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Topic
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Our last year AGM, the quorum wasn’t formed, however, the strata manager(chairperson)still went through all the motions with those attended the meeting. One of the motion is to renew the strata agreement for 3 years. Two of the unit owners signed the contract on the spot.
The adjourned meeting was scheduled 7days later, the strata manager chaired the meeting, no unit owners actually attend the adjourned meeting. The strata manager holds a few proxy in favor of chairperson.
The meeting minutes combined the first AGM and adjourned meeting, the outcome is all motions were passed.
I want to lodge a mediation request with Fair trading to challenge the validity of the strata agreement due to
1.strata manager’s conflict of interest
2. We can prove the majority of the owners didn’t receive the notice for the adjourned meeting3. The strata agreement shouldn’t be signed at the first AGM when the quorum wasn’t formed.
Are these the reasonable grounds to invalidate the strata agreement?
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Your reasoning sounds OK to me. If the signing of the contract renewal was dated at the first meeting but the minutes also record the lack of a quorum and the deferral of the meeting, then that would seem unequivocally invalid to me. Do you have a previous valid contract with the managing agent that enables you to continue with them performing the routine matters while you sort out the validity of the renewal?
If all this was last year, presumably the agent has been managing for at least half a year. Perhaps they will have to be paid for that but a penalty for failing to observe proper process could be that they are only paid the continuing rate from the end of the last contract, not the possibly higher amount of the first year of the invalidly renewed contract.
An option to make the contract retrospectively valid would be to call a general meeting at which it is resolved with proper process to do what was previously done without proper process. An offer could be made in mediation to do that if the agent agreed to a discount.
One thing though. In the ACT, perhaps elsewhere – I’m not sure, a meeting that lacks a quorum can proceed with a ‘reduced quorum’ after waiting 30 minutes for stragglers to show up. Then, the minutes of the meeting must be distributed within 7 days with a notice pointing out that the reduced quorum meeting decisions can be overturned by a petition of 50% of owners if received within 30 days. So, just perhaps, there is a provision like this where you are and perhaps the decision was valid if the reduced quorum procedures were followed.
@Sir Humphrey said:
One thing though. In the ACT, perhaps elsewhere – I’m not sure, a meeting that lacks a quorum can proceed with a ‘reduced quorum’ after waiting 30 minutes for stragglers to show up.This has been the case in NSW since the new laws came in in December last year.
Also, I wonder if too much time hasn’t passed for the AGM decisions to be challenged – I have a feeling there is a time limit of 28 days.
The best angle of attack would be the conflict of interest issue.
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