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Mr Strata said:
Dear all,
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An EC must formalise any decisions they want to make via a committee meeting, giving 72 hours notice, either by placing notice on the notice board (if the by-laws for the scheme require the scheme to have a notice board and the scheme has a notice board), or sending notice to all owners. This is to allow owners (1/3) the opportunity to object to a decision the EC are seeking to make.
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If the EC enact a decision without proper process any individual owner could object to this, taking the matter to the CTTT and have the decision and action overturned, which could prove costly to the OC.
Mr S
I see Mr. Strata as an excellent guide to have when traveling through the strata maze. A top poster whose comments i find accurate and informative.
Without trying to diss what Mr. Strata says I can say I have been to CTTT over failures to follow the processes above. I sent minutes from over a years worth of meetings.
No quorum, no proper notice, no detailed agenda, introduced matters, a non owner/visitor made Chair, repeated failures to record some received and sent correspondence, the power of veto is useless as owners have little idea what business the EC will deal with.Every EC meeting requirement in the Act my EC has broken, and generally the non compliance is repeated or ongoing and the real tragedy is that CTTT did nothing so it all still goes on.
Perhaps i asked for the wrong orders, perhaps these breaches do not constitute dysfunctional management, perhaps they are not absolute duties of the OC.
It is regrettably wishful thinking that the Act means what it says given the results i get from CTTT — but CTTT is notoriously inconsistent so what they ignore here they may well enforce elsewhere.
As usual Mr. Strata is right on the money as to what should be going on.
Not literally; the idea may have come indirectly from CTTT's “quality work”.
My last Executive Committee (EC) meeting had 5 agenda items, all very vague, yet the meeting had 20 motions all of which were matters that did not flow from any of the vague agenda items. My EC introduce anything they like when they like and twice CTTT has considered the matter not worthy of a comment or an order.
The Act requires a detailed agenda and all sorts of other things but “It is not for a Strata Schemes Adjudicator to micro manage the affairs of an Owners Corporation” G Durie in SCS 11/28540.
What the Owners Corporation (OC) has an absolute duty to follow (comply with) in the Act is extremely limited* and as much as your agenda sounds inadequate and introducing matters to the meeting is out of order the chances of anyone (except those inside the SP) correcting the management defect is very remote.
It will only be when the non compliance has a serious affect that the compliance failure will be used as a reason to remedy whatever went wrong; then CTTT accept the failure as a defect worthy of note – it is also accepted as a significant defect if it is a way to get a case to go where a Member wants it to go.
“I accept in effect the applicant’s submission that before a decision can be made by the owners corporation whether at its general meeting or by its executive committee meeting there must be due notice.”
M Balding in Bales v The Owners Corporation SP 12303 (Strata and Community Schemes) [2009] NSWCTTT 296 (2 June 2009)The above is not a universal rule – it should be but it isn't.
Having said that your Secretary is probably just running his/her meeting as if no statutory rules exist. It is being run as if it is a meeting under common law rules in which case matters can be introduced. Interesting is that at common law there is no need for an agenda.
If you are not getting the required 72 hours then CTTT normally look at what occurred at the meeting in determining if it will void anything – they do not care if the notice was late, non existent or lacking detail unless something of consequence came from the failure.
If you are asking yourself what is the point of the Act then the question may also be considered as what is the point of those overseeing the Act.
“but so what” is unfortunately the way many non compliance's are viewed.
“So what” is arguably one of the biggest problems in strata because the rules say one thing but the actions do not match them and it does not seem to matter – “so what” are the rules?* you will never find a list of what is required and what is not required to be strictly adhered to but the “line in the sand” is always drawn by the likes of CTTT on a case to case basis – i.e. the line moves a lot so owners are kept guessing.
Hi Willie,
Jimmy reports to the Flat chatter a new resource available via the Strata Community Australia (SCA) website (formerly the Institute of Strata Title Managers).
It is a free training course for people involved inthe managment of their OC.The following relates to ECs;
As representatives of the Owners Corporation an Executive
Committee’s forum for decision making is at a duly convened meeting. Due notice must be given in accordance with the provisions of the SSM Act and accurate minutes kept of these decisions.If your issues and approvals are being handled via email without duly formed meetings then the approval may not be valid and the lack of a proper meeting is the real issue.
