising the scheme, and persons entering the community parcel [s 43(1)].

Variation of the by-laws

The by-laws may be varied by special resolution of the corporation [s 39], except in the case where the corporation wishes to change the number of votes that may be cast in respect of each community lot, when a unanimous resolution is needed [s 87(2)]. If the by-laws are varied, the variation must be lodged with the Lands Titles Office within 14 days of passing the resolution to vary the by-laws [s 39(2)]. The variation only takes effect when the lodged variation is filed with the community plan by the Registrar-General [s 40(2)].

A corporation cannot prevent or restrict a lot owner from selling or leasing their lot, or allowing someone to live in their lot, or mortgaging, or otherwise dealing with their lot [s 37(1)(a)]. An exception to this rule is that the by-laws may prevent or restrict the owner of a lot from leasing or granting rights of occupation in respect of the lot for valuable consideration (that is, when the occupier will be paying rent or a fee) for a period of less than two months [s 37(2)(a)].

monetary obligations

The by-laws may not impose a monetary obligation on the owner or occupier of a lot except where:

  • the by-law provides for the exclusive use of part of the common property [s 37(1)(b)] or
  • the by-law deals with a lot owner’s responsibility to pay an insurance premium, where the by-laws authorise or require the community corporation to act as agent for the owner in arranging the insurance policy [s 37(2)(b)].
access to a lot

The corporation may not prevent access by the owner or occupier or other person to a lot [s 37(1)(c)].

assistance dogs and therapeutic animals

The by-laws may not prevent an occupier of a lot who has a disability from having and using an assistance dog, or a therapeutic animal [s 37(1)(d)]. Similarly, a visitor to a lot who has a disability may not be prevented from using their assistance dog or therapeutic animal [s 37(1)(e)].

  • For the definition of ‘disability’, see s 5(1) Equal Opportunity Act 1985 (SA).
  • An ‘assistance dog’ is an accredited guide dog or hearing dog, or a disability dog under the Dog and Cat Management Act 1995 (SA) [s 5(1) Equal Opportunity Act 1985 (SA)].
  • A ‘therapeutic animal’ is an animal, other than an assistance dog, certified by a medical practitioner as being required to assist a person as a consequence of the person's disability [s 88A Equal Opportunity Act 1985 (SA)].
By-laws that reduce the value of a lot or unfairly discriminate against a lot owner

Any by-laws that reduce the value of a lot or unfairly discriminate against a lot owner may be struck out by order of the Magistrates Court or the District Court [s 38(1)]. The application to strike out the by-law must be made by a person who was a lot owner, which includes a person who has contracted to purchase the lot, when the by-laws came into force. The application must be made within three months after the person (or either or any of the lot owners where the lot is owned by two or more persons) first knew, or could reasonably be expected to have known, that the by-laws had been made [s 38(2)]. An application to strike out a by-law would normally be made to the Magistrates Court as a minor civil action under s 142. If the matter was particularly complex or significant [s 142(5)], a lot owner could seek the permission of the District Court to commence proceedings there [s 142(3)]. Alternatively, the District Court could agree to transfer proceedings begun in the Magistrates Court to the District Court [s 142(4)].

Breaches of the by-laws

If it is claimed that a lot owner or occupier (for example, a tenant) of a lot is in breach of the by-laws, the corporation may request that the person either do what is required under the by-laws, or stop doing what is not allowed under the by-laws. If the person continues to breach the by-laws, mediation may be sought, or a penalty may be imposed by the corporation if there is provision for this in the by-laws, and/or the matter may be taken to the Magistrates Court (see Disputes).

penalties for breaching the by-laws

The by-laws of a strata corporation may impose a penalty of up to $500 for contravention of, or failure to comply with, any by-laws [ss 34(3)(e), (9)]. If all the units in the scheme are non-residential, the penalty may be up to $2 000 [s 34(9)]. These fines may be imposed on members of the community corporation, occupiers, visitors or any other person entering the community parcel [s 43].

notice of a penalty

The corporation must give notice of the imposition of a penalty using the form set out in Form 11 of the Community Titles Regulations 2003 (SA). The form is set out below.

Form 11

Section 34(6)(c)(i) of Act

Penalty Notice

To [insert name and lot number of the person to whom notice is given]

The [insert name of the communicty corporation giving notice] gives you notice that you have contravened or failed to comply with [specify the by-law or article that has been contravened or not complied with] by [set out the details of the contravention or non-compliance].

The penalty of [specify the amount of the penalty] is payable to the corporation by you not later than [specify the date for payment].

If you do not pay the penalty as required by this notice, the penalty is recoverable from you by the corporation as a debt. If this notice is served on you as the owner of a community lot, the penalty may be recovered by the corporation under section 114 of the Community Titles Act 1996 (SA) (and interest will be payable on the penalty amount in the same way as if it were such a contribution).

Under section 34(6) of the Act you are entitled to apply to the Magistrates Court for revocation of this notice. The application must be made within 60 days after service of this notice. If you make such an application, the penalty specified in this notice is not payable unless the application is withdrawn or otherwise discontinued by you, or is dismissed or refused by the Court (and, in such a case, the penalty will be payable on the date on which the application is so withdrawn, discontinued, dismissed or refused or on the date for payment specified in the notice, whichever occurs later).

time for payment of a penalty

The date set for payment of the penalty must be at least 60 days after the date the notice is served [s 34(6)(c)(ii)].

non-payment of a penalty

If the penalty is not paid in time, the corporation may recover the amount as a debt. If the notice has been given to a tenant, then, ultimately, action can be taken in the Magistrates Court (minor civil action jurisdiction) to recover the debt. If the notice has been given to the owner of a community lot, the penalty may be recovered by the strata corporation as if it were a contribution payable to the strata corporation, and interest will be payable on the penalty amount in the same way as if it were such a contribution. [s 34(6)(d)]

challenging a penalty

A person who has received a penalty notice may, within 60 days after service of the notice, apply to the Magistrates Court for revocation of the notice [s 34(6)(e)]. A representative of the corporation will be required to attend the hearing and will have to show that, on the balance of probabilities, the person committed the alleged breach [s 34(6)(f)].

When an application to revoke a penalty is made, the requirement to pay the penalty is suspended until the matter is resolved [s 34(6)(g)].

The Court must revoke the penalty if it is not satisfied that the person breached the by-laws as alleged, or if it is satisfied that the alleged breach is trifling [s 34(6)(e)].

A breach may be regarded as ‘trifling’ if the circumstances surrounding the breach were such that the person ought to be excused from the imposition of a penalty on any of the following grounds [s 34(7)]:

  • there were compelling humanitarian or safety reasons for the conduct that allegedly constituted the breach; or
  • the person could not, in all the circumstances, reasonably have averted the breach; or
  • the conduct allegedly constituting the breach was merely a technical, trivial or petty instance of a contravention of or failure to comply with the relevant by-laws.

Management committee

Powers and responsibilities of the management committee

The corporation can choose to run all of its business through general meetings or it can, by ordinary resolution [s 90(2)], set up a management committee [s 90(1)] to carry out the functions and perform the duties of the corporation within the limits of the committee’s powers [s 92(1)]. The committee cannot delegate its functions or powers, but the corporation can appoint someone, such as a body corporate manager, to assist the committee to carry out its role [s 92(3)].

The management committee has full power to transact any business of the corporation [s 92(2)], except that:

  • the corporation may impose limitations in the by-laws on what the committee can do [s 92(2)], and
  • the committee does not have the power to do anything for which a special or unanimous resolution is required [s 92(4)].

If a management committee is considering a controversial issue, such as raising special levies, it may be sensible to give advance notice of this to all lot owners.

Membership of the management committee

A management committee is appointed by an ordinary resolution at a general meeting of the corporation [s 90(2)]. The corporation’s office bearers (presiding officer, treasurer and secretary) must be members of the committee [s 90(3)]. All members of the committee must be natural persons (not, for example, companies) [s 90(3)]. In a residential, or mainly residential, scheme, the members of the management committee must be members of the corporation (lot owners), but, if a body corporate is a lot owner, the person appointed by it to vote at meetings is taken to be a member of the corporation [s 90(4)].

A member can be appointed for up to a year, with all positions becoming vacant no later than the next annual general meeting of the corporation [s 91(1)].

A vacancy will arise before the annual general meeting if the member:

  • is an office bearer and ceases to be an office bearer [s 91(2)(d)]
  • resigns in writing to the secretary [s 91(2)(e)] (note that an office bearer may not resign from the committee while continuing to act as an office bearer)
  • dies or sells their lot [ss 91(2)(a), (c)]
  • becomes bankrupt or applies to take the benefit of a law for the relief of insolventdebtors [s 91(2)(f)]
  • is convicted of an indictable offence (an offence that may be heard before a jury) or is imprisoned for any offence [s 76(7)(g)].

A member may be removed by ordinary resolution of the corporation (not the committee) on the grounds of misconduct, or neglect of duty, or incapacity or failure to carry out satisfactorily the duties of the office [ss 91(2)(h), (3)].

If there is a casual vacancy in the membership of the committee, the management committee may appoint a suitable person to fill the vacancy [s 97].

A committee member must at all times act honestly in the performance of their duties. Failure to do so is an offence with a maximum penalty of $4 000, or, if an intention to deceive or defraud is proved, $15 000 or four years imprisonment [s 96(1)].

