In April, we helped a scheme of townhouses where the lots were defined by Standard format (pegs in the ground) and not Building Format. Four of the seven townhouses required major structural repairs that were all related due to a structural steel frame that extended across all four lots that formed a garage for each lot. The repair was significant in value ~ $80,000 and each lot shared a similar proportion of that cost. However, because of the scheme survey format, the repair responsibility was for the individual lot owners and not the Body Corporate.
Our advice was for the Committee to write to each impacted lot with an offer of assistance. The offer was conditional on all lots agreeing in writing to the letter. Some of the conditions of the letter included
- Contractor evaluation and selection is a responsibility of one or more of the impacted lotowners.
- The Committee will only execute the contract once all lots have prepaid the full amount to the Body Corporate.
- The executed contract must be in the name of the Body Corporate.
- The selected contractor must be agreed as acceptable to the Committee.
- One of the impacted lot owners must be the nominee for supervising the contract.
- Progress payments to the contractor must be authorised by the nominee supervising the contract.
- Any consequential contractual issues that have a cost impact will be recovered as a lot expense from the lot owners.
The benefit for the lot owners was that a single contract for all four lots was cheaper than if the lot owners engaged with a contractor individually. Additionally, the lot owners were happy in the knowledge that the full contract amount was collected upfront from all lot owners and held by a trusted party before the contract was signed. The benefit for the Body Corporate was ensuring that the lots were brought to a good standard of condition using a contractor that was acceptable to the Committee.