In one of many examples of Lot 158 efforts, on 5 October 2015 Lot 158 tried to reason with BCS Strata Management (they lost contract with SP52948 at AGM in 2016) to avoid massive and persistent mismanagement of common funds and pending large expenses due to neglect of complex. Lot 158 was ridiculed and completely ignored.
Lot 158 tried to reason with Waratah Strata Management and committee members to avoid bankruptcy and unnecessary legal costs and insurance risks on 2 June 2019. Lot 158 was ridiculed and completely ignored.
Lot 158 tried to reason with Waratah Strata Management and committee members to prevent unnecessary legal costs and assist NSW Fair Trading and Police on 18 June 2019. Lot 158 was ridiculed and completely ignored.
Lot 158 predicted risks of running out of money in email and warning to Waratah Strata Management, Uniqueco Property Services, and committee members on 29 June 2019. Lot 158 was ridiculed and completely ignored.
Seven more warnings were sent to Waratah Strata Management and committee members in 2023 - no reply was ever received:
In agenda for Annual General Meeting 2023, Waratah Strata Management continued to mislead owners, confirming problems with strata funds without disclosing any balance sheets from funds, ongoing problems with fire safety, and providing completely false and fabricated figure of 18% inflation rate over three last years:
Even layman can easily confirm that figure for official inflation rates of 18% for three years prior to 2023 were grossly inflated, false, and deliberately designed to coerce owners:
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... whilst sending this agenda to owners (full of errors and misleading statements)
Few serious legal cases related to strata and building managers, and strata complexes in general in Australia:
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In a 2009 NSW Supreme Court case Yedway Pty Ltd v Owners
Corporation of Strata Plan 62871 [2009] NSWSC 8 (3 February 2009) -
caretaker agreement terminated for 'misconduct' under the
agreement.
Body corporate terminated a caretaking agreement pursuant to clauses that the manager engaged in misconduct in carrying out or failing to carry out the functions required under the contract, and the Manager failed to carry out contractual duties, and persisted in the failure for 14 days or more after the body corporate, by written notice, required the Manager to carry out the duties:
Most Caretaking Agreements allow the Body Corporate to terminate the Agreement if:
(a) the Manager is convicted of an indictable offence involving fraud and dishonesty; and
(b) the Manager is convicted of an offence involving an assault; and
(c) the Manager engages in misconduct, or is grossly negligent, in carrying out or failing to carry out the functions required under the contract; and
(d) the Manager fails to carry out contractual duties, and persists in the failure for 14 days or more after the Body Corporate, by written notice, requires the Manager to carry out the duties,
(e) the Manager carries on a business involving the supply of services to the Body Corporate, or occupiers of lots, without holding a licence or other authority requirement by law, or
(f) the Manager transfers, or accepts the transfer or, an interest in the contract without the Body Corporate's approval.
In a 2009 NSW Supreme Court case, the Body Corporate terminated a Caretaking Agreement pursuant to sub-clauses (c) and (d) above. The Body Corporate did not rely on any instance of "gross negligence" but primarily relied on its contention that there was "misconduct" on the part of the Manager which was caught by sub-clause (c).
Counsel for the Manager submitted that "misconduct" pursuant to sub-clause (c) refers to conduct that is in some sense reprehensible or illegal, such as stealing. It was pointed out on behalf of the Body Corporate, however, that illegal conduct such as stealing is likely to fall within sub-clause (a), while another form of illegal conduct is covered by sub-clause (b).
The Judge accepted that "misconduct" in sub-clause (c) must be given a wider meaning.
The Judge looked at two cases dealing with misconduct -one by a solicitor and the other by a medical practitioner. In both these cases, the question of misconduct was judged according to whether the individual's conduct failed, to a substantial degree, to measure up to the standard of professional conduct adopted or approved by practitioners of good repute and competency. The Judge stated that he could see no difficulty in applying such a standard to a Property Manager or a Building Manager.
