We all appreciate the importance of a nicely presented property. If you own an apartment or townhouse in a development that is affected by an Owners Corporation, your freedom to make decisions or have a say about matters that affect the appearance of the development such as fencing, painting and colour selection, and landscape gardening, amongst others, is restricted. We are often approached by clients aggrieved by decisions made by their OC on the basis that certain proposed works/alterations will impact detrimentally on the appearance of their apartment of which they are a lot owner. Often these clients are concerned that such decisions will affect the value of their property in the event that they wish to sell their apartment in the future.

But what if your OC or OC committee decides to paint all the window frames in your apartment complex “bright neon pink”? Does the OC have the power to do this? The short answer is “yes”, provided they overcome certain hurdles, and meet certain requirements. A recent VCAT case, namely Mowla v Owners Corporation PS5407083B [2014] VCAT 956 highlighted this issue.

Facts

Mr Mowla brought an application in relation to certain decisions made by the OC’s committee. One of those decisions was in relation to a border that separated his garden bed (which fell within his title) from an area of lawn (which was common property). The other properties in the development had the same configuration, that is, a garden bed, separating border, and the area of lawn in front. Some of the borders were timber, while others were concrete. The borders were on common property. Mr Mowla originally had a concrete border.

After the OC undertook landscaping works, it decided to reinstate all the borders with timber, because many of the concrete borders were in poor condition. However, the OC gave each lot owner the option of having a border reinstated in concrete instead at the lot owner’s expense if the lot owner wished.  Mr Mowla’s concrete border was replaced with a timber border. He was not happy with the appearance of the timber border and took the OC to VCAT, for an order for the OC to reinstate the concrete border at the OC’s expense.  Mr Mowla argued that his original concrete border was not in disrepair, and the timber border was less aesthetically pleasing.

The matter was heard before Senior Member Vassie, who decided not to grant Mr Mowla the order he sought. Mr Vassie made the following comments:

“A decision on what type of border should be there is one for the owners corporation membership as a whole to make, not for Mr Mowla alone. I note that there was no evidence that the concrete border outside his lot was in disrepair or required replacement. I also recognise that the owners corporation has replaced the concrete border with something that is aesthetically less pleasing. But there is no legal error, to my mind, in what the majority of the members of the owners corporation have decided to do, or at any rate have accepted as having been properly done.”

When can the OC make decisions that will affect the appearance of a development?

A subjective fear that certain maintenance works/alterations will affect the appearance of a development, and therefore the value of your property, is not enough to challenge an OC or an OC committee’s decision.

The OC can carry out works/alterations that affect the appearance of a development or building where:

1. The works/alterations are duly passed by an ordinary resolution of lot members. If the alterations constitute “significant” alterations pursuant to section 52 of the Owners Corporation Act 2006, they need to be passed by a special resolution to be enforceable;
2. The works/alterations have been passed by the OC’s committee by majority vote. Section 100 of the Act requires a committee to be elected where there are more than 13 lots. When a committee is elected, it is delegated with most of the OC’s powers. However, if the alterations are “significant”, this decision cannot be delegated to the committee, and it must be put to the lot owners for a vote, and must be passed by a special resolution;
3. The proposed works/alterations do not breach the OC’s Rules. Some OC’s have Special Rules in place that are created by unanimous resolution and registered with the plan of subdivision. Most of the time, these Special Rules are created to keep with the general appearance of the development, and to respect the integrity of the building. If there are no Special Rules, then a set of default Model Rules apply, which can be accessed here;
4. The works/alterations are to be carried out on common property. You should always check the plan of subdivision to ascertain where the common property lies. Where the plan of subdivision is silent, the Subdivision Act 1988 offers guidance; and
5. The alterations and changes comply with Council requirements, overlays and other restrictions. It may be that the OC will require a permit before it can undertake certain works/alterations.

In large scale developments where there are multiple blocks and lot members, it is important to have Special Rules in place that are tailored to maintaining the aesthetic and architectural integrity of the development for guidance and to assist in preventing disputes between members arising. It is also important to ensure that these Rules are carefully drafted to avoid ambiguity and limit the potential for disputes. Rudstein Kron Lawyers is experienced in OC disputes and drafting Special Rules that are tailored to situations such as these.     

This article provides information that is general in nature and not a substitute for legal advice. Please contact Rudstein Kron Lawyers if you wish to obtain legal advice for your personal situation.