A committee member must not make improper use of their official position to gain a personal advantage for themselves or another. Doing so is an offence with a maximum penalty of $15 000 or four years imprisonment [s 96(2)].

immunity of committee members from liability

A committee member is not personally liable for an act or omission while acting, or purportedly acting, as a committee member unless the act or omission was dishonest or negligent [s 99(1)]. The corporation is liable for the acts or omissions of committee members, except in the case of dishonesty or negligence [s 99(2)].

Meetings of the management committee

A management committee must keep minutes of its meetings [s 94(7)].

A management committee meeting may be called by the presiding officer, treasurer or secretary, or by any two members of the committee [s 93(1)].

At least three days written notice of a management committee meeting must be given [s 93(2)]. The notice must set out the day, time and place of the meeting, and the meeting agenda [ss 93(2), (4)].

The day, time and place of the meeting must be reasonably convenient to a majority of the members of the committee [s 93(3)].

chairing

The presiding officer chairs committee meetings, but in the absence of the presiding officer, the members present may appoint another member to chair the meeting [s 94(1)].

decisions and disclosure of interest

Decisions of the management committee are made by majority vote [s 94(3)].

It is an offence with a maximum penalty of $15 000 if a committee member who has a direct or indirect pecuniary interest (apart from an interest arising solely from the fact that the member is also a member of the community corporation [s 95(4)]) in a matter under consideration by the committee does not disclose the nature of the interest to the committee or takes part in any discussions or decisions of the committee in relation to that matter [s 95(1)].

Any disclosure of interest must be recorded in the minutes of the committee [s 95(3)].

decisions without meeting

A decision may be made by a committee without meeting if [s 94(6)]:

  • written notice setting out the proposed decision is served on every committee member, and
  • within seven days after the notice is served on all members of the committee a majority of the members give written notice to the secretary setting out the proposed decision and expressing their agreement with it.
proxies

A committee member may appoint another committee member or a member of the community corporation to act as their proxy at a committee meeting that the member is unable to attend [s 94(5)].

quorum

To work out the quorum required for a management committee meeting, divide the total number of members of the committee by two, ignoring any fraction resulting from the division, and add one [s 94(2)].

Example 1

If the corporation has resolved that the management committee has five members, then:

  • divide 5 by 2 (= 2 ½)
  • ignore the half (= 2)
  • add one (= 3)

So the quorum for a management committee with five members is three.

Example 2

If the corporation has resolved that the management committee has eight members, then:

  • divide 8 by 2 (= 4)
  • add one (= 5)

So the quorum for a management committee with eight members is five.

General Meetings

Agenda

General meetings of the community corporation must be held at least once in a calendar year. However, the by-laws of a corporation with only two lots may say that an annual general meeting does not have to be held [s 35(1)(a)]. The annual general meeting of a primary community corporation must be held within three months after the commencement of each financial year [s 82(1)]. The annual general meeting of a secondary or tertiary community corporation must be held within 6 months after the commencement of each financial year [s 82(2)].

A general meeting may be called by [s 81(1)]:

  • the presiding officer, treasurer or secretary of the corporation
  • any two members of the management committee
  • a member or members of the corporation the value of whose lot entitlement or combined lot entitlements is 20 per cent or more of the aggregate value of all the lot entitlements
  • a member or members of the corporation who holds, or who together hold, 20 per cent or more of the total number of community lots in the scheme, or
  • on the order of the Magistrates Court following an application under s 141 (see Disputes).

At least fourteen days written notice of a general meeting must be given [s 81(2)]. The notice must set out the day, time and place of the meeting, and the meeting agenda [ss 81(2), (4)].

The day, time and place of the meeting must be reasonably convenient to a majority of the members of the corporation [s 81(3)].

The agenda of every general meeting must include [s 81(5)]:

  • the text of any unanimous or special resolutions to be moved at the meeting
  • a motion confirming the minutes of the previous general meeting.

In the case of the first statutory general meeting, the agenda must also include [s 80(2), reg 15]:

  • the appointment of the presiding officer, treasurer and secretary
  • the custody of the corporation's common seal and the manner of its use
  • the corporation's recurrent and non-recurrent expenditure in its first financial year and the amount to be raised by contributions from owners of community lots to cover that expenditure
  • the appointment of an auditor of the corporation's accounts in its first financial year or a special resolution that the accounts for that year need not be audited
  • whether the policies of insurance taken out by the developer are adequate
  • whether the corporation should establish a management committee
  • the delegation of functions and powers by the corporation
  • whether the by-laws of the scheme need amendment.

In the case of all subsequent annual general meetings, the agenda must also include [s 81(5)(d), reg 16]:

  • presentation of the accounts for the previous financial year
  • contributions to be paid by members for the current financial year
  • presentation of copies of the corporation’s insurance policies required by the Act (see Insurance)
  • presentation of any expenditure statements required by the Act (see Financial Management)
  • if the corporation must have its annual statement of accounts audited (see Financial Management), the appointment of an auditor of the accounts for the current financial year
  • the appointment of the presiding officer, treasurer and secretary of the corporation
  • other appointments to be made or revoked by the corporation at the meeting
  • discussion of the policies of insurance required by the Act to be held by the corporation
  • the number of applications for relief made under Part 14 of the Act (see Disputes) and the nature of the claims or disputes the subject of those applications
  • proposed controls on expenditure by delegates of the corporation
  • if it is proposed to enter into a contract, or renew or extend a contract, with a body corporate manager
    • the text of the resolution to enter into, or renew or extend, the contract, and
    • where and when a copy of the contract or proposed contract and the explanatory pamphlet (see Body corporate managers) can be viewed or obtained by members of the corporation.
Quorum

To work out the quorum required for a general meeting, divide the total number of members entitled to attend and vote (see Voting) by two, ignoring any fraction resulting from the division, and add one [s 83(4)].

Members may be present in person or by proxy or, if applicable, via remote communication (see below).

If a quorum is not present, the meeting must be adjourned for at least 7 days, but no more than 14 days, and written notice given to members of another meeting. If a quorum is not present at the second meeting, those present are entitled to work as a 'quorum', which means they can legally make decisions. [ss 83(5), (6)]

Attendance by remote communication

The by-laws of a corporation may make provision for attendance and voting at meetings by members by means of telephone, video-link, Internet connection or any similar means of remote communication. If the member complies with the requirements in the by-laws, they may attend and vote at a meeting by remote communication. [s 83(6a), reg 16A(3)(a)]

Alternatively, a member may request the secretary of the corporation, in writing, to attend and vote at the meeting by means of remote communication. If the secretary of the corporation makes the necessary arrangements to receive and record the member's attendance and voting at the meeting by remote communication, and the member complies with any requirements of the secretary in relation to the request, then the member may attend and vote at the meeting by remote communication. [s 83(6a), reg 16A(3)(b)]

A corporation is under no obligation to provide facilities for remote communication to members [s 83(6a)].

Chairing of general meetings

Generally, the corporation’s presiding officer must chair meetings of the corporation [s 83(1)]. However, if the presiding officer is not present, another person at the meeting may be appointed to chair [s 83(3)].

If it is proposed that the corporation's manager, or an employee of the manager, will chair a meeting of the corporation, a majority of those present and entitled to vote at the meeting must agree to this [s 83(3a)].

In addition, if it is proposed that the manager chair the meeting, the manager must inform the meeting, before any vote is taken [reg 16A(2)]:

  • of any proxies the manager holds for the meeting, and that the proxies are available for inspection (in accordance with the rules for proxy voting)
  • that the manager may only chair the meeting if a majority of those present and entitled to vote agree
  • that the manager may only vote on the question of who is to chair the meeting if the manager holds proxies specifically allowing them to vote on this
  • that he or she has no right to prevent any member from moving or voting on any question or motion.

Any person chairing a meeting who has a direct or indirect pecuniary interest in any matter to be voted on at the meeting must disclose the nature of the interest to the members present at the meeting before the vote is taken, even if they themselves cannot or are not voting on the matter. Failure to do so is an offence with a maximum penalty of $15 000. [s 85(2a)]

Voting at General Meetings

Disclosure of interest

The owner of a community lot is entitled to attend general meetings of the corporation, and is entitled to vote if there are no outstanding amounts payable to the corporation in respect of the lot [ss 84(1), (14)]. Lot owners generally have one vote [s 87(1)(a)]. However if the scheme is for commercial purposes this may be varied within the by-laws [s 87(1)(b)].

Where there is more than one owner of a lot and one of them has not been formally appointed to vote on behalf of all the owners (see Proxy voting where this more than one owner of a lot), then [s 84(7)]:

  • if only one of the owners attends a meeting, the vote is exercisable by that person
  • if two or more of the owners attend a meeting, the vote is exercisable by one of them in accordance with an agreement between all the owners attending the meeting but, if there is no such agreement, none of them is entitled to vote.

The Act limits the voting power of the developer of a community scheme who owns one or more community lots. The developer is the person who was the registered proprietor of the land that now comprises the community parcel immediately before the lodgement of the plan of community division [s 3(1)]. The number of votes cast by the developer, and anyone ‘associated’ with the developer according to s 4(2), may not exceed the total of votes cast by other community corporation members [s 87(3)]. This is designed to prevent developers changing scheme descriptions and development contracts.

The owner of a development lot is not entitled to attend or to vote at general meetings in their capacity as the owner of that lot [s 84(2)].

A lot owner who attends and is entitled to vote (other than as a nominee) at a meeting of a community corporation and who has a direct or indirect pecuniary interest in any matter to be voted on at the meeting must disclose the nature of the interest to the members present at the meeting before the vote is taken [s 85(2a)(a)]. Failure to do so is an offence with a maximum penalty of $15 000.