Accordingly, the Court decided that, in this case, it needed to ascertain if there was misconduct by the Manager in carrying out, or failing to carry out, the functions required by the Manager under the contract. The Court said that the standard of behaviour on the part of a Manager of good repute and competency in or about these particular functions will be shaped very likely by the nature of the functions. The Judge further said that the question whether "misconduct" occurred should be approached by reference not only to an isolated incidence or event but also to the general and continuing pattern or behaviour.
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Building manager jailed for stealing hundreds of items from
residents:
A Sydney strata apartment manager who stole hundreds of items and housed them in an 'Aladdin's-cave' inside the building has been jailed for numerous break and enter offences.
Mr. Jaden Hati was arrested in 2019 after Police began investigating a spate of larceny offences in a Pyrmont complex.
He was bail refused by Police and held in custody while his case proceeded through the Court system.
Hati was sentenced to a head sentence of six years imprisonment with a non-parole period of three years.
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Jail for Figtree real estate agents after $1.4m fraud:
Mr. and Mrs. Roger and Gordana Ocvirk, admitted to misappropriating $1.2 million from strata company Strata Decisions Wollongong and $198,708 from real estate agency Dougmal Harcourts Warilla between August 2010 and January 2012, leaving almost 2000 clients out of pocket.
Mrs. Ocvirk had previously pleaded guilty in Wollongong Local Court to two charges of failing to account for the money and one of failing to properly supervise Strata Decisions.
Her husband entered guilty pleas to the same three charges yesterday after his application to have the matters dealt with under mental health legislation was rejected.
Sentencing the duo to at least 12 months' jail, Magistrate Susan McGowan said the Ocvirks' actions constituted a "substantial breach of trust" over a lengthy period of time.
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The Strata Agency strata manager in jail:
A Sydney strata manager who stole more than $1 million from the apartment and business owners whose buildings she looked after has been sentenced 15 months in prison.
Ms. Rachael Kwawegen, 39, the co-founder of boutique strata company The Strata Agency used the cash she salted away from the trust accounts she managed to put down a deposit on a house, buy cars and support a lifestyle she could not afford, Parramatta Local Court heard on Tuesday.
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Strataco Strata Pty Ltd staff in jail:
The power company had cut off the electricity after Mr. Jason Christopher Hext, of Strataco Strata Pty Ltd, transferred the owners corporation funds into his personal accounts rather than paying their utility bills.
Mr. Hext defrauded his clients of more than $67,000 over a six-month period. He was sentenced at the Parramatta Local Court to 12 months in jail.
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Agent jailed over $370,000.00 fraud:
A former property manager has been sentenced to 18-months in jail for stealing more than $370,000 from real estate trust accounts.
Mr. Mark Anthony Kolodynski, pleaded guilty to taking the funds during his employment as a strata manager and rental property manager.
Mr. Kolodynski was convicted of taking $129,457 from Peeco Pty Ltd, trading as Harcourts Northern Beaches & Northern Strata, and $243,965.30 from Bevans Wollongong.
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Strata levies in amount $650,000.00 feared lost to agent's trust
fund on 9 March 2013
Thousands of apartment-owners fear for the whereabouts of millions of dollars in levy payments after a criminal investigation was launched into the strata company managing their affairs.
NSW Fair Trading Assistant Commissioner Robert Vellar said about $650,000 was thought to be missing from a trust fund operated by The Strata Agency, but that figure was expected to rise as the forensic analysis of its bookwork got underway.
"We are investigating, and moved quickly to appoint managers to the business," said Vellar. "We are treating this matter seriously and, depending on the outcome of our investigation, charges for fraud under the Crimes Act may be laid if the evidence exists."
The ''boutique'' strata management company, which operates from offices in Crows Nest and Manly, oversees about 240 Sydney apartment and commercial buildings for 5500 strata owners. Advertisement
Strata managers collect levies from individual owners and use them to pay service and utility bills for the whole building, as well as to accumulate ''sinking funds'' for future repairs and maintenance. The annual cash turnover for large buildings passing through their hands easily runs to several million dollars.
