By Prof Graham Paddock
AGM still required if scheme under administration?
A1. At the moment, there is no statutory requirement that a court-appointed administrator must hold owner or trustee meetings. In most cases, the order given by the High Court gives the administrator all the body corporate’s powers and functions – so no meetings are required.
This situation will change under the STSM Act – see section 16, particularly 16(4).
How to approve a solar geyser installation
Q2.1. If one owner wants to install a solar geyser in their unit, is this seen as a luxurious or non-luxurious improvement to the common property? Can only one owner install a solar geyser, and what procedure must take place to approve such installation? The insurance on that specific unit’s geyser will obviously be affected by way of a higher premium; will the said owner be liable for the difference of the higher premium?
A2. The issue of a proposed improvement being luxurious or not only arises when the body corporate is paying for the improvement and the terms of PMR 33 apply, which is clearly not the case in this instance.
It is almost certain that parts of the solar-powered installation you have in mind will be on common property. They will probably change the appearance of the buildings and, like air-conditioning condenser units, need to be maintained from time to time.
I suggest that you should see if any other owners want to install this type of unit and then go to the trustees with a set of suggestions as to how the installations should be dealt with. Often the most sensible approach is to find out what all the issues are, in your particular scheme, and then make a special conduct rule to ensure that the section owners concerned, and any others who want to do the same thing in the future, as well as their successors in title, get what they want without any negative effect on other owners’ rights.
Q2.2. In this specific case, it is only one owner who wants to install a solar geyser, and now that I know it’s not seen as a luxurious or non-luxurious improvement, what is the correct process for the owner to follow in order to get the installation approved? Can the trustees approve this or should a special meeting be held where owners approve it or not by way of vote?
A2.2. The trustees do have power to allow owners to make some changes to the common property in terms of PMR 4, but you will see that these are limited to safety devices and things designed to stop insects entering sections, i.e. things covering doors and windows and required to make the use and enjoyment of the section safer or more pleasant. I do not think that the trustees could approve the installation of a solar water heater under this provision.
The other conduct rule that is relevant in this situation is PMR 5, which prohibits any owner doing anything on the common property that makes the exterior of the unit look less attractive. This provision serves to protect the market value of units in the scheme.
Against this background, I suggest that the trustees should find out what owners think of the proposed installation and, if the majority feel that in the position it is to be placed it will not detract from the appearance of the scheme, the trustees should propose a conduct rule that allows any owner to do this.
It is important that any owner who installs such a unit, and any subsequent owner of that unit, be responsible in terms of the scheme’s rules for keeping the installation looking good and in working order. And if the installation falls into disrepair, that owner must be responsible for removing it, or the body corporate must be able to do so at the owner’s expense. Assuming the installation will be attached to a roof, the owner and his or her successor in title must be responsible for any additional costs that arise, in the roof maintenance or otherwise, as a result of the installation.
The rule would typically require an application by an owner to the trustees for permission to add such an installation, but oblige the trustees to approve that application as long as it falls within the requirements of the rule. The rule would include specific detail of the size, appearance and placement of the various elements of the installation. In some situations where the panels are not mounted on roofs but on stands, rules of this type also include height restrictions and screening requirements. And you raised the issue of insurance – the rule should also include a provision that if any common expense, including insurance, is increased as a result of the existence of that installation, the relevant owner will be liable for that increase.
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