Similarly, anyone who presides at a meeting of a community corporation and who has a direct or indirect pecuniary interest in any matter to be voted on at the meeting must disclose the nature of the interest to the members present at the meeting before the vote is taken [s 85(2a)(b)]. Failure to do so is an offence with a maximum penalty of $15 000.

An owner of a community lot is not obliged to disclose an interest held in common with all of the owners of the community lots [s 85(2b)].

Absentee votes

A lot owner may exercise an absentee vote by giving the secretary of the corporation written notice of the proposed vote at least six hours before the meeting [s 84(11)].

Written ballots

A lot owner attending a meeting of the corporation may demand a written ballot on any question [s 84(12)]. A person attending a meeting via remote communication such as telephone [s 83(6a), reg 16A(3)] may participate in a written ballot if it is provided for in the corporation’s by-laws, or if approved and arranged by the secretary. If the situation of a written ballot is not covered in the by-laws or arrangements this may prevent someone attending via remote communication from participating in a written ballot. However, the person presiding at a meeting has the power to manage a written ballot as they think fit [s 84(13)].

Proxy voting

A copy of each proxy nomination and any general power of attorney appointing a proxy applying in relation to a meeting must be made available by the secretary of the corporation (or, in the case of a nomination relating to the first statutory general meeting, the person initially presiding at the meeting) for inspection by persons attending the meeting before any matter is voted on at the meeting [s 85(10a)]. Failure to do so is an offence with a maximum penalty of $500.

A member may appoint another person to vote on their behalf [s 84(3)]. Even if a proxy nomination has been made, a member may attend and vote at meetings on his or her own behalf [s 84(5)(g)].

A proxy nomination is effective for a period of 12 months or such lesser period as may be specified in the written notice of nomination [s 84(5)(f)]. However, the nomination may be revoked earlier at any time by the lot holder, by giving written notice to the secretary; any contract or agreement purporting to prevent revocation is unenforceable [s 84(5)(e)].

In addition, if the corporation's manager, or an employee of the manager, is nominated as a proxy, the nomination ceases to have effect on the person ceasing to be the corporation's manager or an employee of the manager [s 84(6a)].

A member may specify conditions on the proxy nomination [s 84(5)(c)], for example, how the proxy is to vote on certain matters.

The nomination of a person as a proxy of a member must [s 84(5)]:

  • be sent in writing to the secretary of the corporation (except for the first statutory general meeting, when written notice must be given to the person initially presiding at the meeting), and
  • specify whether the nominated person is nominated to attend and vote:
    • at all meetings, and in relation to all matters, on behalf of the lot holder, or
    • only at specified meetings, or in relation to specified matters, on behalf of the lot holder
  • if the proxy is required to vote in a particular way on a matter in which the owner has a direct or indirect pecuniary interest (other than an interest that the owner has in common with all the owners of the community lots), specify the nature of the owner's pecuniary interest.

Failure to comply with these requirements will invalidate the nomination [s 84(5a)].

Appointment of a proxy by general power of attorney

If an owner appoints a person as their attorney under the Powers of Attorney and Agency Act 1984 (SA) specifically for the purpose of attending and voting at meetings, or specified meetings, of the community corporation, the appointment is effective for a period of 12 months or such lesser period as may be specified in the power of attorney, unless the power of attorney is revoked earlier [s 85(9a)].

If such a general power of attorney appoints a body corporate manager as the owner’s proxy, a copy of the instrument of appointment must be given to the secretary of the corporation before the meeting, or the first of the meetings, to which it relates [s 85(9b)].

Proxy voting where there is more than one owner of a lot

Where there is more than one owner of a lot, a person (who may, but need not, be one of the owners) may be nominated by all of the owners to vote on their behalf [s 84(4)].

The owners may specify conditions in relation to the nomination [s 84(6)(ba)].

The nomination of a person as a proxy of multiple owners must [s 84(6)]:

  • be made by written notice to the secretary of the corporation by all of the owners of the lot
  • specify the meeting or meetings to which it relates
  • if a specified condition requires the nominated person to vote in a particular way in relation to a matter in which an owner has a direct or indirect pecuniary interest (other than an interest that the owner has in common with all the owners of the community lots), specify the nature of the owner's pecuniary interest.

The nomination may be revoked at any time by one of the owners by written notice to the secretary [s 84(6)(c)].

If the corporation's manager, or an employee of the manager, is nominated as a proxy, the nomination ceases to have effect on the person ceasing to be the corporation's manager or an employee of the manager [s 84(6a)].

Disclosure of interest by a proxy
declaration of a member's interest

If the nomination declares a lot owner’s pecuniary interest in a matter (because the proxy is required to vote in a particular way in relation to the matter and the member has a direct or indirect pecuniary interest in the matter [see above: s 84(5)(d); s 84(6)(bb)]), then the proxy must declare the member's interest before the vote is taken [s 85(1)(b)]. Failure to declare the member's interest is an offence with a maximum penalty of $15 000.

declaration of a proxy's interest to the meeting

Similarly, if the proxy has a direct or indirect pecuniary interest in any matter to be voted on at the meeting, they must disclose the nature of the interest to the members present at the meeting before the vote is taken [s 85(1)(a)(ii)]. Failure to do so is an offence with a maximum penalty of $15 000.

declaration of a proxy's interest to the person who nominated them

If a proxy has a direct or indirect pecuniary interest in any matter to be voted on at a meeting, they must, if it is practicable to do so, disclose the nature of the interest to the person who nominated them before the vote is taken. If this is not practicable, they must disclose the nature of the interest to the person who nominated them as soon as practicable after the vote is taken. Failure to do so is an offence with a maximum penalty of $15 000. [s 85(1)(a)(i)]

Types of Resolutions

Ordinary resolutions

An ordinary resolution is one passed at a properly convened meeting of the corporation by a simple majority of the votes of members present and voting on the resolution [s 3]. Decisions of a corporation are made by ordinary resolution unless the Act or by-laws specify otherwise.

Special resolutions

Special resolutions must be proposed by at least 14 days written notice to all community lot owners, including the text of the proposed resolution and the reasons for the proposed resolution [s 3(1), reg 2(2)].

A special resolution is required to:

  • vary the by-laws [ss 12(2), 39], except when the variation relates to the number of votes that may be cast in respect of each lot, when a unanimous resolution is needed
  • allow an occupier of a lot who has been given exclusive use of part of the common property under s 36(1) to erect a building or install a fixture on the part of the common property of which they have exclusive use, or alter that part of the common property in any other way [s 36(4)]
  • vary or end a development contract [s 50(2)]
  • erect a building on, or make any other improvements to (apart from establishing lawns or gardens), the common property [ss 75(3), (1)(c)]
  • remove the presiding officer, treasurer or secretary from office [s 76(7)(h)]
  • decide that the accounts for the corporation’s first financial year need not be audited [s 80(2)(d)]
  • revoke a decision that was originally required to be made by special resolution [s 89(2)]
  • in relation to a strata scheme (except one solely or predominantly for non-residential purposes), authorise the erection, alteration, demolition or removal of a building, or changes to the external appearance of a building [s 102(1)]
  • authorize acquisition of property (other than a freehold or leasehold interest in land) worth less than $5 000 [s 112(3)(b), reg 18(2)(b)]
  • dispose of excess funds in the administrative fund or the sinking fund [s 117]
  • exceed the prescribed limitation on the corporation’s expenditure [s 119, reg 21].

When there are only two community lots, or four or more community lots, a special resolution is achieved if the resolution is passed at a properly convened meeting of the corporation and the number of votes (if any) cast against the resolution is 25% or less of the total number of votes that could be cast at a meeting at which all lot owners are present and entitled to vote [s 3(1)(b)(ii)].

Thus, when there are only two lots, both owners must agree to achieve a special resolution.

When there are three community lots

When there are three community lots and the owner of each lot is entitled to one vote, a special resolution is achieved if the resolution is passed at a properly convened meeting of the corporation at which either no vote, or only one vote, is cast against the resolution [s 88].

Special Resolution Examples

Unanimous resolutions

A unanimous resolution is achieved if the resolution is passed without any dissenting (opposing) vote; that is, nobody must vote against the resolution.

The resolution must be proposed by at least 14 days written notice to all community lot owners, including the text of the proposed resolution and the reasons for the proposed resolution [s 3(1), reg 2(3)].

Any lot owner who does not attend (or send a proxy to vote), or attends and chooses not to vote, is not counted as a dissenting vote.

Unanimous resolutions are required to:

  • decide to apply to the Registrar-General to amend the schedule of lot entitlements [s 21(3)]
  • amend the scheme description [s 31]
  • decide to apply for the amendment of a deposited community plan, when the corporation is the applicant [s 52(2)]
  • decide to apply to amalgamate with another community plan [s 60(4)]
  • decide to use the common property or the property of the corporation to produce income [s 75(4)(c)]
  • vary the number of votes prescribed by the by-laws that may be cast in respect of each community lot [s 87(2)]
  • revoke a decision that was originally required to be made by unanimous resolution [s 89(1)]
  • decide to apply money received from an insurance claim for purposes other than making good the loss in respect of which the money was paid [s 105]
  • grant an easement over the common property, or consent to the extinguishment of an easement that was granted for the benefit of the common property [s 110(1)]
  • grant a right to occupy the whole or a part of the common property to the exclusion of all or some of the owners or occupiers of the community lots [s 111(1)]
  • authorize acquisition of freehold or leasehold interest in land [s 112(3)(a)]
  • authorize acquisition of property (other than a freehold or leasehold interest in land) worth $5 000 or more [s 112(3)(b), reg 18(2)(a)]
  • determine contributions other than on the basis of lot entitlement [s 114(3)]
  • exceed the prescribed limitation on the corporation’s expenditure [s 119, reg 21]
  • in the case of a residential community scheme with not more than 6 community lots, decide not to have the statement of accounts for that financial year audited [s 138(4)(c)].
When a unanimous or special resolution is not obtained

Where a unanimous resolution is necessary but only the votes necessary for a special or ordinary resolution are obtained, or where a special resolution is required but only an ordinary resolution is passed, then a person included in the majority in favour of the resolution may apply to the Magistrates Court or the District Court to have the resolution declared sufficient to authorise the particular act proposed [s 149].

