Industry response to article titled “Power Struggle: Doctor forced to sell electric car after his building removed the power point” published by the Sydney Morning Herald’s “Domain” on the 4 April 2022.
Executive Summary
- A tenant leased a strata unit with an allocated car space; and
- A common property power point is located within proximity to the allocated car space; and
- The tenant offered to pay “about $10 a week – or to pay for his exact use if a meter was installed”; and
- The building manager is quoted as saying that the Owners Corporation insisted that the tenant is required to have the unit owner progress matters
Legislative Position
Any tenant within a strata scheme has the right to peacefully occupy their dwelling per the contractual arrangement with their landlord. This right does not extend to the usage of a power point outside their rented space.
The issue cited within the Domain article is that a power point, not metered to the tenant’s unit, nor within their private property, is not available for the tenant’s personal use.
So why the big deal? As professional strata managing agents, difficulties with this scenario are obvious. Some of the main issues are as follows:
- Issue of fairness – paying “about $10 a week” offers no precision as to whether the proposed consideration is adequate; and
- Issue of whose obligation it is to install a meter – obligations of owners corporations are set out clearly within the strata schemes management act 2015. The installation of a new meter would involve an addition to common property. The owners corporation is under no obligation to alter common property; and
- The method by which a common property alteration is considered / approved is via consent within a general meeting of the owners corporation. Such consent would be considered in the form or a meeting motion. This is not something a tenant can progress; and
- Issue of tax implications – should any individual pay “about $10 a week” into the strata scheme’s trust account, this will trigger taxation considerations under “non-mutual income”. At a very high level, receipt of non-mutual income is viewed by the Australian Taxation Office as money that reduces all lot owners’ obligations to pay levies. Levies are paid with “post tax” earnings. As such, there is a need for each individual to declare non-mutual income within their personal tax returns. This has implications on any lot owner who is earning a pension i.e. it may reduce their pension entitlements. It also increases administrative costs/burdens upon an owners corporation. About “$10 per week” may not provide the owners corporation with adequate incentive to deal with the tax consideration created .
Responsive Strata Management Services for Hassle-Free Living!
It is regrettable that such articles are written to evoke emotional reactions without consideration for legislative requirements. Put simply, it is not for an individual to dictate to an owners corporation how common property considerations should be managed.
There is no denying the need for electric vehicle charging within strata schemes. Owners Corporations would do well to seek an organised, uniform approach to this topic so that their asset can be future-proofed and ready to deal with such requirements in a proper manner.
In an example where immediacy is required, a lot owner should be supportive of the process required to progress such matters in a manner that ensures the enduring rights and responsibilities of the owners corporation are not disadvantaged i.e. to cooperate in the requirement of a separate electrical outlet within their lot, metered to their lot, accompanies by a by-law that makes clear whose responsibility it is to repair and maintain the new installation.
Our team has the expertise to guide such matters for all of our valued clients and can also assist in pro-active approaches to such issues. Should future planning for your building be of interest, please do reach out to our team and we will be only too happy to help!
Philip Kooper,
Head of Governance