Fortunately there are no real strata police and you can probably get away with what you are doing even though it is not compliant as long as nothing serious comes of anything you decide or approve.
Drop by the SCA website (HERE) and have a look at the free training; it is fairly extensive and offer a good starting point for those uninitiated in strata.
struggler said:
Am curious as to how bpositive came to have out of pocket expenses due EC decisions. Doesn't the strata insurance cover decisions made by the EC? Was always concerned when on the EC that any decision made without the proper considerations would have left me liable, but thought insurance would have handled that.
There a 4 compulsory insurance (actually only 3 but to not take out workers comp is not good risk management unless an SP is 200% sure it will not need it – and then takes it out if the situation changes).
Office Bearers liability insurance is optional; requires the AGM to pass a motion for it and may not have been in place when bpositive ran into trouble compliments of EC activity.
If an OC has an EC then insurance for the EC is not an expensive policy and to be a part of an EC without it is to invite trouble.
A 40 block unit is a small strata (by strata definitions of large and small) and so there is potentially a noticeboard somewhere. I mention this because if your block is required to have a notice board under its bylaws then on the notice board should be minutes of an Executive Committee (EC) meeting which should have the names of the EC. If your building does not have the noticeboard bylaw then you should be getting sent copies of EC meeting minutes which should show who the EC are. It should also be in your Annual General Meeting minutes who was elected at the AGM.
Finding these documents should make it easier to find out who these faceless people (the EC) are, when meetings are (you can attend in person) and what decisions they are or are not making.Being on the slide is not a good thing and it can be difficult to rectify in the short (and long) term.
The usual advice involves getting the numbers to force an EGM (the support of owners who together have more than 25% of the unit entitlement) and pull off a coup and dispatching the current EC. You can find several topics on how to pull off a coup elsewhere in the forum – basically you need to have the numbers to force the meeting, pass the motions and stack the EC with “your people”.Does you current strata agreement give the strata manager the power of the EC – if it does then rolling the EC will serve little purpose but if everything being refereed to the strata manager is just a policy then a new EC can easily abandoned such a policy and reclaim control of the strata plan (within the terms of your management agreement).
Another option is to try to have your strata manager replaced but this can be slow and difficult.
If you are with a large company try going over your managers head and going to his/her superior or the licensee in charge of the company and have a chat about you dissatisfaction.
I'm sure some other flat chatters will have more ideas for you.
wombat said:
…. I have been to the CTTT on one occassion to have a compulsory manager appointed and with one of the ancilliary orders the adjudicator dealt with the validity of a number of meetings that had been held while in self management.
Two meetings were invalidated because not enough notice was given….
This i find astonishing. In one case i did the adjudicator ( a Senior Member) acknowledged that proper notice was not given but took no action because in his opinion there was still a good turn out on the day.
CTTT are such a bunch of no-account reprobates.
An SP, large, small or in-between, either needs to give proper notice or it does not and it should not be a case of how does some pompous “public servant” feel about the particular matter before him/her. These people are hopelessly inconsistent.I would agree that if a meeting is adjourned because of the number of non financial members then what is the point of the adjournment except to move to the position Jimmy points out above; i.e. where the quorum at the reconvened meeting can become those present regardless of how many that number is.
I wish you well with your quest for clarity.
Hi Urban,
The idea of a working bee is at the heart of my SP. My SP operates completely on a philosophy that volunteers will get the job done – every job.
This philosophy has meant- significant projects are still a work in progress after almost 20 years
- there is a significant list of unfinished projects not receiving attention
- there is a long list of projects that still have not commenced
- urgent matters get dealt with in what is called * time (* strata plan name withheld)
- other matters get dealt with if and when someone has the time or inclination
- some matters do not get dealt with because of who wants them dealt with
Working bees work if you are not in a hurry to get anything done but they are a good way for people to get to know their neighbors – if they show up.
If you are paying 5k in levies then i am surprised that the EC is calling a working bee – where is your money going?
We pay less than 1k per year in a large SP primarily because there is the expectation volunteers will do everything; they don't.I would not recommend relying on volunteers to do jobs that need doing around an SP. That sort of idea sets the bar pretty low for the expectation regarding appearance and the general standard of the SP. A lot of things will not get done and those who do show up are not always happy with those who do not show up. The novelty of such in-house gatherings soon wears off.