Notice of an application to convert the resolution must be served on every person who voted against the resolution, and every person who was entitled to vote but did not. The court may also order that any other person the court declares to have a sufficient interest in the proceedings be served with notice of the application. The court may direct that any such persons be joined as a party to the proceedings. [s 149]

Body corporate managers

Appointing a manager

Many corporations choose to appoint a manager to assist in running the affairs of the corporation, or to assist the management committee in carrying out its role.

A manager can only carry out the powers and functions delegated to them by the corporation and stated in the contract appointing them. A manager does not have any powers independent of the corporation. Managers have to act in the best interests of the corporation; if they do not, they can potentially be sued for negligence by the corporation.

The legal responsibilities of the corporation do not change with the appointment of a manager. The corporation must still have a Presiding Officer, a Secretary and a Treasurer, who must all be members of the corporation, and it is still legally liable for decisions made on its behalf.

Managers can be appointed at a general meeting by an ordinary resolution [s 78A(3)].

The appointment should specify the powers or functions being delegated to the manager. The delegation may have conditions imposed upon it [s 78A(5)(a)]. Even if a delegation of a function or power has been made, this does not prevent the corporation from carrying out the function or power itself [s 78A(5)(b)].

A community corporation may delegate the following functions and powers to a manager [s 78A(2)]:

  • the receipt and holding of money and other personal property on behalf of the corporation
  • payment of money on behalf of the corporation
  • the preparation of statements of expenditure and proposed expenditure and statements of accounts
  • the collection of money due to the corporation
  • entering into contracts of insurance with insurers on behalf of the corporation
  • maintaining and keeping records on behalf of the corporation
  • issuing and signing notices on behalf of the corporation
  • preparing minutes of meetings of the corporation
  • providing information as required by the Act on behalf of the corporation
  • investing money on behalf of the corporation
  • arranging for the maintenance and repair of the common property on behalf of the corporation.

A manager cannot be given power to do anything that requires a special or unanimous resolution of the corporation [s 78A(4)].

If it proposed to appoint a manager (or extend or renew a manager's contract) at an annual general meeting, then the agenda for the meeting must include certain items relating to the relevant contract and controls on expenditure [s 81(5)(d), reg 16] (see General Meetings).

The following requirements must be met when appointing a paid manager, or renewing or extending a contract with a paid manager.

At least five clear days before the date of the meeting at which the corporation is to consider whether or not to enter into a contract with a manager, the manager must make available for inspection by members [s 78B(8), reg 14(1)]:

  • a pamphlet setting out the role of the manager and the rights of the corporation; and
  • a copy of the proposed contract, which must have attached to it a copy of the schedule to the policy of professional indemnity insurance maintained by the manager.
the pamphlet

The pamphlet must specify the rights of the corporation to [reg 14(4)]:

  • inspect records held by the manager
  • revoke the delegation of a particular function of the manager
  • appoint the manager as a proxy and revoke that appointment
  • be informed of any payment that the manager receives from another trader for placing the corporation's business
  • terminate the contract
  • apply to the Magistrates Court for a resolution of any dispute.
the contract

The contract must [s 78B(3), reg 14(3)]:

  • be in writing
  • specify the term of the contract
  • set out the functions or powers to be delegated
  • specify the rights of the corporation if it wishes to end the contract after 12 months
  • set out the remuneration payable to the body corporate manager in respect of the work performed in exercising the delegated functions or powers, or set out the basis on which such remuneration is to be calculated
  • contain a statement verifying that the body corporate manager is insured under a policy of professional indemnity insurance as required by the Act and an undertaking by the body corporate manager that the body corporate manager will maintain that insurance throughout the life of the contract
  • contain an undertaking by the body corporate manager that the body corporate manager will allow any member of the corporation to inspect, at any time during ordinary business hours, the records of the orporation in the possession or control of the body corporate manager and specifying how an inspection can be arranged
  • have annexed to it a copy of the schedule to the policy of professional indemnity insurance maintained by the manager.
the professional indemnity insurance policy schedule

The professional indemnity insurance policy schedule must state [reg 14(1)]:

  • the name of the body corporate manager
  • the name of the insurer
  • the nature of the policy
  • the amount for which indemnity is provided under the policy.
Duties of managers
Professional indemnity insurance

A manager must have professional indemnity insurance of at least $1.5 million per claim during a period of 12 months [reg 14(2)]. A corporation’s manager must maintain this level of professional indemnity cover while working for the corporation; if not, the manager does not have to be paid for any period of time they were not covered [s 78B(2)(c)].

Duty to act in the best interests of the corporation

When doing work for the corporation, a manager must [s 78C(2)]:

  • act honestly and in good faith;
  • exercise due care and diligence; and
  • not make improper use of their position to gain, directly or indirectly, an advantage personally or for any other person.
Disclosure of interest

If a manager, or their employee or agent, has a direct or indirect pecuniary interest in a matter in relation to which they propose to perform delegated functions or powers, the manager must disclose the nature of the interest, in writing, to the corporation before performing the functions or powers [s 78D(1)]. Failure to do so is an offence, with a maximum penalty of $15 000.

For example, if a manager (or their employee or agent) would receive a commission from a building maintenance company for contracting them to maintain the corporation’s common property, the manager would have to inform the corporation in writing about the commission before entering into a contract with the company.

Access to records
corporation records

A manager who holds records of the corporation must, at the request of any member of the corporation, make those records available for the member to inspect within 10 business days of the request, and provide the member with a copy of any of the records on payment of a fee of not more than $1.20 per page [s 78D(7), reg 14A(3)]. Failure to do so is an offence with a maximum penalty of $500.

the manager’s dealings with the corporation's money

If a corporation member requests, a manager must provide the member, on a quarterly basis, with a statement setting out details of the manager’s dealings with the corporation's money. The manager must continue to provide the statements until the person ceases to be a member or revokes their request [s 78D(5)]. Failure to provide this information when requested is an offence, with a maximum penalty of $500.

records of the corporation

If a member requests access to records of the corporation, a manager must make the records available for the member to inspect within 10 business days of the request. If the member asks for copies of any records, on payment of a fee (no more than $1.20 per page) the manager must also provide copies. Failure to provide access or copies is an offence, with a maximum penalty of $500.

professional indemnity insurance policy

The body corporate manager must, at the request of any member of the corporation, make a copy of the body corporate manager's policy of professional indemnity insurance available for inspection and copying by the member within 3 business days of the request [s 78B(9)]. Failure to do so is an offence with a maximum penalty of $500.

Trust account audits

Managers or any agent who is authorised by the corporation to receive and hold money on behalf of the corporation are under strict legal obligations. Detailed and complete records must be kept of all financial transactions in relation to the corporation [ss 126(1), (2)], and these records must be kept by the manager or agent for at least five years [s 126(4)]. An audit report of the manager's trust account in relation to a corporation must be forwarded to the secretary of the strata corporation each financial year [s 127(1)(b)]. Any manager or agent who fails to comply with any of these requirements is guilty of an offence with a maximum penalty of $8 000.

In addition, a statement setting out details of dealings by the manager or agent with the corporation's money must be produced to the corporation upon request by the corporation, and within five business days of the request [s 126(3)]. Failure to do so is an offence with a maximum penalty of $500.

Ending a manager’s contract

A corporation's contract with a manager must state the term of the contract [s 78B(3)(b)]. If a corporation wishes to end a contract before the end of the term because it believes the manager is not performing well, it would be advisable for the corporation to obtain legal advice. If the corporation believes the manager has breached their duty to act in the best interests of the corporation, or any other duties under the Community Titles Act 1996 (SA), the corporation is entitled to seek to end the contract. If the corporation and the manager cannot agree about a proposed termination, or the terms of a termination, the dispute resolution process set out in the Act may be used (see Disputes). This process involves making an application to the Magistrates Court (minor civil action jurisdiction).

A corporation may, by ordinary resolution, end a manager's contract that is for a period of over 12 months, which is taken to include any renewal period at the option of the manager, after the contract has run for 12 months. The corporation must give at least 28 days’ written notice of the termination, although the notice period can be less if agreed in the contract. [ss 78B(4), (5), (7)]

Return of records and trust money

If a corporation revokes the delegations it has given to a manager (effectively, if the corporation dismisses the manager or if the contract between them is not renewed), then the manager must return all records and trust money [s 78D(6). Failure to do so is an offence with a maximum penalty of $2 000.

return of records

Within 10 business days of the delegations being revoked, records must either be returned by mail sent by registered post, or be made available for collection [s 78D(6)(a), reg 14A(1)].

return of trust money

Within 10 business days of the delegations being revoked, trust money must either be returned by electronic funds transfer, or by cheque sent by registered post, or be made available for collection [s 78D(6)(b), reg 14A(2)].

