VCAT rules that pigeon infestation on apartment building not enough to justify special levy

An owners’ corporation (OC) in St Kilda has found itself in a messy situation in VCAT, with the Senior Member refusing to enforce an OC request to certain lot owners to rid the main apartment building from a pigeon infestation.

The building comprises a main multi-storey block of residential apartments, together with ground floor retail.

Lots one and two of the development are three-storey townhouses on an adjacent block but still part of the overall OC. The lot entitlements for these townhouses are four times higher than a one-bedroom unit in the main apartment block.

The OC sent a letter to all owners advising that an Urgent Special Levy was being raised to cover the costs of ridding the main apartment block of pigeons, cleaning the decorative facade of the main apartment black, and also to cover the additional costs of an increase to insurance costs. Accompanying the letter was an invoice for the lot owners for special levies totalling $3,656.31.

The lot owners paid that portion of the levy comprising the increased insurance costs, but disputed the payment of the pigeon levy which remained unpaid.

The OC wrote back to the lot owners acknowledging that they received an indirect benefit from the pigeon control works only, applied the benefit principle and reduced the levy by 50 per cent overall.

This still did not satisfy the lot owners and the matter proceeded to a hearing at VCAT.

The OC submits that the lot owners received an indirect benefit from the pigeon control works undertaken on the multi-storey building as follows:

potential for reduced insurance premiums;

reduction in adverse health effects and injury to residents and visitors;

potential increase in property value;

improved appearance of the complex; and

minimised pigeon infiltration.

The lot owners disagreed, and said, there was no evidence to substantiate any reduction in insurance premiums as a result of the pigeon control works, and that insurance premiums had increased.

Secondly, there is no risk of adverse health effects and injury to residents and visitors as the townhouses are located in an adjoining building;

Thirdly, there is no potential increase in property value as the townhouses are in a separate building, with an address on a different street;

Fourthly, no works are being conducted to the townhouses, which presents as a separate building, so there is no benefit of improved appearance for the townhouses, and fifthly, works undertaken on a separate building will not minimise infiltration to the townhouse and may potentially drive the pigeons towards the building in which the townhouses are located.

The VCAT member found that there was some indirect benefit to the townhouse owners, as the risk of health issues, slippage, and increased insurance claims was a risk borne by all lot owners in the subdivision, indeed the payment of insurance levies is raised by the one OC, of which all lot owners in the subdivision are members.

The townhouse owners also received an indirect benefit from the pigeon control works in respect of the appearance of the multi-storey building and a potential increase in property values. Being part of the same subdivision the condition, and appearance of the multi-storey building will be of relevance and concern to any potential purchaser – a pigeon infestation or poor appearance of the multi-storey building is therefore likely in the Tribunal’s view to impact on the property values of the building in which the townhouse is located.

However, overall, the OC’s exercise of the benefit principle of 50 per cent was still far too high for the VCAT’s liking. The levy was tossed out by the VCAT, and the OC will have to start all over again.

This case reinforces that OCs need to be very careful in how they apply the benefit principle. Even a 50 per cent discount is sometimes not enough •