| Strata Committee: |
Section 30(3) of the SSMA, removing the need for an election, provides
that the strata committee for a two lot scheme comprises one member for
each lot, being: |
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For a lot having a sole owner, that owner. |
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For a lot having multiple owners, the owner nominated by them or if
there is no such nomination, the owner first named on the strata roll. |
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Where are a sole owner or nominated multiple owner is a company, the company’s nominee. |
| Meetings: |
Clause 17(2)(c) of Schedule 1 of the SSMA in essence provides that the
quorum for a two lot scheme is two, i.e. both owners must be present.
The purpose of this is to prevent one owner taking advantage of the
other owner’s non-attendance at a meeting. |
| Audit: |
Section 95 of the SSMA provides that an owners corporation is only
required to have its accounts and financial statements audited if it is
a large owners corporation or has an annual budget in excess of
$250,000. Strictly speaking, that rule applies to all strata schemes
which are not large schemes and is not unique to two-lot schemes.
However, two-lot schemes will usually have an annual budget not
exceeding $250,000, which may or may not be the case with other schemes. |
| Funds: |
Section 74(5) of the SSMA provides that an owners corporation may, by
unanimous resolution, decide not to have a capital works fund if the
buildings comprising each lot are physically detached from each other
and if there are no buildings or parts of buildings outside those lots,
i.e. where all buildings are lot property, rather than common property. |
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Such a resolution would also remove the need to prepare a 10 year
capital works fund plan, which would otherwise have been required under
Section 80 of the SSMA. However, as Section 80 requires that plans be
prepared for successive ten-year periods commencing on the date of the
first annual general meeting, that resolution may need to be made
before that period commences, i.e. at the first annual general meeting. |
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Section 76 of the SSMA provides that where an owners corporation,
comprising more than two lots, transfers monies from either the
administration fund or the capital works fund to the other fund or uses
one of the funds to meet expenditure which should have been met by the
other fund, the owners corporation must, within three months levy a
contribution to restore the funds transferred or used to the relevant
fund. This suggests that two lot schemes can do this without need to
levy a contribution to restore the funds. |
| Insurance: |
Section 160(4) of the SSMA provides that, where all buildings are lot
property, an owners corporation may, by unanimous resolution, decide
that the insurance obligations which the owners corporation would
otherwise have had will not apply. In that case, lot owners can and
should separately insure their own lots. Other insurance requirements
under Section 164 will continue to apply, e.g. workers compensation and
public liability insurance. |
| Formality/ administration: |
Other than as set out above, the same management and administration
requirements apply to two lot schemes. Although owners in many two lot
schemes would prefer a less formal management structure, the extent and
complexity of some of these requirements with this may make engagement
of a strata managing agent a practical necessity. A possible compromise
would be to engage a strata managing agent on the basis of a limited
scope of delegated authority, e.g. delegating compliance and
record-keeping functions, but self managing property maintenance
functions. |