[Billen Ben]

PeterC said:

So… Did the budget approved at the last AGM include $3000 for whatever is being done to the hall? If yes, I suppose the EC can approve its being managed this way. If no, I don't think it can just hand out $3000 unless there is a compelling case like the roof about to collapse or something else that might be dangerous or prevent a much greater cost later. 

I think you will find the Act is very specific about who can handle money and who has management roles. The idea that sub committees (i.e. advisory groups ) can be give autonomy over OC money and management decisions is inconsistent with what the Act requires.

 

Yes, the budget was approved and yes sub committees are not to be found in the SSMA as being in a role of management or having the capacity to be handling and accounting for money.

 

Would you be happy to have an advisory group in your OC given OC money to manage and account for when you know it is not consistent with the requirements of the Act? I'm not.

 

The EC cannot approve the $3000 being managed this way and it is surprising you suggest it may be OK. Even the OC at a general meeting has no power to make such an approval.

 

We have numerous sub committees. If each one had autonomy over the budget that covered their respective area then we would have half a dozen different treasurers accounting for various aspects of the OC budget.

 

As for the Flowerpot Man – i have never tried to get on a subbie so the idea i have some bee in my bonnet because i am not on a subbie is completely misplaced – but you already know that.

[Billen Ben]

A sad but all too common story and arguably the greatest challenge for those looking into reform is how to address this sort of situation.

 

It is very hard to give advice because the problem  is not really solvable. It is a common problem and it is only through legislative change that this sort of “little kingdom syndrome” will hopefully become a part of the history of strata.

 

Go to the open forum on strata reform (here) and spell out your story and demand changes that will stop this sort of situation – even if you have no suggestions for changes demand those getting paid squillions by the State Government to deal with the reform earn their money and think of something.

[Billen Ben]

So what is the situation when there is no fence, never has been, between a lot and the common property and the owner wants to erect a fence … is it 50-50 between the owner and the OC?

[Billen Ben]

Billen Ben said:

At the end of the day sub committees are good but they are nothing more than an advisory group …. unless you live here.

In our latest set of EC minutes can be found a motion (introduced motion not from the agenda) to put $3000 in the hands of our Hall Committee to “pay for invoices and costs of workers….”. The motion passes unanimously.

The EC minutes go on to also make it clear that;

“John Citizen (not his real name) will be joining the Hall Committee to take up a vacancy, and will act as the sub committee treasurer and the EC took note of this.”

This is completely contrary to several sections of the Act and the Committee has gone well beyond being an advisory group.

Our Committee (sub committee) has management roles, performs management functions and exercises control over money.

 

Who is going to stop them ?

[Billen Ben]

FLOWERPOT MAN said:

Defaulters up but debts reduced? This is incompetence? Is it possible the most prolific poster does not have a grip and 'these people' do, especially as the CTTT seems to be convinced?

 

You are from my SP, yes?

The adjudicator said

“Events have proven the executive committee right. The above mentioned procedures have been adopted with the result that the arrears situation is much improved and it is likely to fully resolve itself in due course by the approach adopted”

Page 6, paragraph 32, of SCS11/19312 by Adj J Smith.

 

The debt, levies in arrears, when the SCS matter was lodged was $55850 in the most recent audit (2010). The OC convinced the adjudicator  that debt situation had been, to quote Adj. Smith, “much improved”. After the decision the 2011 audit showed the debt was down to $54422.

 

The so called “much improved” debt was a $1428 reduction and hardly due to anything the EC had done. The adjudicator looks like a goose because he says the debt “is likely to resolve itself in due course….”. It will take 38 years to reduce the debt to zero at the rate of $1428 per year.

 

The Adj says “events have proven the EC right” – how so?

The EC disregarded a consensus passed AGM motion. The SCS case referred to above was not a question of was it the right thing for the EC to do. It was a question of preserving the meaning of s21(4) of the Act. The EC had instructions from the OC and ignored them. What use is the Act if Adjudicators take the liberty of not worrying about it?