We have significant money sitting in some sinking fund categories waiting for people to volunteer to do the job; trouble is some of these jobs require know-how that most owners do not have and most volunteering work is manual labor work. Some jobs are now begining out sourced at significant expense.
“Working bees” is not a mindset you want an SP to get into because people start thinking they can get things done for “free”; they get used to not paying to have things done; things start not being done and the whole SP goes downhill until it ends up full of a clique of owners who are happy with the sad state of place because it is cheap. The SP's reputation slides and the value of the SP will decline.
The OC has an obligation regarding maintenance and repair; this obligation gets seriously compromised if an SP starts relying on the owners effort (rather than their money) to meet that obligation — and CTTT cannot be relied on to get thing back on track.Great social event for those who show up but a disaster as far as getting whats needs doing done in any sort of reasonable time-frame. That's my experience in an SP that relies on the owners doing things.
Hi Dech,
There is nothing in the Strata Act that specifically says a person or party has 12 months to have a complaint adjudicated.On the back of the older application for adjudication it says a person has 12 months after mediation to apply for adjudication. This no longer appears on the newer adjudication form and it does not appear anywhere in the Act but it is a time-frame Consumer Trader and Tenancy Tribunal (CTTT) apply to adjudication applications after mediation. That may or may not be the 12 months being referred to.
That you are getting conflicting info from Office of Fair Trading (OFT) is no surprise. I often ring a few times on the same matter just to check that different operators give consistent information; generally they do not. These people are far from experts and in some cases OFT staff could benefit from spending some time reading forums like this one. You cannot rely on what OFT tell you.
Mediation and potentially then ending up spending another $74 on adjudication.
I have done this at a $5 rate on numerous occasions and done it relating to everything from no detailed agenda to overspending a $16k budget by 50% and running up significant deficits. The list of breaches in my SP is extensive; meetings without a quorum, visitors Chairing EC meetings, failure to supply valid audits, not calculate interest properly, bogus elections, ultra vires policies, selective by-law enforcement, it goes on and on — but this is not about the failures of my SP.Every time I go to CTTT the CTTT find a way to dismiss the applications; the only thing ever acknowledged as possibly being serious was a failure to give adequate notice for an AGM but because there was a decent turn out on the day (says the adjudicator) that did not result in any action from the adjudicator.
CTTT are not the strata police. What is in the Strata Act is not a set of rules that will be enforced. The Act is more like a guide that doesn't need to be followed as long as nothing too serious is happening as a consequence of the disregard.
CTTT deal in remedy to what they perceive are serious matters. Is what you seek a remedy to a serious problem or is what you seek better management practices and compliance levels?
CTTT, potentially, could address a serious problem appropriately but consistency is not their forte. If you make an application regarding matters of the Act not being followed that really do not have any seriously detremental effect then CTTT will most likely find a way not to be seen as the strata police.
The outcome of any involvement with CTTT also depends on what is in the respondents submission. I have found that bogus people hiding under the umbrella of the EC seem not to have to prove their assertions because there is some underlying credibility to what they say because they are “the management”.
Looking at the brief detail in your post i would say save your money and try not to learn too much about the requirements of the Act because ignorance is bliss in strata and knowledge is only frustrating because the Act is mostly meaningless due to there being no genuine enforcement agency. There are very few enforced rules.
Billen Ben said:
dech said:
…….. on paper it could just appear as something innocuous sounding like “tidy garden at northern side” – which would be another breach – it's hardly a “detailed agenda” as required by the Act unless some indication of expenditure is included.
Hi Dech,
“Detailed agenda”; what a concept.
My SP has for years (about 5) had agendas that are one word or two word items. Of course this is not a detailed agenda but it gets better.……….
The agenda for the next EC meeting here has 5 items; 3 are two word items, one is a 3 word item and the other is a 4 word item. None of that matters because you can bet your life there will be introduced matters……Hi Dech,
Although this goes a little outside the garden issue and the apparent use of money by EC members to pursue what amounts to personal agendas i just though i would update you on the concept of a detailed agenda.As i state above the next EC meeting here has 5 items blah blah blah.