Owners' rights and responsibilities

The key rights of lot owners are contained in the by-laws of the corporation and in provisions of the Act related to access to information (see Community Corporation: Access to information by unit owners).

Right of entry

in relation to service infrastructure

A lot owner may need to enter a lot in order to set up, maintain or repair service infrastructure. If so, the lot owner wishing to enter must give notice to the other owner [s 146(1)(a)]. Similarly, if a lot owner needs to enter the common property because they have the right to set up, maintain or repair service infrastructure, the lot owner must notify the corporation [s 146(1)(a)], unless they have the right to enter the common property [s 146(2)(c)(i)]. The amount of notice required is whatever is reasonable in the circumstances [s 146(3)].

If the situation is an emergency and there is no time to give notice, then notice need not be given [s 146(2)(a)]. A lot owner may agree that their lot can be entered without notice [s 146(2)(b)], as may the corporation in relation to the common property [s 146(2)(c)(ii)].

If the owner or a person acting on the owner’s behalf cannot enter the lot without using force, such force as is reasonable in the circumstances may be used [s 146(4)]. Any damage caused by the use of force must be made good as soon as practicable by the owner, unless the need for force was the result of an unreasonable act or omission on the part of the owner of the lot that was entered [s 146(5)].

in an emergency

In an emergency, the owner or occupier of a lot may enter another lot or the common property to assist a person on the lot or common property, or to prevent or reduce damage to the lot or another lot or to the common property [s 146(6)].

An owner or occupier who uses force when entering a lot or the common property, or a building on a lot or the common property, to assist in an emergency is not liable for any damage caused if they acted reasonably in the circumstances [s 146(7)].

to a lot via common property

A person who is entitled to enter a lot is entitled, where reasonably necessary, to enter the common property in order to gain access to the lot.

Maintenance and repairs

Owners of a 'lot' are responsible for the maintenance and repairs of their own property [s 134(1)], unless the corporation’s by-laws have transferred this responsibility to the corporation [s 134(2)]. If they do not fulfil their responsibilities of maintenance and repair, the community corporation may require the work be done within a set time [s 101(1)(a)] (see Powers of the corporation).

Insurance

Where support or shelter required by an easement pursuant to this Act is provided by a building situated on a lot, the owner of the lot must insure the building against risks that a normally prudent person would insure against for the full cost of replacing the building with new materials and must insure against incidental costs such as demolition, site clearance and architect's fees [s 106(1)]. Failure to do so is an offence with a maximum penalty of $15 000.

A lot owner who is required to insure a building under s 106(1) must provide a photocopy of the current certificate of the insurance that they have taken out to the community corporation as soon as practicable after taking out the policy and after any subsequent change to the terms and conditions of the policy [s 106(2)(a), reg 17]. Failure to do so is an offence with a maximum penalty of $500.

A lot owner must also provide a photocopy of the current certificate of the insurance policy to another owner or prospective owner, or the registered mortgagee or prospective mortgagee, of a community lot or a development lot that benefits from the easement. The copy must be provided within five business days after the making of the request [s 106(2)(b), reg 17]. Failure to do so is an offence with a maximum penalty of $500.

Compliance with the articles

Lot owners have certain responsibilities as outlined in the corporation’s by-laws, with which they are required to comply [s 43(1)]. The corporation may require and enforce work on a lot to remedy a breach of the corporation’s by-laws, even if the breach was by a former lot owner, an occupier (tenant) or former occupier [s 101(1)(b)(i)] (see Powers of the corporation).

Non-interference

An owner or occupier of a lot must not interfere, or permit interference, with support or shelter provided for another lot or for the common property [s 132(1)], or with the service infrastructure or a service provided by means of the service infrastructure in a way that may prejudice the use or enjoyment of another lot or the common property [s 132(2)].

An owner or occupier of a lot must not use, or permit the use of, the lot or the common property in a way that causes a nuisance or interferes unreasonably with the use or enjoyment of another lot or the common property [s 133].

Contributions

Lot owners must keep up their contributions to the corporation. If the funds are not paid, they are recoverable as a debt [s 114(8)], which means the corporation can sue the lot owner for the money, possibly with interest added at a rate reasonably decided by the strata corporation [s 114(4)(b)]. If you buy a lot and there is a contribution owing, you as the new owner are legally responsible for that contribution [s 114(7)]. Check carefully before buying any lot, as there may be debts outstanding in relation to it.

Debts of the corporation

Lot owners are guarantors of their community corporation's liabilities, which means the corporation's debts are enforceable against each of the lot holders directly [s 77].

If the corporation does not or cannot pay its debts, the individual lot owners are personally responsible. The corporation's debts are enforceable against each or any of the lot owners directly [s 77(1)]. If the corporation has a debt, the lot owners have, amongst themselves, the right of contribution to the debt based on their respective lot entitlements [s 77(2)].

Structural work

Community schemes

Lot owners in a community scheme may carry out structural work on their lots, subject to Council approval where necessary and compliance with the scheme description and by-laws. The scheme description must specify the standard of buildings and other improvements that may be erected on a lot [s 30(1)(d)]. The by-laws may also regulate [s 34(3)(a)]:

  • the position, design, dimensions, methods and materials of construction and external appearance of buildings or other improvements on community lots
  • the maintenance and repair of buildings or other improvements on community lots
  • landscaping, including the establishment, care and maintenance of lawns, gardens and other areas on community lots.

In addition, the by-laws may impose requirements or restrictions relating to the appearance of community lots or buildings or other improvements situated on community lots [s 34(3)(b)].

Community strata schemes (residential)

Lot owners in a residential community strata scheme must seek permission from the corporation before carrying out the erection, alteration, demolition or removal of a building, or altering the external appearance of a building [ss 102(1), (7)]. An exception is if work is required because of an order under the Housing Improvement Act 1940 (SA) [s 102(1a)]. The corporation will need to pass a special resolution to authorize the work [s 102(1)(b)].

If a lot owner carries out work without permission, the corporation may, by notice in writing to the owner of the lot, require them to carry out, within a reasonable period fixed in the notice, specified work to remedy any structural deficiency caused by the work or to restore the lot to its previous state [s 102(2)].

If the lot owner does not comply with the corporation’s notice within the time allowed in the notice, the corporation may authorize workers to enter the lot to carry out the specified work [s 102(3)], as long as reasonable notice of the proposed entry is given to the lot owner [s 102(4)].

If force is necessary to enter a lot to carry out work in the corporation’s notice, an order authorizing the entry must be obtained from the Magistrates Court [s 102(5)].

Any cost reasonably incurred by the corporation in having the work carried out may be recovered as a debt from the owner of the lot [s 102(6)].

Disputes

Disputes

Mediation

Community mediation, operated by Uniting Communities Mediation Service can assist to resolve disputes between the corporation and a lot owner or occupier, or between owners or occupiers. In addition, a mediation service can assist if one of the parties to a dispute is not associated with the community corporation, such as the owner of a neighbouring property. Telephone: 8342 1800 or visit the Uniting Communities Mediation Service website here.

Mediation is particularly worth considering for disputes in relation to community titles as it is more likely than legal action to enhance and preserve positive relationships.

Mediation is a voluntary process where trained mediators work with people to help them resolve their differences. Uniting Communities Mediation Service can become involved in a dispute at the request of at least one of the parties. If an approach is made to Uniting Communities Mediation Service, the Service can write to invite the other party to discuss the problem participate in mediation. Because attendance is voluntary from both sides, any party may withdraw from the resolution process at any time.

The role of the mediator is to listen, ask questions and ascertain the facts, not to blame anyone or take sides. With all the information provided by the parties, the mediator helps people to put together an agreement. The agreement is not legally binding, but is made in good faith.

The advantages of mediation as a way to resole disputes are:

  • it can save on court and solicitor cost for both parties
  • it can contribute to the early resolution of problems, thereby reducing stress and anxiety
  • it allows both parties to take responsibility for their role and gives them the opportunity to resolve their own disputes
  • mediation sessions are conducted in private, unlike court proceedings.

If no resolution can be worked out then an application may be made to the court to decide the matter.

Who can make an application to the court?

Not all disputes can be taken to court. Those who can make an application are [s 141]:

  • the corporation
  • the owner or occupier of a community lot
  • the owner or occupier of a development lot
  • a person who has contracted to purchase a community lot or a development lot
  • any other person bound by the by-laws of a community scheme, except for persons invited to or visiting the community land.

What disputes can be taken to court?

Only the types of disputes outlined in the Act may be heard by the court – these are situations where [s 142(1)]:

  • a breach of the Act or the corporation by-laws is alleged
  • an occupier claims to have been prejudiced by a wrongful act or omission of the corporation, management committee, the developer, or the owner or occupier of another lot
  • a member of a community corporation claims that a decision of the corporation or the management committee is unreasonable, oppressive or unjust
  • the community corporation and a corporation member, or two or more corporation members are in dispute about the occupation or use of a lot, or the position in which a cable, wire, pipe, sewer, drain, duct, plant or equipment should be laid or installed, or
  • an order authorising a person to use force to enter a lot or a building on a lot is sought.

Which court hears disputes?

An application to resolve a dispute must usually be made to the Magistrates Court [s 142(2)]. An application is heard as a minor civil action [s 149A], unless it involves enforcement of a development contract under s 49(2); these matters are heard in the general claims jurisdiction of the Magistrates Court.