 

A 2.5% debt reduction, which is nothing more than a normal fluctuation, is not a “much improved” situation and a 38 year time frame to resolve the problem is hardly in “due course”. The EC has only been proven to be able to hoodwink CTTT.

 

Looking at recent EC minutes and the state of the bank balance it seems very likely the debt level will, again, not be much improved this year and in fact it looks possible it might increase, to a record high.

 

Is the self-management of the SP incompetent; without question it is.  Just look at my last levy notice and how i am not charged interest for late payment. The SP is embarrassing enough without people trying to find ways to make the poor management appear competent.

 

I think there is a lesson here for all Flat-chatters:

Standing up for your friends poor management, when the poor management is to the detriment of the SP as a whole, will not lead to good outcomes.

[Billen Ben]

CLAUSE 21    Committees

(1)        The Executive Committee of the owners corporation may establish committees in accordance with this By-Law.
(2)        A committee shall operate for such a period of time as the Executive Committee may determine.
(3)        A committee established pursuant to this By-Law shall be constituted by the following persons who shall be appointed by the Executive Committee and subject to the removal and replacement thereby:
(a)        A member of the Executive Committee (who shall also be designated as the convenor of the committee); and
(b)        Up to four (4) other persons, being members of the Executive Committee, owners or registered lessees.
(4)        The functions of a committee shall be confined to those of an advisory and supervisory nature.
(5)        The members of a committee shall elect a chairperson who shall preside at its meetings wherever possible.
(6)        The meetings and proceedings of a committee shall be regulated in such a manner as the committee may from time to time determine.

 

That is our by-law … now let us look at how it is continually breached.

Most sub committees self-appoint and are refereed to by the EC but at no point did the EC formally establish them.
Most sub committees do not have an EC member.

I have never heard of the EC specifying a period for any sub-committee and they appear and disappear as if they were a pair of quarks dancing in distant space.

They can have one member, they can have 5 or more members depending on how fashionable the sub committee is.

They make decision and the authorise actions; the EC has no issue with that.

You do not need to be an owner or a registered lessee to get on a sub committee.

If a sub committee do elect a Chair it is a secret because it has never been noted that anyone is the Chair of a sub committee.

If someone raises an issue with the by-law not being followed then nothing comes of it. Can the EC be sent a notice to comply … not really because the EC is a group of people with no legal identity.

We currently have a Hall sub committee, a Social Space sub committee, a Roads sub committee, a Cemetery sub committee, an Events sub committee, the Legal sub committee as well as Landcare co-ordinator, Fire Chief co-ordinator, Youth Projects co-ordinator, Markets co-ordinator, Coffee Club co-ordinator and half a dozen other roles. One third of all these positions are filled by the occupiers of just 3 units and most of these fancy roles are nothing more than names on a sheet. The massive frame work is all about a small group of people holding control and nobody dares question them.

At the end of the day sub committees are good but they are nothing more than an advisory group …. unless you live here.

[Billen Ben]

Bongo drum said:

….
I have sent a number of complaints about the basis of the Adjudicator’s decision, to the Chair person for the CTTT and her response is that the matter has been dismissed and no other action can be taken. She has completely overlooked the complaint about the Adjudicator’s conduct in basing his decision, not on the application before him but on another matter all together. He also thought being personal and insulting about the applicant in his orders that were published to all the owners, was relevant and in order.
 

 

Your comments reflect many of my own personal experiences with CTTT.

I often wonder why a CTTT adjudicator makes comment there are no or only a few supporting submissions in a matter … it is as if applications are a numbers games and the content is some what secondary.

I have wondered did the adjudicator even read my application given the reasons seem to deal with secondary or irrelevant matters.

 

I to have made several complaints about the performance of some members and every time i get the standard reply about me not being happy with the decision. I write back stating i am happy with the decision and reiterate my concerns and i get another reply about me not being happy with the decision … i often wonder if i am dealing with people who can read. Funny enough the case i made most complaints about was a case where i got a favorable decision yet it got to the point where CTTT refused to correspond on the matters i was raising.

