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May 07, 2016

Is your sectional title complex looking a bit tired?


Sectional title maintenance and improvement

Maintenance
The trustees of your body corporate need to maintain the complex (to keep it more or less in its original condition). These items are provided for in a budget that deals with routine maintenance and provision for unforeseen expenses. The trustees normally have discretion to authorise spending on these items. If the maintenance item is out of the ordinary (e.g. you need to spend a large sum to resurface your tennis court) a majority of the owners should approve the expenditure.

Improvements
Sometimes, it may be necessary to improve the property (perhaps to make it appear more modern).  An improvement that is a “must have” is likely to be non-luxurious but one that is a “nice to have” is probably luxurious. The common property of a scheme is owned by all owners in undivided shares. One of the basic principles of co-ownership is that all owners must agree to any significant or change to their property.

Maintenance of the common property, especially in schemes that have been running for a few years, should hold no surprises. Improvements to the common property, on the other hand, are not routine. This uncertainty is unfortunate because while a non-luxurious improvement must almost always be authorised by a special resolution of the body corporate, a difficult thing to achieve, authorising a luxurious improvement always requires a unanimous resolution, an exceptionally difficult thing to achieve.


The trustees are entitled to suggest a non-luxurious improvement but there is a specified procedure that must be followed to get the authorisation. The owners must be notified in writing of the trustees’ suggestion and given 30 days to request a meeting to discuss the proposal. They must be fully informed of the financial implications and, if any owner requests a meeting to discuss the improvement, a meeting must be held and the special resolution taken at the meeting. If the resolution is not taken, the improvement cannot be made. There are two implications to this provision. The first is that if no owner requests a meeting within the required thirty day notice period, the meeting need not be held and no special resolution is required to authorise that particular improvement. The second is that this is one special resolution that must be taken at a meeting and cannot be taken by round robin.
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