The meeting has been held and there were 20 introduced motions and the 5 items on the agenda did not rate a mention. (and i can't get an order to correct this, CTTT just does not care about it)If you get some innocuous sounding agenda item then think yourself lucky because at least there is a hint of what is going on.
Hi Wombat,
What the Education Officer told you is correct and there is no paradox between that and what Rio did.
Rather than attempt to convey what i need to convey i will direct you to a book called Horsley's Meetings (should be available through your local library) and refer you to the chapter on proxies after which illumination will be yours and you will understand how in some cases a meeting can have new proxies while in other cases a meeting cannot.
You already seem to know the answer though –if a constitution or standing orders etc allow for new proxies then they are allowed and the common law position is no longer the standard. In the case of a strata meeting there are no provisions in the law relating to the matter so the common law position prevails.
dech said:
…….. on paper it could just appear as something innocuous sounding like “tidy garden at northern side” – which would be another breach – it's hardly a “detailed agenda” as required by the Act unless some indication of expenditure is included.
Hi Dech,
“Detailed agenda”; what a concept.
My SP has for years (about 5) had agendas that are one word or two word items. Of course this is not a detailed agenda but it gets better.The EC will have say 5 or 6, one or two word, items on the agenda and none of that will get dealt with at the meeting and instead 5 or 6 motions will get introduced and the first things owners know about anything is a set of EC minutes a week or so later; with a similar agenda for the next meeting. It has been going on for years.
It has all been to CTTT, twice, CTTT was sent 3 years worth of EC minutes as evidence and the end result was dismissal.
“Tidy garden at northern side”; that is 5 words and more detail than owners here get and it wouldn't matter if owners here did get 5 word agenda items because the agenda is not the business of the meeting in this SP.
The agenda for the next EC meeting here has 5 items; 3 are two word items, one is a 3 word item and the other is a 4 word item. None of that matters because you can bet your life there will be introduced matters. A recent meeting made 5 resolutions and not one was from an agenda item; the agenda might as well have been a blank piece of paper.
Send enough applications to CTTT and you will learn nobody at CTTT really cares about what is in the Act. Is your SP seriously dysfunctional is all that matters and not getting a detailed agenda and the EC blowing a few grand on self serving gardening are hardly matters that warrant action from our inept strata overlords.
Our admin fund has gone into deficit for the last 2 years. The first time wasn’t so bad because the deficit reflected uncollected levies and there was no loss of equity but the second year saw many thousands wiped from the equity of the SP* due to some significant overspending.
There is no genuine separation between our admin fund and sinking fund; it is all just money in the bank. There was no short term transfer of money from one fund to the other to cover the overspending that led to the deficit and it is unlikely the treasurer was even aware of growing deficit.
The deficit only became “public” knowledge, 8 or so weeks, after the annual audit. The AGM then inappropriately amended a motion to transfer the deficit amount from the sinking fund to the admin fund. This was not some short term transfer to pay bills – the bills had already been paid. The purpose of the provisions in the Act are to allow an SP to pay money, that a fund does not have, from the other fund and then recover it via a special levy. In our case nothing was recovered and nothing will get recovered.
I would go on but the details are irrelevant; the moral to the story is CTTT** did not care about the poor financial management of my SP when some of the issues were highlighted in a s162*** application.
I am aware of what the Act says in relation to financial management and my SP has no regard for any of it and there is no recourse until things get very dire. Even after my SP lost a significant amount of money through poor planning and hopeless compliance to the Act, CTTT were happy to leave the management in the hands of the inept ones who “manage” the SP.
If you have concerns about your SPs financial situation then you need to pull off a coup and move forward from there. Remember there are no strata police unless things are getting very dire.
[For the uninitiated …
* SP = Strata Plan – meaning the building or the complex.
** CTTT = Consumer Trader and Tenancy Tribunal … the strata 'court' where you go (after you've had no joy at Fair Trading)
***S162 – Section 162 is the part of the strata Act that allows the CTTT to appoint a strata manager to take over all the functions of the owners corporation and executive committee. – JT]QRH said:
Our strata plan currently has a 95% default rate on levies…. Only several members of the EC are currently financial…
But this has been complicated because (under a lease agreement) the Admin levies are supposed to be paid by a tenant (a serviced apartment operator) who leases all lots in the estate…. and is refusing to pay. This is resulting in extensive Supreme Court action which is costing everyone….