If the matter is particularly complex or significant [s 142(5)], an applicant can seek the permission of the District Court to commence proceedings there [s 142(3)], or a party may seek to transfer a matter from the Magistrates Court to the District Court [s 142(4)].

A court may, on its own initiative or on an application by a party to the proceedings, transfer a matter to the Supreme Court on the ground that the application raises a matter of general importance [s 142(6)(a)]. Similarly, a court may, on its own initiative or on an application by a party to the proceedings, state a question of law for the opinion of the Supreme Court [s 142(6)(b)].

Orders that can be made

The court has power to make a range of orders under s 142.

A person who fails to comply with an order under s 142 is, in addition to being liable to punishment for contempt [s 142(14)], guilty of an offence with a maximum penalty of $15 000 [s 142(13)].

If appropriate, the court may attempt to achieve settlement of the proceedings by agreement between the parties [s 142(8)(a)].

The court may order that reports or other information be provided for the purposes of the proceedings. In addition, it can order that accounts be audited or that a person be reimbursed for the costs of having any accounts audited. [ss 142(8)(b)—(ba)]

The court may [ss 142(8)(c)—(d)]:

  • specify action that a party must take to remedy any default, or to resolve any dispute, or
  • specify action that a party must refrain from doing.

The court may [ss 142(8)(f)—(g)]:

  • give judgment on any monetary claim
  • determine the position in which a cable, wire, pipe, sewer, drain, duct, plant or equipment is to be laid or installed.

The court may:

  • make a declaration as to the validity of any decision or purported decision of the corporation [s 142(da)]
  • vary or reverse any decision of the corporation, or of the management committee of the corporation or of a delegate of the corporation [142(8)(e)(ii)].

In relation to by-laws, the court may:

  • make a declaration as to the validity of any by-law or purported by-law of the corporation [s 142(da)]
  • alter the by-laws of the community scheme, and make any necessary consequential changes to the scheme description and development contracts [142(8)(e)(i)], but only [s 142(9)]:
    • if the corporation is a party to the proceedings or the court is satisfied that the corporation has been given a reasonable opportunity to become a party to the proceedings, and
    • if it appears to the court that the alteration could adversely affect a member of the corporation who is not a party to the proceedings, the court is satisfied that the member has been notified of the possibility that such an order could be made and has been given a reasonable opportunity to make submissions to the court in relation to the matter, and
    • the court is satisfied that the order is essential to achieving a fair and equitable resolution of the matters in dispute.

In relation to contracts, the court may [s 142(8)(ea)]:

  • vary, avoid or terminate a contract entered into (regardless of when it was entered into) between a community corporation and any of the developer, an associate of the developer, the body corporate manager, or an associate of the body corporate manager, but only:
    • if the court is satisfied that the contract involves a breach of fiduciary duties or other duties under this Act [s 142(9a)].

The court may also [ss 142(8)(h)—(i), s 142(10)]:

  • make orders as to costs
  • make any incidental or ancillary orders
  • in an urgent case, make an interim order to safeguard the position of any person pending its final decision.

Appointment of an Administrator

The District Court or the Magistrates Court may appoint an administrator to administer the affairs of the corporation [s 100(1)] in cases where governance has broken down to an extent that the group is not functioning. An administrator has, while the appointment remains in force, full and exclusive power to administer the affairs of the community corporation, including power to do anything for which a special or unanimous resolution of the corporation is required [s 100(2)].

An application to appoint an administrator may be made by [s 100(1)]:

  • a community corporation
  • a creditor of a community corporation
  • the owner of a community lot or a development lot, or
  • a person who holds a registered encumbrance over a community lot or a development lot.

Buying into a community title

There are particular issues related to buying a community lot. Effectively, you are buying into a corporation and will become a member of the corporation. It is therefore essential that you have as much information as possible about the corporation before you decide to purchase. You may obtain information before you enter into a contract. Alternatively, if you have entered into a contract, you must be provided with certain information at least 10 clear days before the date of settlement under s 7(1) Land and Business (Sale and Conveyancing) Act 1994 (see below).

Obtaining information as a prospective purchaser

As a prospective purchaser, you may apply to the community corporation for a range of information for moderate fees (see Community Corporation: Access to information). Some of the information must be made available as copies, and some must be made available for inspection. Any information requested should be provided within five business days of making the application. The information should enable you to establish the current financial position of the corporation.

Service infrastructure issues for new developments

Both SA Power Networks and SA Water have requirements for the location of connection points for power, water and sewerage. The location of connection points and meter enclosures that service more than one lot may be shown on the community plan, which is available for a fee from the Land Titles Office. However, these details are often not shown. If service infrastructure is not shown on the community plan, agreement must be reached among the lot owners as to the location of the services [s 24(4)(b)], subject to the requirements of the relevant agencies. Even if there is an existing house on one of the lots with connections in place, it may be necessary for new connection points to be established which cater for all lots. To determine requirements for the number and location of connections and meters, visit relevant agency websites (sapowernetworks.com.au; sawater.com.au) or contact the relevant agency.

Core documents

Prospective purchasers of a lot in a community scheme should be aware of three documents that must or may be associated with the community title: the by-laws, scheme description, and development contract. It is also important to note the level of the scheme being bought into. The by-laws, scheme description and development contract of any scheme above also apply to that scheme.

These three documents may be obtained either from the community corporation or the Lands Titles Office, upon payment of the fee under the Regulations.

The by-laws

This is a compulsory document for all schemes. It sets out the obligations of the corporation in administering the scheme and the rules by which the scheme is to be run. Prospective purchasers must be able to inspect or buy a copy of the by-laws.

The scheme description

The scheme description gives the prospective purchaser an overall view of how the scheme is to be developed and the end result. This is an optional document for schemes that contain six lots or less that are used predominantly for residential purposes and do not contain a development lot. This document must be lodged for commercial schemes, irrespective of the number of lots, or if the plan contains a development lot, or if the common property or a lot within the scheme is to be developed in a specific way. Prospective purchasers must be able to inspect or buy a copy of the scheme description.

The development contract

This is a contract entered into by the developer; the developer must complete the scheme in accordance with the scheme description. Prospective purchasers must be able to inspect or buy a copy of the development contract.

Information to be provided when entering into a contract

If you enter a contract to buy a community lot, along with the information that must be provided in relation to any proposed sale of land, the vendor must provide certain information under Land and Business (Sale and Conveyancing) Act 1994 (SA) s 7(1) and Land and Business (Sale and Conveyancing) Regulations 2010 (SA) reg 8. Both general information about community titles and information specific to the community title you are proposing to buy must be provided.

General information

The general information is found in the notice in Land and Business (Sale and Conveyancing) Regulations 2010 (SA) sch 1 div 3, which sets out a range of issues to consider when buying into a strata corporation, as follows.

Matters to be considered in purchasing a community lot or strata unit

The property you are buying is on strata or community title. There are special obligations and restrictions that go with this kind of title. Make sure you understand these. If unsure, seek legal advice before signing a contract. For example:

Governance

You will automatically become a member of the body corporate, which includes all owners and has the job of maintaining the common property and enforcing the rules. Decisions, such as the amount you must pay in levies, will be made by vote of the body corporate. You will need to take part in meetings if you wish to have a say. If outvoted, you will have to live with decisions that you might not agree with.

If you are buying into a mixed use development (one that includes commercial as well as residential lots), owners of some types of lots may be in a position to outvote owners of other types of lots. Make sure you fully understand your voting rights, see later.

Use of your property

You, and anyone who visits or occupies your property, will be bound by rules in the form of articles or by-laws. These can restrict the use of the property, for example, they can deal with keeping pets, car parking, noise, rubbish disposal, short-term letting, upkeep of buildings and so on. Make sure that you have read the articles or by-laws before you decide whether this property will suit you.

Depending on the rules, you might not be permitted to make changes to the exterior of your unit, such as installing a television aerial or an air-conditioner, building a pergola, attaching external blinds etc without the permission of the body corporate. A meeting may be needed before permission can be granted. Permission may be refused.

Note that the articles or by-laws could change between now and when you become the owner: the body corporate might vote to change them. Also, if you are buying before the community plan is registered, then any by-laws you have been shown are just a draft.

Are you buying a debt?

If there are unpaid contributions owing on this property, you can be made to pay them. You are entitled to know the financial state of the body corporate and you should make sure you see its records before deciding whether to buy. As a prospective owner, you can write to the body corporate requiring to see the records, including minutes of meetings, details of assets and liabilities, contributions payable, outstanding or planned expenses and insurance policies.

There is a fee. To make a request, write to the secretary or management committee of the body corporate.

Expenses

The body corporate can require you to maintain your property, even if you do not agree, or can carry out maintenance and bill you for it.

The body corporate can require you to contribute to the cost of upkeep of the common property, even if you do not agree. Consider what future maintenance or repairs might be needed on the property in the long term.

Guarantee

As an owner, you are a guarantor of the liabilities of the body corporate. If it does not pay its debts, you can be called on to do so. Make sure you know what the liabilities are before you decide to buy. Ask the body corporate for copies of the financial records.

Contracts

The body corporate can make contracts. For example, it may engage a body corporate manager to do some or all of its work. It may contract with traders for maintenance work. It might engage a caretaker to look after the property. It might make any other kind of contract to buy services or products for the body corporate. Find out what contracts the body corporate is committed to and the cost.

The body corporate will have to raise funds from the owners to pay the money due under these contracts. As a guarantor, you could be liable if the body corporate owes money under a contract.

