[Tombo]

Hmm.  One other point though.

 

Gazumping an incumbent EC is a once in a lifetime opportunity… They aren’t prepared for it so won’t prepare for it.  But if you try and fail, you’ll never get the chance again.

 

Getting 75% of owners to back you for an EC spill mid year is often difficult though, and you may be better off holding your cards close to your chest and waiting for the next AGM, when you don’t have to put forward a motion in advance, since voting the new EC in is done every year.

 

At that AGM, you are looking to control 2 things: how many people are allowed on the EC (max is 9) and who is actually elected to the EC.

 

You may find that you don’t have the support to outvote the existing EC members, so then you focus on boosting the EC numbers to 6, 7 or 8 and fill the extra slots with people who support you, that way you can effectively control the voting at the ECM’s anyway.  😉

 

That’s exactly a friend of mine did with their Strata plan last year, and the 2 poor old people on the EC from the last 10 years who had manipulated things somewhat and driven roughshod over the owners, still got onto the EC again… but didn’t realise what had truly happened until they started to lose every single motion that they put forward…

 

It’s all a numbers game.

 

Hope that helps

[Tombo]

@Billen Ben said:
The OC could always pass a by-law to protect the EC.

This is the worst by-law my SP has.

CLAUSE 22    Indemnities

THAT every member for the time being of the Executive Committee of the owners corporation shall be indemnified by the owners corporation out of its funds and assets against personal liability for the acts, receipts, neglects or defaults of any other member of the Executive Committee or of any managing agent or for any loss or liability occasioned to the owners corporation by any error of judgement or oversight on his part or for any loss, damage or misfortune whatever which shall happen during the course of the execution of the duties of his office or in relation thereto AND shall be further indemnified in similar manner against any liability incurred by him in defending any proceedings, whether criminal or civil, in respect of any such act, receipt, neglect, default, error or oversight to the extent that Effective office bearers indemnity insurance covers members of the executive committee of SP*****.

 

I think that there is a layering of laws here… Like a deck of cards, with the upper cards taking precedence.  Anything written in a by-law means diddly squat if a council law overules it.  Likewise, state law (the NSW strata management Act for exampe) trumps council law, federal trumps state and common trumps federal.

 

(I might be mixing up a couple of them)

 

Either way, no by-law means anything if common law says that if you knew that something was dangerous, had an obligation to address it as an EC member and did nothing… you are accountable, and can go to prison for it!  Your owners should be made aware of that, or you should at least be getting your requests for axction minuted in ECM’s so that you are in the clear?

 

And maybe you should be showing them the exclusion clauses in your insurance policies to cement the info in their minds.  Get that minuted as well, clearly explaining that they are personally accountable if they breach OH&S/SMA/Common law rulings and laws… Once that is minuted and documented, you may see a miraculous change of attitude… It happened with our EC when I pointed out that if they proceeded with their lack of action on a safety issue, and an accident ensued resulting in a $5 million law suit, that they would be both uninsured and held personally liable for the suit…

[Tombo]

Hi there.

 

We’re dealing with this kind of issue at the moment, so I’ll tell you what I’ve learned.

 

In NSW (where we are), the SMA says that the OC has an obligation to maintain common property to a safe standard. (Only common property though).

 

If they are aware of a problem, and don’t address it and there is subsequently an accident… then they can be held both accountable and liable if someone sues because they can be deemed to be in breach of their duty of care under the SMA.

 

The situation then arises where the OC could then acuse the EC of failure in their duty of care to ensure a safe environment and “pass the buck” so to speak, making the EC personally accountable.

 

Now, that is what the EC’s professional inemnity and public liability insurance is for, but our SM tells us that if there is a breach in our duty of care… the insurance company may not pay up, at least not in full, because we’ve broken the SMA.

The next question is… what is a safe standard?  How do we know what’s safe?

Well… we have no idea, so every couple of years we have an OH&S assessment done on the common property of the building and then implement those recomendations.  It gets confusing, because most OH&S inspections are done on commercial properties, and residential properties are actually exempt from most of the OH&S legislation (gazetted in 2007) since they have to abide by the rules in the SMA, which are very similar – Workcover saw this as duplication.

 

So we’re reallly using the OH&S report to determine what’s not safe and then dealking with those issues so that we;

1. comply with our obligations to maintain a safe environment under the SMA
2. so that our insurance is valid. 

 

We’re also implementing the OH&S recomendations becasue if we have tradesmen in the building… technically it becomes a place of work, and we need to comply with the OH&S legislations becasue of that.

 

Either way, the safest approach to protect the EC members from personal liability is:

1. Always run meetings properly and only make decisions through the approved processes under the SMA (don’t take shortcuts) that way you’re protected from the rest of the OC
2. Have an OH&S inspection yearly or bi yearly, and implement any recomendations regarding common property
3. Make sure that your insurance dues are paid up
4. Each time you make a decision to do something (or not do something) put yourself in the insurers shoes and ask yourself; “does this demonstrate a breach of the SMA or a failure in duty of care meaning we don’t have to pay up?”.

Hope that helps.

[Author]

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