Of course levies are ultimately the responsibility of each lot owner and as the OC has no contractual relationship with the lot owners’ tenant – the OC are pursuing individual lot owners for the levies – using a strata collection service.
But it IS a nightmare and the OC are financially paralysed as a result.
Hi QRH:
Ninety five percent is very impressive. An interesting situation and i would agree that ultimately the levies are the responsibility of the unit owners. Has CTTT been involved and if so what was the outcome?I’m not surprised your OC is paralyzed.
We are far from paralyzed but it is not a healthy situation to be carrying a significant amount of other people.
Keep us posted on how things progress.dech said:
…… With a view to getting some attention from the docile members among the owners is it reasonable and non-defamatory to refer to this as mis-appropriation of funds?
An addition question is – could the secretary refuse to include an agenda item for the AGM to the effect that EC nominees should demonstrate that they understand at least three of the basic functions/limitations of an EC ……
FROM: https://www.legal-explanations.com/definitions/misappropriation.htm
(n) Misappropriation is the wrong application or utilization of funds allocated for any specific purposes, by illegally diverting the money, forging the documents or otherwise misleading the beneficiaries and owners of the fund. Misappropriation is a felony crime punishable by imprisonment.In a cetrain context the term misappropriate is applicable but it is not a recommended term as people get a little touchy once such terms start getting thrown about. Perhaps using a phrase such as “wrong application or utilization of funds that were allocated for another specific purpose” is better wording; it means the same thing but does not compromise an individuals character as the harshness of saying misappropriate.
Clause 36 of Schedule 2 of the SSMA relaters to requesting motions be put on an agenda.
cl 36 (2) The secretary must give effect to the requirement of the notice.
In English; if you make a requisition for a motion to be included then the motion gets included – and i believe that means regardless of the content of the motion unless the motion has the potential to see the OC sued.
If the motion has defects or issues then it becomes a matter for the Chair to deal with on the day of the meeting and it is would be up to the Chair of the meeting to determine if the motion gets put to the meeting.
Our AGM agendas often get used as a opportunity to make a statement by people who include such motions as having a minutes silence for the apathetic who do not come to AGMs. Most of these “statement motions” are withdrawn when they come up but they get included because they are required to be included.
The motion you elude to should be on the agenda if you request it but would be one that possibly should not be put to the meeting. The Act sets out the requirements to become an EC member and showing an understanding of any strata knowledge is not one of the requirements.
I do not believe you could deny a person a nomination for an EC position, or an EC position, because they can't answer the “riddles three”.
I would add to the above that no one should expect CTTT to put their house in order if things are not as they should be. I'm not saying do not use CTTT but if you do use CTTT then do not have any expectation of the Act being applied or an outcome that corrects poor management practices. CTTT are not the strata police.
Phil T said:
…….
Firstly, a large number of the 120 (!) pages are apparently unreadable, so he's had to go back and request a readable copy. (Are strata reports normally that large – I would normally expect a 30-odd page report. There are 80 units in this strata).
Next, of those readable pages, the solicitor has pointed out that it looks like the admin fund may be tens of thousands in debit, yet the sinking fund is about 150K in credit.
…..
–Phil.Hi Phil,
The report does sound rather large and you are more on the money expecting about 30 pages, or less. One thing i have noticed is that different people / companies give a different amount of detail in their strata reports. As important as shopping around for the property you think is a good buy is shopping around for a strata inspector who offers a quality report at a good price.The admin fund being in deficit and a sinking fund with good credit reminds me of home, the deficit is a big red warning light as there will be some management issues behind the cause. My SP ran a deficit in the admin fund for two years straight with a loss of equity being the end result. Following those two years it is now the highest levy ever and the hole in the admin fund was plugged by transfering money from the sinking fund to the hole. The dent put in the sinking fund will not be addressed; robbing Peter to pay Paul. We still have poor financial management.
Perhaps your time is better spent looking at property with a better management than looking into the issues with this particular property but Jimmy gives some nice advice as you can get some real bargains on the upswing, you just need to be sure that the upswing has started — that will take time so one decision seems to be where is your time best spent.