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Our building recently had some construction work done. The contractor engaged in action that was a significant breach of the safety provisions covered by the contract (under the relevant legislation). Remediation work by a third party with relevant expertise was required.
At the same time, the contractor issued an invoice for progress payment. The strata manager sought approval from the SC to pay the invoice. The SC has an even number of members. Half of the committee voted to delay payment until the remediation work was completed, due to concerns that the contractor may delay the remediation which would result in further health and safety implications. The other half of the committee voted to pay the invoice. The votes took place via email and the Strata Manager was included in the emails, and therefore would have been aware that there was a tied vote. One working day after the tied vote, the Strata Manager paid the invoice.
Did the Strata Manager have the authority to pay this invoice knowing that the vote was tied? There is a dominant person on the committee who regularly ignores input from other committee members. It is possible that they instructed the Strata Manager to pay the invoice, without having a majority vote to give the instruction.
How should the committee members who did not approve the invoice proceed – ask Strata Manager if someone on the committee instructed them to pay? Ask for evidence of any instruction? If there is evidence that a committee member provided such instruction, without a majority vote, what action can be taken? Can they be removed from the committee? Can any action be taken against the Strata Manager?
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Unless you have something in your contract or agreement with your strata manager sying they have to get committee approval before paying bills, there’s not much you can do … except ask them why they were so quick to pay.
How should the committee members who did not approve the invoice proceed – ask Strata Manager if someone on the committee instructed them to pay? Ask for evidence of any instruction?
That would be reasonable, but they might turn around and say there was no instruction NOT to pay, so they just did their job.
If there is evidence that a committee member provided such instruction, without a majority vote, what action can be taken? Can they be removed from the committee?
They can be voted out of an executive role if they have one by a simple majority vote on the committee. They can be voted off the committee (for a year) by a simple majority at a general meeting. And you can make a case against them being elected at your next AGM.
Can any action be taken against the Strata Manager?
For what? A tied committee vote means the status quo prevails. The SM could argue that the status quo is to pay bills. However, if you can find evidence of non-declared kickbacks and commissions, you can make a complaint to Fair Trading and, as well, get shot of the strata manager at the next opportunity, such as when their contract comes up for renewal.
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Eyeroll, from what I have seen in my strata, I agree 100% with Jimmy’s first point about whether or not there is mention in the strata mgt agreement that pmt by the strata mgr can only follow an instruction by the strata committee or for that matter any person nominated by the strata committee to act in its name.
Separately, the question of whether the progress pmt invoice was justified. The strata mgr should be asked what work by the contractor justified the invoice to be paid?
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I’d go straight back to what was in the contract. A lot of contracts have a payment schedule in them which would detail if and when progress payments should be made.
There might not be anything necessarily to vote on if the strata legally needs to keep up its end of the deal.
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