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Scotlandx is correct. I researched this for our OC a while ago. Refer here:
If clicking on link doesn’t work try copying and pasting into browser.
Or Google:
Does your balcony balustrade meet the current Building Codes? Body Corporate Manager’s Newletter No. 11 Vol. 4
The OC didn’t open a new bank account.
Our strata opened a business account with the Newcastle Permanent a long time ago. It just approached the Newcastle Permanent and asked if we could move to electronic transfers and what was involved. The features they could offered us we more than adequate.
For a business account I would imagine signatories changes all the time as people leave a business.
Hi VicRes, Our OC went electronic a few years ago. It had a lot of benefits previously we had to run around and get two signatures on checks and statements were only really available to the Treasurer.
Here are the features that the bank was able to easily set up:
First there the account had two sub accounts; 1) an on call account for payment of ongoing maintenance. 2) the other a high yielding interest account for one off capital type projects. These roughly equal the maintenance and sinking funds but we occasionally transfer between them.
We don’t ask the treasurer or owners (when they pay fees to pay sinking and maintenance into the different accounts as that would add an extra layer of complexity. In NSW the legislation doesn’t require ‘separate accounts’ just ‘separate accounting’ for each so once a year when the accounts are prepared for the AGM we account and say how much belongs to each fund.
The bank account allows electronic payments via bpay, EFT etc. The accounts are set up so that certain Owners have access to initiate and and authorise payments. Every payment from an account requires two electronic signatures from different authorised Owners. Importantly, every owner can at any time: view the balances and transactions; and pay their fees in.
Scotlandx, the legislation you refer to applies to “private conversations”. Are you sure it applies to OC meetings that are very much open?
That piece of legislation, if I recall correctly, was introduced to stop the secret recording of things such as telephone conversations and talks between individuals where one of the parties did not know of the recording.
In the case of OC meetings I am suggesting that everyone knows it is being recorded but only a majority has voted for it to be.
My view is that as long as the majority of owners agree it would be ok.
Fey and Erte, as LP has pointed out you are well within your rights to seek out alternates quotes etc. What I have learnt from experience in like matters is don’t tilt at windmills by yourself.
By this I mean talk to as many other owners as you can and get to know those that are of a like mind. The amount of support you have for any issue is crucial. Point out to others what you are trying to achieve.
For example point out that:
the painting needs doing or it will cost us more later!
I got a quote from a tradie that is 30% than the one the SM got us, why are accepting higher quotes?
I absolutely agree with the reply by ScotlandX. We had an owner demand we get an engineer out to inspect one of their walls as they were scared that recent rains had weakened it. We refused. I inspected the wall and there was no identifiable damage/weakness. The owner threatened to sue if anything did happen.
I believe it comes down to a reasonableness test. The OC in the absence of evidence to the contrary is entitled to accept things are sound. Contrast this with a situation were the OC should have known eg., a repair to a balcony that left the balcony weakened and not up to current building standards.
Danih, unless there is an obvious defect it is not up to the OC to do stuff ‘just in case’.
A cynical warning against telling her to get her own investigation/report. My experience is that if you are paying it is not difficult to get a report to identify ‘potential’ defects.
bangles,
You ask: “Insurance Companies do not pay commissions to Owners Corporations and if it did not go to SM it was retained by Insurance Company. Is this correct? ”
Technically I think that is correct. The insurance charged to the strata would be the same even if it arranged it itself. Our strata goes through an insurance broker and they get our trailing commission. We would pay the same price with or without the broker.
In my view what the strata should be looking at is what does SM charge otherwise for what they do. The trailing commission is money in the SM’s pocket. The strata should be looking at the other fees the SM gets and adding the trailing commission. If they believe that when added together the SM is over rewarded then the strata should (at the appropriate time eg when the SM’s contract is up for renewal) negotiate on the SM’s other charges/duties.