Buying off the plan

If you are buying a property that has not been built yet, then you cannot be certain what the end product of the development process will be. If you are buying before a community plan has been deposited, then any proposed development contract, scheme description or by-laws you have been shown could change.

Mixed use developments—voting rights

You may be buying into a group that is run by several different community corporations. This is common in mixed use developments, for example, where a group of apartments is combined with a hotel or a group of shops. If there is more than one corporation, then you should not expect that all lot owners in the group will have equal voting rights. The corporations may be structured so that, even though there are more apartments than shops in the group, the shop-owners can outvote the apartment owners on some matters. Make enquiries so that you understand how many corporations there are and what voting rights you will have.

Further information

The Real Estate Institute of South Australia provides an information service for enquiries about real estate transactions, see www.reisa.com.au .

A free telephone Strata and Community Advice Service is operated by the Legal Services Commission of South Australia: call 1300 366 424. Information and a booklet about strata and community titles is available from the Legal Services Commission at www.lsc.sa.gov.au.

You can also seek advice from a legal practitioner.

Specific information

Information specific to the community corporation and lot you are proposing to buy must be provided by the vendor under Land and Business (Sale and Conveyancing) Regulations 2010 (SA) sch 1 div 2:

  • particulars of contributions payable in relation to the lot, including details of arrears of contributions related to the lot
  • particulars of the assets and liabilities of the community corporation
  • particulars of expenditure that the community corporation has incurred, or has resolved to incur, and to which the owner of the lot must contribute, or is likely to be required to contribute
  • if the lot is a development lot, particulars of the scheme description relating to the development lot and particulars of the obligations of the owner of the development lot under the development contract
  • if the lot is a community lot, particulars of the lot entitlement of the lot.

The following documents should also be provided:

  • a copy of the minutes of the general meetings of the community corporation and management committee for the preceding two years or since the deposit of the community plan (whichever is the lesser)
  • a copy of the statement of accounts of the community corporation last prepared
  • a copy of current policies of insurance taken out by the community corporation
  • a copy of the scheme description (if any) and the development contract (if any) – these documents may be obtained from the community corporation or the Lands Titles Registration Office
  • a copy of the by-laws of the community scheme - copies of the by-laws may also be obtained from either the corporation or the Lands Titles Registration Office.

Note that if the vendor has no agent but the purchaser has an agent, the purchaser’s agent must apply to the community corporation for the information [Land and Business (Sale and Conveyancing) Act 1994 (SA) s 9(2)].

Development of the community title: staging and tiering

The Community Titles Act 1996 (SA) allows for the future development of a scheme in two ways:

Staging

Staging involves the inclusion of a development lot that is to be divided at a later time to create extra lots within that scheme.

Tiering

Tiering allows for the management of large or mixed land use developments. It allows a lot in a community or community strata scheme to be further divided to create a subservient scheme and managerial structures (‘tiered’ management). The first community plan lodged over an allotment is a primary plan of community division, which creates primary lots, primary common property and a primary community corporation. A lot in a primary scheme can be divided by a secondary scheme to create lots and common property and a community corporation at a secondary level. A lot in a secondary scheme can further be divided by a tertiary scheme to create lots and common property and a community corporation at a tertiary level. Corporations in the lower tiers will be members of the corporation of the tier above.

Primary lots do not have to be further divided into secondary lots, and most divisions do not go beyond the primary level. Most residential schemes, consisting only of a moderate number of residential lots, will be a primary community corporation and have only one level of management. Complex schemes involving residential, commercial and even recreational uses should form secondary or tertiary community corporations. For example, a development with a large retail section and fifteen smaller residential lots would most likely have one primary corporation covering the entire development and two secondary corporations, one for the residential lots and one for the retail lots. A tiered management structure may also be set up where there is a large number of lots in a community parcel, even if each of the lots is used for the same purpose.

Each level of the scheme has its own common property, which its corporation will manage. Schemes of more than one level can be complex and prospective purchasers should seek independent legal advice before buying into a scheme of this nature.

Converting from strata title

When the Community Titles Act 1996 (SA) came into operation, it did not affect existing strata corporations. However, from 1 January 2002 no new strata schemes have been allowed under the Strata Titles Act 1988 (SA). Community titles have been created instead. A strata scheme and a community strata scheme are similar, as the boundaries are defined by reference to structural divisions in a building, whereas in a community scheme lot boundaries are determined by surveyed land measurements and generally do not relate to a structure.

Existing strata corporations may, by an ordinary resolution of the strata corporation, become a community strata scheme, which means the corporation will be covered by the Community Titles Act 1996 (SA) and not the Strata Titles Act 1988 (SA) [Community Titles Act 1996 (SA) sch cl 2]. The resolution does not take effect until a copy of the resolution is lodged with the Registrar- General and filed with the Strata Plan. The resolution will not change the boundaries of the units or the common property. If it is desired that the boundaries be changed, an amendment to the plan and the appropriate application must be lodged at the Lands Titles Office.

The articles that existed under the Strata Titles Act 1988 (SA) continue as its by-laws but may be amended if required [sch cl 2(3)(e)]. Similarly, the officers of the strata corporation continue as the officers of the community corporation [sch cl 2(3)(g)].

Any proceedings commenced under the Strata Titles Act 1988 (SA) in relation to a strata corporation before it converted to a community corporation may be continued and completed under the Strata Titles Act 1988 [sch cl 5].

Common questions and answers

Building on a lot

I want to build an addition onto my house, which is part of a community scheme. Can I just go ahead and organise the building work, without involving the corporation? My friend is in a community strata scheme, and I know she cannot alter the outside of her unit without agreement from the corporation, but community schemes are different, aren’t they?

In a community scheme, the corporation’s approval is not needed. However, as well as any Council approval that may be needed, any building work must comply with the requirements of the scheme description. In addition, the corporation’s by-laws may include requirements in relation to building work.

Buying a community title

What do I need to be aware of if I wish to purchase a lot in a community plan?

There are various things that must be considered. They include:

Property matters

  • The type of scheme - is it a community scheme or a community strata scheme? This will indicate what a lot owner actually owns.
  • The by-laws and, if applicable, scheme description and development contract(s) for the scheme. It is advisable to obtain independent advice about the content of these documents.
  • The level of the scheme. Is it a primary, secondary or tertiary scheme? If a secondary or tertiary scheme, have I seen the plans, development contract(s) (if any), by-laws and scheme description of the scheme or schemes above?
  • Have I seen a copy of the plan that defines my unit or lot? Do the boundaries of the unit/lot agree with boundaries shown on the plan?
  • What constitutes the common property?
  • Do the scheme description or by-laws limit the type of structures I can build on my lot?

Financial matters

  • The statement of accounts and financial records of the corporation and those of any scheme above.
  • What must I contribute to the upkeep, maintenance and management of the common area in the scheme? In the case of a secondary or tertiary scheme this will also include contributions that the scheme is required to make to the scheme(s) above.
  • How do the contributions and other charges compare with other corporations?
  • Are there any unpaid contributions owing on my unit or lot?
  • Is the corporation planning any major expenditure that I may be asked to contribute to?
  • Are there any structural problems in the building?
  • Is there a ‘sinking fund’ or reserve of money held by the corporation for emergency expenses and major maintenance costs such as painting?
  • What maintenance services are provided? What are the charges for these?
  • In relation to insurance, whether the corporation is insured for public liability for at least ten million dollars, and whether the common property is sufficiently insured.
  • In the case of a shared wall, does the adjoining owner have a current building insurance policy?

Management matters

  • Is there a body corporate manager?
  • Is there a management committee?
  • What system does the corporation have for resolving disputes?
  • If the scheme is for two lots, have certain requirements of the Act have been exempted, such as the requirement to hold annual general meetings?

Style of living

  • What are the rules about having other people visiting and parking?
  • Will the building or site be accessible if I am disabled and require a wheelchair or walking aid? If not, can suitable modifications be made easily?
  • What are the restrictions on the use of my lot and the common property?
  • Can I store my caravan/boat/bicycle?
  • Are pets permitted?
Company title

I live in a company title; is it the same as a community title?

A company title is where the property is owned by a company and each shareholder is entitled to occupy a particular unit. Strictly speaking, a shareholder does not own the property, but owns shares in the company that owns the property. The shares give an entitlement to occupy a unit. Such schemes can be more expensive and complex to administer, and prospective buyers may find it difficult to obtain finance to buy shares in a company title. Depending on the structure of the building, it may be possible to convert to a community title.

Contributions

I don’t use the common property driveway, as I have a driveway on my lot that accesses the street. Do I have to pay contributions for the maintenance of the common property?

The amount of each owner’s contribution to the corporation is normally calculated according to the lot entitlement set out in the community plan. The corporation may, by unanimous resolution, determine that contributions are paid on some other basis.

Contributions are not just used to cover maintenance of the common property. Other costs, for example in relation to insurance, service infrastructure, and management costs are also covered by contributions. Just because you do not use the common property driveway does not mean you do not have to contribute to its maintenance, as a member of the corporation.

Converting to community title

Our strata manager has suggested that we adopt the Community Titles Act 1996 (SA). What's involved in converting and would we be better off?

To convert to a community strata plan the strata corporation must resolve, by ordinary resolution at a properly convened meeting of the corporation, that the Community Titles Act 1996 and not the Strata Titles Act 1988 will apply to the scheme. The resolution will not take effect until a copy of the resolution is lodged with the Registrar-General and filed with the Strata Plan.