CTTT are a problem. I hope you can find time to follow the links to the consultation pages that are dealing with comments from the public about strata reform and share your experience at CTTT with the “think tank”.

Click HERE

[Billen Ben]

FlatChatFan said:

About 12 months ago I applied for three Strata searches and was charged $250 each (Sydney, NSW). 

It sounds like you are talking about what some people call a pre purchase strata report or strata inspection. $250 sounds about right.

 

A report, or inspection, is where someone goes in and does a s108 search of everything and rights up a report for you. There are several examples of reports that can be found on the net.

 

The cost and quality / detail in a report vary from operator to operator and there is currently no qualification required to be a “strata inspector”.

[Billen Ben]

Voting isn't compulsory in Qld but i am suggesting that voting be made compulsory in NSW and that one way to vote be in writing – like they do in Qld. People already compulsory vote at three level of government so it is nothing huge to add another level; especially if you do not even have to leave home to do it.

I am of the belief a person in Qld can, instead of sending a proxy, just fill in their yes or no vote for each motion and return their AGM notice so that their vote is counted — they do not have to appear in person.

 

I saw an AGM notice from a Qld managment firm sent to an owner in a NSW strata plan and it had the agree / disagree boxes for every motion if someone did not want to go to the AGM … it is not a valid method in NSW but it was getting used in NSW and i do not think any of the owners in the 6 unit block knew that voting at the AGM in writing was not allowed in NSW.

 

If voting is made compulsory and it can be done in writing then how does it shore up block voting? If people can vote in the privacy of their own home then it has a huge advantage of negating group think and crowd psychology which are both very detrimental to “compulsory thinking” at an AGM .

 

I agree not all EC's are corrupt and evil but if the legislation targets the corrupt and evil then what have the rest got to worry about?

 

It is not so much the evil geniuses i have a concern with, it is the “my way or the highway” types who impose themselves on an OC to the detriment of the OC.

 

My EC do know better and still do not care because CTTT do not “micro manage” SP's and CTTT are not the “strata police”. You can train my bunch all you want and CTTT are not going to do a thing if, owners do not get a detailed agenda, if my EC meetings are full of introduced matters, if the AGM notice is late and full of motions from ineligible people, if interest is not calculated correctly, if s62 obligations are neglected, if there is erosion of equity, i could write a list a mile long of things CTTT will not do orders for.

 

Why wait for fewer rules; anyone who wants fewer rules can come to my SP because we already have virtually no rules, you do not even have to pay your levies if you don't want to because the OC aren't coming after you if you don't — plenty of places for sale and at great prices. My SP is a lovely place that is run extremely poorly. Ignore the poor management (and the people behind it) and my SP is a fantastic place.

I think this forum is going to still be going strong after any reform. I do not know how many posts Jimmy T has read from the consultation website but it seems to me people want more accountability, more clarity, a simpler dispute resolution mechanism and more enforcement of the rules. If this can be done with fewer rules then well done to those behind the reform but if the whole consultation and reform is just about removing rules so things appear simpler and less thing can be classified as problems then things are only going to get worse for strata.

[Billen Ben]

If you make EC members undertake training what is there to guarantee they will enact what they learn – i can guarantee that if my EC did training it would all be forgotten the minute the course was over and it would be back to business as usual. We did a mediation where the current Secretary and the ex-secretary both went into shock when the mediation unit strata specialist explained the EC could not just introduce matters to the EC meeting. A year and a half later the EC still do it – you cannot train some people because they do not care about what they are supposed to be doing.

The solution is to train them and make them accountable – fine EC members for their failures if they wish to continue to not act properly or use proper procedure – weed out the “mini Mussolini's” and have bad habits dealt with by personal penalty.

To go even further some people are suggesting that EC members have a duty of care and the same level of accountability as real corporate directors. There are people behind the management of my EC who be banned from being directors if it were a real corporation.