Chartered accountants Grant Thornton have been appointed external administrators and will hold a creditors' meeting on Monday.
Pamela Dilworth, a member of the executive committee for a large 245-unit apartment building at Olympic Park that signed up with The Strata Agency and transferred its funds over to it in January, said everyone was worried that their money might be missing. "We don't know what's happened and it's very distressing and frustrating for everybody," she said.
"It's come as a huge shock. You have to assume it's a theft from the trust fund, as where else would you get that amount of money from, for God's sake?"
The founder and managing director of the business, Rachael Kwawegen, is a former real estate agent.
She is no longer at the company's offices and friends said she was currently in hospital.
Her partner and fellow principal, Justin Steer, was at the company - which was continuing to trade - helping the administrators and investigators with their examination of the accounts.
The secretary of another apartment building in Crows Nest, who asked not to be named, said she was desperately trying to get confirmation that their cash was safe and was getting the signatories to their accounts changed.
"We had about $250,000 in the trust fund as we've always tried to maintain a healthy sinking fund," she said.
"But we don't know if it's still there and, technically, we don't even know if we're creditors of the company, so don't know if we'll be allowed into the meeting on Monday."
But Mr Vellar said damage to any victims of a strata fraud was restricted by a property compensation fund operated by the Office of Fair Trading in NSW. That fund is made up from licence fees and interest on bonds in order to cover any shortfalls in trust funds.
John Hutchison, of the apartment owners' peak body, the Owners Corporation Network, moved to reassure apartment owners, saying the quick action by Fair Trading to put the company under administration had safeguarded owners' funds.
"Our belief is there's no reason to do a runner from your strata manager," he said. "The steps have been taken to protect owners corporation funds and the operations of The Strata Agency are continuing."
Bankstown unit fire inquest: strata manager failed to inform owners about safety defects
Ku-ring-gai Council issues list of orders for strata owners of Killara 'death trap'
Brisbane body corporate receives heavy fines for non-compliance with fire safety laws
14 Examples of Corruption, Coercion and Bad Behaviour in Body Corporates
Vickery v The Owners - Strata Plan No 80412 [2020] NSWCA 284:
In a landmark decision handed down by the NSW Court of Appeal in December 2020, the court determined that the New South Wales Civil and Administrative Tribunal (NCAT) has the power to order damages under subsection 106(5) of the Strata Schemes Management Act 2015 (NSW) (the Act) pursuant to NCAT's jurisdiction conveyed by section 232 of the Act.
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NCAT can terminate oppressive building management (or strata management) contract, as shown in January 2022, where the Tribunal exercised its power to terminate a building management agreement for the first time, in the case of The Owners- Strata Plan No. 64807 v Sunaust Properties Pty Ltd [2022] NSWCATD 20. After concluding that section 72 of the SSMA applied to the Agreement, the Tribunal determined that the Agreement should be terminated under section 72 on the basis that: the BM had failed to perform the Agreement satisfactorily, the charges payable by the owners corporation under the Agreement were unfair, the Agreement was otherwise harsh, oppressive, unconscionable or unreasonable.
The Tribunal identified the following conduct as evidence that the BM had failed to perform the Agreement satisfactorily:
building manager had failed to perform the Agreement satisfactorily
the Agreement was otherwise harsh, oppressive, unconscionable or unreasonable
building manager regularly failed to act on instructions given by the strata managing agent for the OC, including its requests for CCTV footage and access passes, contrary to the Agreement
building manager charged fee increases and additional fees inconsistent with the terms of the Agreement - further, there was no evidence to support a finding that the Agreement had been varied by, or the additional payments had been approved by, the strata committee
the circumstances surrounding the attempt by building manager to halt the AGM were knowingly false and improper and were intended to avoid a resolution for an audit being made at the AGM
At first instance, the owners corporation was successful and NCAT held that it should exercise its discretion to make an order terminating the agreement.