Our insurance broker adds an extra layer of security in case of the insurance company going under. Also the insurance broker does all our negotiation with the insurance company, this has resulted in us getting our payouts on two occasions when the insurance company were trying to deny payment.
As with anything is all about the overall value you get!
My experiences are that for small stratas (my experiences are of around 7 lots) there are only slight differences between the practical everyday obligations of strata and maintaining a house or a few cars. Yet how many owners undergo formal training to do this?
At a 6 owner strata I was involved in one owner wanted to engage a ‘risk management’ engineer to come out and do a report. His major concern being legal liability. I argued that if owners kept their eyes open and used common sense we were not at any more exposure than a diligent single home owner. Anyway the owner put enough of a scare into the others that we spent $5900 on a report that highlighted not one major current fault but nit picked all sorts of immaterial potential faults (but we got a very impressive glossy brochure).
The same owner convinced the owners corporation that engaging a professional Strata Manager was the only way to ensure strict compliance under the laws. This resulted in our levys increasing by 120% but not thing improving either administratively or in terms of the maintenance of the property.
I am not arguing that certification of owners and engaging professionals should never be done. Keeping of accounts and paperwork etc need doing but it is not that difficult eg we have a bank account that every owner can view but requires two owners authorisations to do a transaction. However there seems to be an attitude for strata that engaging a professional negates the obligation of owners to be honest, transparent and take a bit of responsibility.
Jimmy, I think you hit the nail on the head when you said ” the argument has always been that it’s hard enough to get unqualified people to stand for committees, without expecting them to turn up at evening classes and get a piece of paper with their name inscribed on it. “
Especially for small stratas it is not so much of formal qualifications as people not being transparent and following common sense and courtesy (not being so common these days).
Do we need a cutoff like the old definition of a small strata (it used to me from memory less than a 100 owners)? I would say 50 would be better.
Ziggy, remember to have the evidence or any action will fail and possibly backfire. Keep emails, records of phone calls, supporting evidence from witnesses etc will all be helpful to any case you may bring.
@Flame Tree said:
Agree, yes our AGM is upcoming so was going to Motion for a review of cost/benefit for all contractors. But with all the other things I feel needing redress unsure how to go about it without overwhelming folk or looking bad myself. Thinking I’ll shoot Motions for a few things I just can’t stand and seek to address the others that may just first require reasonable if robust negotiation. Certainly a learning experience but the pain of not acting is now more than the pain of acting to get things addressed. Of course failed to pass Motions also then would become problematic if they are genuine in nature. Hmm.I think waiting till the AGM will bring about the sort of things mentioned by Jimmy. You need to find a few like minded owners before the AGM. Talk to them about the concerns you have. Listen to their ideas you might be surprised.
If this happened in my strata I would have major concerns in terms of transparency.
The OC has a right to know the exact details of each and every deal and cash flow from its funds. Have these been laid out?.
I have no problem with members/owners doing work and being fairly remunerated. In many instances owners/members do unpaid/voluntary work for strata but this still needs to be transparent.
Does the Committee chair have any relationship with the management company, does the chair receive any benefits that are not disclosed? Why do they ‘informally’ agree surely the OC have a right and obligation to know (and approve) the details of this informal agreement.
Your strata may be getting a great deal and everything is honest and fairly worked out. On the other hand there maybe all sorts of underhanded deals and kickbacks going on.
If the OC makes enquiries it needs to be careful to put anyone offside or accuse them. Indeed once the details are know the chair may be shown to be a great chair working diligently and saving the OC money.
It is all up to the council approval process. Our strata has just gone thru this with a nearby development.
The owner of the area wishing to build the townhouses will have to submit documents to council for approval. We had to ensure as many people affected by the development made submissions raising any issues they had with the proposed development. In your submission you can raise undertakings or changes that need to be made to alleviate problems.
If no one raises issues/concerns the council will just rubber stamp the development. Contact your council to find out relevant dates to comment.
Thanks Lady Penelope, a very well explained and logical answer!