Strata living can no longer operate on the assumed good will and assumed good intention of people because that is not a statistically sound assumption.

The Act needs to be written to target the lowest common denominator, the dirt bags who infest EC's and run them as their own little kingdoms for the benefit of themselves and their friends. You do not infringe on the good operators by having legislation that targets the bad operators. By assuming people are good willed you leave the door open for bad people to waltz in and take advantage of the misplaced assumption. The door is currently open and many people have walked in – close the door by targeting the lowest common denominator.

 

I also find the concept of handing power to the EC to fine people a very dangerous move. This forum is littered with story after story of biased and “corrupt” EC's and EC members. Not until EC's are under a set of enforcable rules that requires professional, unbiased management would i even think of letting EC's loose with any power to fine people.

 

As far as proxies go – put a limit on them and then wait for all the posts about how people find a way around it. Tell me how does a limit on proxies improve participation- it sounds like it reduces participation and then next thing you know people are at adjourned meetings and then find decisions are being made by a handful of people at the reconvened meeting.

Just make GM voting compulsory in person or by vote on paper (Qld style) – proxies are for exceptional circumstances. Please, someone, tell how limiting proxies is a better idea that mandatory voting. Someone tell me any easier way to improve participation and tell me any other way to get rid of the ridiculous notion that a quorum of 25% is democratic.

Compel EC's to pursue debt over 90 days old and remove the need to be financial to vote. Now everybody votes.

RESULT: Almost 100% participation across all NSW strata. If you think limiting proxies can get even close to such a result then i do not understand how it will do that.

 

The question 4 concept should be explored for matters beyond by-law breaches.

 

1961, 1973, 1996 – the Act does not get rewritten often – you ask “too much or too little?” I feel it is way to little unless you want to spend another 15 years listening to problems that might be resolvable now.

[Billen Ben]

Just get rid of the manager .. it sounds like he isn't doing his employer (the OC) any favors. Look at his agreement, read the termination clause and apply it at the appropriate time.

Strata owners need to get serious about the performance of their managers. Management is a boom industry and there are plenty of good operators if an OC is not happy with the one they have – better still you might consider bringing financial matters back “in house” if you can find a few people with a bit of commitment – could be worth a nice honorarium at the following AGM if they do a good job.

If you aren't a big SP and you do not do a lot of financail transactions and people pay their levies on time then it isn't hard to self manage. Some strata firm even offer DIY management packages with support – if needed.

Is it time people stopped complaining about poor managers and started replacing them. Get pro active and do your OC and the whole strata industry a favor and ditch the poor manager .. everybody wins (except the poor managers)

[Billen Ben]

If we are talking about a section 108 search of the strata records then see https://www.legislation.nsw.gov.au/maintop/view/inforce/subordleg+492+2010+cd+0+N

into your browser.

 

The current rate appears to be $30 for the first hour and then $15 for every additional half hour; or part there of.

Current version for 6 January 2012 to date.

[Billen Ben]

Strata Schemes Management Act

29   Can a strata managing agent exercise the functions of the chairperson, secretary and treasurer or the executive committee?

(1)  The instrument of appointment of a strata managing agent may provide that the strata managing agent has and may exercise all the functions of the chairperson, secretary, treasurer or executive committee of an owners corporation or such of those functions as may be specified in the instrument.

 

What does your agreement say; but then does it really matter what it says because if we read on, part 2 says

 

(2)  However, the chairperson, secretary, treasurer and executive committee of an owners corporation may continue to exercise all or any of the functions that the strata managing agent is authorised to exercise.

 

Run part 2 of section 29 of the strata scheme management act (SSMA) by your strata manager (SM) and then let him know he is on borrowed time if he wishes to continue to contend he is now the “Fuhrer of finances” in your SP because you will make sure the owners and the EC are made aware of his limited role, which is that of being the “minion” of the OC.

 

The guy is the OC's employee, he is not the boss of your finances.