This was overturned by the appeal panel (Sunaust Properties Pty Ltd v The Owners Strata Plan No 64807 [2022] NSWCATAP 246 (27 July 2022) and Sunaust Properties Pty Ltd v The Owners Strata Plan No 64807 (No 2) [2022] NSWCATAP 335 (27 October 2022), but on jurisdictional grounds and the decision remains important in demonstrating circumstances which may lead to an order for termination of a building management agreement, where the same jurisdictional problems do not apply:
Supreme Court proceedings were already in progress and Clause 5(7) of Schedule 4 of the Civil and Administrative Tribunal Act 2013, effectively negated NCAT jurisdiction in these circumstances. NCAT did not accept Clause 5(7) as precluding jurisdiction, because the two sets of proceedings involved different issues and the principal remedy sought in the NCAT proceedings was termination, whilst that remedy was not available to the Supreme Court. NCAT Appeal Panel took a different view, finding that Clause 5(7) did preclude jurisdiction to hear the application, as the two proceedings arose from the same context of legal and factual issues, creating a realistic risk of concurrent and inconsistent findings by the Supreme Court and NCAT. The Appeal Panel also found that NCAT would have jurisdiction to hear an application, if it did not engage Clause 5(7), and rather than dismissing the application, remitted the application to the Consumer and Commercial Division, effectively leaving the owners corporation to decide whether to withdraw the application or prosecute it again in the Consumer and Commercial Division without reliance on issues before the Supreme Court.
NCAT considered an additional jurisdictional point relating to building management agreements in place on commencement of the SSMA on 30 November 2016. Essentially, NCAT held that caretaker agreements commencing on or after 30 November 2016 are vulnerable to a termination order under Section 72, regardless of whether the caretaker has exclusive possession of a lot. The building manager had advanced a technical argument that the effect of transitional provisions under the legislation and a change in the definition of building manager was that NCAT’s power to order termination of a prior agreement was limited to circumstances in which the building manager was not entitled to exclusive possession of a lot.
How complex this legal case can be is shown by four court events related to it:
The Owners — Strata Plan No 64807 v Sunaust Properties Pty Ltd (2022) APLC 22-002, New South Wales Civil and Administrative Tribunal - Consumer and Commercial Division, 17 January 2022
Sunaust Properties Pty Ltd v The Owners — Strata Plan No 64807 (2022) APLC 22-075, Supreme Court of New South Wales, Court of Appeal, 27 July 2022
Sunaust Properties Pty Ltd v The Owners SP no 64807 (no 2) (2022) APLC 22-051, New South Wales Civil and Administrative Tribunal - Appeal Panel, 27 October 2022
Sunaust Properties Pty Ltd t/as Central Sydney Realty v The Owners-Strata Plan No 64807 (2023) APLC 23-025, Supreme Court of New South Wales, Court of Appeal, 14 August 2023
Frequent failures to maintain common property, high-risk legal cases, failed insurance claims, and lack of proper enforcement of by-laws, generate serious problems. And the risks can come in any form due to failure to disclose problems in the complex:
Supreme Court ruling in Western Australia in May 2022 has proven other factors – like your new neighbours – can completely derail a house sale, making it something both buyers and sellers need to be aware of:
Supreme Court of Western Australia - HILLAGARATNAM -v- DOAN [2022] WASC 185 (27 May 2022)
The ruling, handed down at the end of May this year, saw the sale of a $390,000 apartment in Perth disintegrate after the sellers failed to disclose the presence of a particularly nasty and belligerent neighbour.
The buyer successfully sued the vendor for breach of contract and fraudulent misrepresentation of the property after the sellers signed a contract claiming: “The seller does not know of anything which will materially affect the buyer’s use or enjoyment of the strata lot or of the common property comprised in the strata scheme.”
The buyer contended that, in fact, the sellers were well aware of the continued aggressive behaviour of the upstairs neighbour, as it had reportedly driven residents out of the unit previously.