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/Factsheet_print/Tenants_and_home_owners/Strata_schemes/The_owners_corporation/_Starting_the_owners_corporation.pdf
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Standard fact sheet.
/Factsheet_largeprint/Tenants_and_home_owners/Strata_schemes/The_owners_corporation/_Starting_the_owners_corporation.pdf
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Large print fact sheet.

Starting the owners corporation 

In a strata scheme

The owners corporation starts when a strata plan is registered with the Registrar-General. In most cases the builder or developer will initially be the original owner.

Definitions

Owners corporation
The owners of the lots in a strata scheme (formerly referred to as the body corporate) are known as 'The Owners – Strata Plan No. X'.

Original owner
The original owner is the owner of the scheme when the strata plan is registered and is usually the builder or developer.

Initial period
The initial period begins when the strata plan is registered with the Registrar-General and ends when one-third of the unit entitlements have been sold.

Unit entitlement
The unit entitlement of a lot that is shown on the schedule of unit entitlement for the strata scheme. Generally, larger lots have a larger unit entitlement than smaller lots.

The initial period

Restrictions during the initial period

During the initial period, the owners corporation must not:

  • change or cancel the by-laws or make extra by-laws that do not give a right or obligation to all owners or all lots
  • alter common property (except under a development contract)
  • incur a debt for more than is set aside in its funds to repay
  • borrow money or give securities
  • appoint a strata managing agent or caretaker to continue after the first Annual General Meeting (AGM)
  • sell any common property.

Application to the Tribunal to alter any common property

The NSW Civil and Administrative Tribunal (the Tribunal) is a specialist, independent, low cost tribunal for the fair and timely resolution of disputes according to law. Disputes are resolved at a hearing or by alternative dispute resolution.

During the initial period, the owners corporation can apply to the Tribunal for an order to waive, vary or extinguish a restriction about the initial period.

If the restrictions are not obeyed, the original owner is liable for any debt or loss of the owners corporation or an owner.

Duties of the original owner

During the initial period the original owner is responsible for all the duties of the owners corporation, even if the first AGM has not been held.

First Annual General Meeting

The original owner must hold the first Annual General Meeting (AGM) within two months of the end of the initial period. There can be a fine of up to $1,100 if this is not done.

Notice of the AGM must be given to each owner and each first mortgagee and covenant chargee shown on the strata roll. This must be done at least 14 days before the meeting. At least 48 hours before the first AGM, the original owner must give the owners corporation:

  • all plans, occupation certificates, specifications, diagrams, maintenance and service manuals, depreciation schedules and other documents and policies relating to the strata scheme
  • all development consents, complying development certificates and related endorsed plans, 'as built' drawings, compliance certificates (within the meaning of the Environmental Planning and Assessment Act 1979), fire safety certificates and warranties obtained or received by the owner or lessor and relating to the scheme or any building, plant or equipment in it
  • the initial maintenance schedule
  • any interim report or final report of a building inspector prepared under Part 11of the Strata Schemes Management Act 2015 and relating to any building on the parcel
  • any other document or item relating to the scheme or any building, plant or equipment as prescribed (eg. sewer diagrams)
  • the certificate of title for the common property, the strata roll and any notices or other records about the strata scheme, but only if the original owner has control of them
  • the accounting records and the latest financial statement.

A penalty of up to $11,000 can apply to a breach.

Voting rights of the original owner

At the first AGM, if you are the original owner and still own half or more of the total unit entitlement, and a vote by poll or special resolution is called, the value of your vote is reduced to one-third of your unit entitlement, ignoring any fraction.

If the motion is for electing the strata committee and you are the original owner and own half or more of the lots, your vote is reduced to one vote for each three lots you own, ignoring any fraction.

If a poll is called on the election of the strata committee, the value of the original owner's vote is reduced to one-third of the total unit entitlement, ignoring any fraction.

First AGM agenda

The agenda for the first AGM must include the following:

  • to confirm or vary the amount of insurance cover
  • the required number of strata committee members and their election
  • by-laws
  • appointment of a strata managing agent, including what functions should be delegated and the remuneration that should be paid
  • to decide whether insurance taken out should be confirmed, varied or extended
  • accounting records
  • to decide, confirm or vary the amount of contributions
  • preparation of 10 year capital works fund plan
  • whether a building manager is to be appointed
  • to consider the initial maintenance schedule
  • to consider building defects and rectification

If the first AGM is not held then an owner or mortgagee can make application to the Tribunal for the appointment of a person to convene a meeting.

If the first AGM is held but a strata committee is not appointed, an owner, mortgagee or covenant chargee can make an application to the Tribunal for an order to appoint a person to hold a general meeting to appoint the strata committee.

The Tribunal can make decisions on disputes or complaints which have not been resolved by mediation.

If a committee has been elected at the first AGM but no office bearers have been appointed, an owner, mortgagee or covenant chargee can make an application to the Tribunal for an order to appoint a person to call a committee meeting to elect those officers.

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