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Topic
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Deep in the heart of strata living there’s a grubby little secret … a stain on the whole business that politicians ignore and Fair Trading and the CTTT won’t or can’t do anything about.
QUESTION: I own a unit in a very large block where the caretaker has a 25-year contract. The previous executive looked through the caretaker agreement and identified various activities that were not being performed.
The caretakers then obtained proxies and used this to vote out the previous committee and got one of themselves elected to the committee, with the intent to continue their merry way without owners interference.
The strata manager does not see an issue with this as they are not voting on giving themselves a direct benefit. Do we have any recourse or we have to get all proxies cancelled and vote them out at the next AGM?
ANSWER: Firstly, there are plenty of good caretakers out there who are valued members of their communities. There are also cowboys, chancers, crooks and lead swingers.
The latter have often paid a lot of money get the contracts so they then charge their owners high fees to recoup their investment – and that’s before they even start charging you for the services they actually perform. If, in fact, they do.
You need to tell owners what this person is doing to your building. But remember, non-resident owners generally respond to only one issue – the value of their property.
So don’t make it about personalities or historical grudges. Instead, get quotes from local real estate agents about how much more owners could get in rents and sales if the building was properly managed.
If you can raise 25 percent of votes, call an EGM to sack the EC then you and your supporters should send this information out by mail, plus your list of preferred members, with proxy forms and stamped addresses envelopes for their return.
All new proxies cancel out previous ones so your “slate” should be elected and you can start getting your caretaker back to work.
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If I might be permitted, the dirty little secret referred to can have, as suggested, catastrophic effects on an Owners Corporation, and thereby hangs this tale. In the telling of it, other OC’s might benefit from the experience.
Our OC is 15 years old, and in the setup process, of course there was a certain amount of venality involved. The developer sold off the caretaker rights, before the OC came into existence, to recoup some of his costs, as was his right. However, the contract he set up contained no hours of duty, no hourly rate of pay and the ability of the OC to exert supervisory control was in effect practically nil. The point about our caretaking contract is that it was written without any input from the OC.
Our first caretaker, installed by the developer, was a hard-working, conscientious man who was an asset to the OC. This person assigned the business by sale after 2 years to our current caretaker. For 6 years, the current caretaker was also conscientious and helpful, but then after 6 years, all hell broke loose.
His first sally was to demand at an exectuve committee meeting, approval for an increase in remuneration. At the same meeting he presented an evaluation which he had funded which purported to show that there should be a 60% increase in his remuneration!!! The response of the committee at the time was that a response would be forthcoming when the committee had had time to consider the matter, and it would also need to be put to a General Meeting. Needless to say, the committee did not accept the demands of the caretaker.
Within a month, the caretaker had escalated the matter, and instead of using the dispute provisions within the contract to settle the matter, lodged a claim in the state industrial relations court.
Despite the OC being prepared to negotiate the matter before it went to court, the caretaker refused, the matter went to court, there followed four years of legal catastrophe, with the result that the matter was decided in favour of the OC (which actually set a precedent in IR documentation), the caretaker spent $150,000, the OC, in spite of winning, had costs of $40,000, and we now have a totally hostile caretaker who has neve accepted the verdict of the court and has waged guerilla warfare on the EC and the OC ever since, which now amounts to 6 years of helland disruption.
The situation is that the caretaker has managed to disrupt the work of the EC to the extent that OC members do not wish to serve on the committee, hours are spent on petty points of order and legal challenges to actions of the committee and the goodwill which facilitates the effective functioning of OC’s is exhausted.
There is much more detail with which I won’t bore you, but to suffice to say the effect is horrifying. A good 50% of OC time is now spent reacting to manouvers of the caretaker, who is taking his revenge by disrupting wherever possible, the functioning of the OC.
The lessons?
1. Governments should act to prohibit the situation where a caretaker can also be a member of an OC, because of the potential conflict of interest, and the possible manipulation of the OC.
2. OC’s should always be allowed to set the terms of any caretaking contract, without having a contract foisted on them by a developer.
Same old same old, and as Jimmy points out, niether the government nor Fair Trading are interested in addressing the issue.