 

The most relevant section of the SSMA would be;

24   Who can exercise functions relating to the finances and accounts of the owners corporation?

A person must not exercise any of the functions of an owners corporation or the treasurer of an owners corporation relating to the receipt or expenditure of, or the accounting for, money of the owners corporation or the keeping of the books of account of the owners corporation unless the person is:

(a)  a member of the owners corporation or of the executive committee and the treasurer of the owners corporation or of the executive committee, or

(b)  a strata managing agent who is empowered to exercise that function, or

(c)  a person with whom the treasurer of the owners corporation is required by an order of the executive committee to exercise that function jointly, and who is enabling the treasurer to comply with the order, or

(d)  a member of CPA Australia, or a member of the Institute of Chartered Accountants in Australia, authorised by the owners corporation to exercise the function, or

(d1)  a member of the Institute of Public Accountants authorised by the owners corporation to exercise the function, or

(e)  during the initial period only—a person authorised by the original owner to exercise the function.

Maximum penalty: 5 penalty units.

 

Note at part b) the SM can exercise functions if empowered … is your SM empowered by his agreement ?

The idea the EC has no control over the expenditure in the SP is somewhat humorous.

Even if your SM is empowered this does not negate part a) and your SM needs to be reminded who is employing him; that should get his attention.

 

As a bonus you could refer to 

21   Executive committee’s decisions to be decisions of owners corporation

(1)  A decision of an executive committee is taken to be the decision of the owners corporation, subject to subsection (4).

(2)  However, the following decisions may not be made by the executive committee:

(a)  a decision that is required by or under any Act to be made by the owners corporation by unanimous resolution or special resolution or in general meeting,

(b)  a decision on any matter or type of matter that the owners corporation has determined in general meeting is to be decided only by the owners corporation in general meeting.

(3)  An owners corporation may in general meeting continue to exercise all or any of the functions conferred on it by this Act or the by-laws even though an executive committee holds office.

(4)  Despite any other provision of this Act, in the event of a disagreement between the owners corporation and the executive committee, the decision of the owners corporation prevails.

 

Ask the SM why he thinks the EC cannot make decisions relating to maintenance given the OC has an obligation to maintain.

 

Without convolution with unusual situations, the pecking order is simple;

The Owners Corporation (the collective owners at a General Meeting)

The Executive Committee (those the OC appoint at the AGM to represent the OC)

The lowly strata manager (the OC's employee)

 

Just politely let your SM know that you know the pecking order and that if he wishes to try to dictate to the OC then the AGM may well find itself faced with a motion to appoint a new SM

 

I am never surprised at some of the nonsense SM's come up with – they are not all bad though.

 

 

 

 

[Billen Ben]

WOW!

I find it interesting that in both the cases above the strata managers both claim a need for a unanimous vote. There are very few instances where a unanimous vote is required and neither of the above cases are even close to being an example of a scenario that requires a unanimous resolution.

Jimmy explains both cases very well and both are a case of a special resolution motion.

In other parts of this forum there is reference to the current consultation being undertaken by the NSW Govt in relation to law reform.

To be perfectly honest i find it quite disturbing that both the strata managers can be so incorrect in the cases above.

One area of the legislation that needs reform would relate to OFT getting serious about who they allow to hold a strata mangers license.

[Billen Ben]

Struggler is right on the money.

If you do try to sell then any buyer who obtains a strata report should find that there are some financial issues with the SP. This could well lead to a potential buyer looking elsewhere or offering less.

If the admin budget is going into deficit then money from the sinking fund must be getting used to cover the running costs of your SP. That money should be getting replaced.

Questionable resolutions, poor financial position, poor compliance to the Act; it does not bode well.

I see that you have a strata manager. I think you need to talk to the manager and let him/her know you are becoming aware of some issue that do not reflect well on his/her ability to properly manage and advise the SP. It could be time to look for new management.

It sounds like the financial problems are easily fixed but it will cost the owners. The procedural and compliance issues are a lot harder to deal with.

[Author]

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