The question of whether a corporation would be better off is a complex one and dependent on factors such as:

  • the number of units involved
  • the expectations of the lot owners
  • the purpose the land is to be used for
  • whether the common property is to be used for commercial gain
  • whether there are units existing above other units, and
  • whether the units are physically separate.

It is suggested that legal advice should be sought before that step is taken, as the Strata Titles Act 1988 (SA) will no longer apply.

A full conversion to define the lots by measurements (that is, conversion to a community scheme) would result in the members owning the entire structure on their lot. This would require:

  • unanimous agreement of lot owners
  • a new survey of the site and all building boundaries
  • an amendment to the plan, and
  • agreement of local and state authorities.

It pays to obtain a quote from a surveyor and a conveyancer. It may be worthwhile converting if the value of each lot increases significantly upon conversion to a lot.

Our strata corporation has lodged a Lodgment of Resolution to adopt the Community Titles Act 1996 (SA); does this mean we can now insure our unit separately?

No. The strata scheme will become a community strata scheme, and so the corporation will still be responsible for insuring the buildings, which are common property. A full conversion to community title would need to be done before owners could insure separately.

Exclusive use of the common property

One of the lot owners in our community scheme was granted exclusive use of part of the common property by the corporation some years ago. We feel that this is an unfair situation. How can we regain this common property for use by all owners?

The corporation can grant a right to occupy the whole or a part of the common property to the exclusion of all or some of the owners or occupiers of the community lots. A unanimous resolution is needed to do so, and the right must be consistent with the scheme description and not contrary to the by-laws.

In a community scheme, exclusive use of the common property can be granted on an ongoing basis; that is, it does not have to be for a set period.

A unanimous resolution of the corporation would be needed to reverse the decision to grant exclusive use.

Fences

The fence between my lot and an adjacent lot is in need of repair. The body corporate manager says we have to sort it out ourselves and that it is not the corporation’s responsibility. Is this correct?

If you are part of a community scheme (not a community strata scheme), then you and your neighbour are joint owners of the dividing fence. The fence is not common property, so the corporation is not responsible to fix it. The issue of repairing the fence is between you and your neighbour. The Fences Act 1975 (SA) covers this area of law. See also the Fences and the Law booklet, published by the Legal Services Commission.

Similarly, if a fence between your lot and neighbouring land that is not part of your community scheme needs repair, you will need to discuss the matter with your neighbour. The corporation has no responsibility to be involved.

If you are part of a community strata scheme, the dividing fence will usually be common property, therefore it would generally be the corporation’s responsibility to repair it. Similarly, a fence between a lot in a community strata scheme and neighbouring land that is not part of the scheme would be the responsibility of the corporation and the owner of the neighbouring land.

Fines

A visitor to my apartment received a letter from the corporation stating she could be fined $500 for unauthorised parking. Is this legal?

A corporation’s by-laws may give the corporation the power to impose fines of up to $500 for breaches of its by-laws. The by-laws apply to owners, residents and visitors. A fine against a visitor or tenant could not be enforced without a court order.

Insurance

Our body corporate manager has advised us that she can arrange our individual building insurance policies for us. Could there be any problems with this?

While each lot owner in a community scheme is responsible for insuring their own buildings, the by-laws of a community scheme may allow for the community corporation to act as an agent for the lot owners in arranging insurance. The corporation may delegate this task to a body corporate manager. If arranging building insurance for lot owners is an option, not a requirement, under the by-laws, then individual lot owners can choose whether they want the corporation to arrange their insurance or whether they want to do it themselves; there is no requirement for all owners to agree.

Problems can arise in relation to the way an insurer invoices the corporation for the insurance premium. If building insurance is arranged on behalf of two or more owners, an insurer may invoice the corporation for one amount, without showing the amount that would be payable for individual lots. If an insurer will not provide a breakdown, then the corporation has to work out each owner’s contribution. Contributions are normally determined according to lot entitlements, but this may not be appropriate in relation to building insurance, because lot entitlements are based on the unimproved value of the land, not the value of the buildings. Thus, whether an insurer will provide a breakdown of the premium in relation to each lot may be one of the factors to consider when choosing an insurer.

A corporation may decide that a lot owner’s building insurance premium, or share of the premium, will be paid as part of the annual contribution levied by the corporation. If so, the levy applicable to your lot may compare unfavourably with the levy applicable to another lot where the owner has arranged their own insurance, or to the contributions levied by another corporation that does not arrange lot owners’ building insurance. Such a disparity in levies may be a problem if you wish to sell your lot.

Managers

What are some issues to consider when choosing a manager?

At least five clear days before the date of the meeting at which the corporation is to consider whether or not to enter into a contract with a manager, the manager must make available for inspection by members:

  • a pamphlet setting out the role of the manager and the rights of the corporation
  • a copy of the proposed contract
  • a copy of the schedule to the policy of professional indemnity insurance maintained by the manager; the insurance must be for at least $1.5 million per claim.

In addition to the information required to be set out in these documents (see Body Corporate Managers), you may wish to consider the following.

  • What services are included in the fee? For example:
    • Is there an after hours emergency service?
    • Will the manager, or an employee of the manager, attend your corporation as needed?
  • Is there any fee charged for keeping the corporation’s funds?
  • Will all bank interest be passed on to the corporation?
  • Will the manager ensure the corporation receives the best bank interest rate?
  • What maintenance company or contractors does the manager normally use, and does the manager receive any commissions, or have any financial relationship with contractors?
  • Will the manager provide your treasurer with regular financial statements to keep the corporation up to date and allow for scrutiny? If so, how often? Note that the manager must provide a financial statement upon request by the corporation, within five days of the request (see Body Corporate Managers).
  • Will the manager supply references from current clients?
  • Does the manager have the skills to help resolve disputes?
Restrictive rules

The rules of my apartment complex are very restrictive. I can't hang washing on my balcony or have a barbeque. What can I do about it?

The by-laws (rules) that govern a scheme can be amended by a special resolution passed at a properly convened meeting of the corporation. A copy of the by-laws as amended must be lodged with the Registrar-General within 14 days of the passing of the resolution.

By-laws that are inconsistent with the scheme description (if any) are invalid. Therefore a consequential amendment to the scheme description (if any) may also need to be made.

If the scheme is a secondary or tertiary scheme, the by-laws and scheme description of the other schemes may also need to be amended.

In some situations, it may be possible to negotiate a resolution and mediation may also be helpful.

Rules

What rules am I bound by when I own a community lot?

By-laws contain the rules by which the scheme is to be run and bind all of the owners, occupiers and visitors to the scheme. By-laws are written exclusively for the particular scheme they relate to. If the community scheme is a secondary or tertiary scheme, it is bound by not only the by-laws written for that scheme but also the by-laws of the scheme or schemes above.

Trees

The owner of an adjoining lot has a tree on their property and its roots are damaging the paving on my lot. Can I ask the body corporate manager to raise the matter with the other owner?

If the tree is on an owner’s lot (not on common property) and is only affecting your property, then it is a matter between you and your neighbour; it is not the corporation’s responsibility to get involved.

Similarly, if a tree on a neighbouring property that is not part of the community scheme is affecting your lot, then it is up to you to discuss the matter with the neighbouring owner.

If an owner’s tree is affecting the common property, then the corporation can discuss the matter with the owner.

If a tree on common property is affecting your property, then you could raise the matter with the corporation.

Types of community title

What is the difference between a regular community title and a strata community title?

There are two types of community titles:

  • community schemes
  • community strata schemes.

Primary community schemes

The satellite image and plan below are of a primary community plan. Each building sits on its own lot. The owners have title to the land under the lot and the sky above, unlike strata titles. They are responsible for the maintenance and insurance of their respective buildings. Where buildings share a common (party) wall the owners of each building are jointly responsible for its maintenance. The common property is the shared driveway down the middle of the group (shown by the red pointer). The body corporate is responsible for the maintenance of the driveway.

Primary community strata schemes

The photograph and plan below are of a primary community strata plan. In a community strata scheme the lot boundaries must be defined by reference to parts of the building, similar to a strata title. There must be at least one lot that exists above another, unless the scheme was previously a strata scheme under the Strata Titles Act 1988 (SA) and has converted by resolution to adopt the Community Titles Act 1996 (SA).

The structure itself is common property and it is therefore the responsibility of the corporation to maintain and insure it. In this regard, community strata schemes are very similar to strata titled unit groups. Common property includes land that is not within a lot, and infrastructure (such as driveways, water, sewer, electricity) that do not serve single lots. In the case of a community strata scheme this includes the external walls and floors, the foundations, the roof, the space in the roof, gutters and eaves immediately below the gutters. It does not include the owner's fixtures and fittings such as kitchens and bathrooms.

The internal walls and lot subsidiaries are not common property but are the owner’s to maintain.

Water rates

Our lots do not have separate water meters and we all pay the same for water, no matter how much we use. Can this be changed?

Unless there are separate water meters for each lot, there is no way to determine a lot's water usage. Contributions are normally paid by lot entitlement; a unanimous resolution is needed to change this arrangement. SA Water offers the following billing options: sending one lump sum bill for water usage every three months to the corporation secretary; dividing the bill in percentages nominated by the corporation and billing owners separately; dividing the bill equally between the lot owners and billing them separately. Whatever the billing arrangement, the community corporation is ultimately responsible to SA Water for the bill. Private water meters may be installed on each lot to determine how the SA Water account should be divided. There are costs associated with the installation and reading of private meters.

    Strata and Community Titles  :  Last Revised: Fri Oct 19th 2012
    The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.