Hi Jimmy, thanks for sharing this. You have obviously put a lot of time, effort and thought into your reply. It has inspired me to make comments just for consideration, the comments probably relate to my circumstances. To let you know where I am coming from: our scheme is small, with funds of less than $10,000 and we struggle to put together an EC.
Point 1. Should the law distinguish more between different schemes based on size, usage, type of construction or other reasons? If so, how?
First I like the idea of having three category sizes: small; medium; and large.
Point 4. To what extent should the Government prescribe rules for all schemes?
I agree that a standard set needs to be available or apply by default. A ‘Mission Statement’ could of course refer to other features but it should only be mandatory when it highlights bylaws and common property definitions that are not standard.
Point 6. Is there merit in the mission statement idea?
Yes. A ‘Mission Statement’ should be mandatory for a scheme where that scheme diverges from standard by laws or the standard definition of ‘common property’ does not apply.
Point 8. Are reforms needed to address the competing interests of stakeholders? If so, what should they be?
I don’t think non-resident owners should be prohibited from serving as many have much to offer. I think the 20% additional weighting for resident owners is good and should be enough.
Point 12 Calling for committee nominations in advance of AGMs.
Should be mandatory
Allowing payments to be made to committee members for attending Meetings.
Yes but payment should be limited by reference to levys eg for each attendance 5% of quarterly levy and ratified by AGM.
Point 14. requiring minutes of meetings to be made available within a specified time after the meeting (e.g. 14 days).
Must be mandatory. Currently at our scheme they read the minutes out at the next AGM, and no one even remembers what was said so no one objects. I would suggest ‘Draft’ minutes within 21 days. With the added provision that where anyone requests changes to the minutes that if the changes aren’t made, it must be noted in the final minutes that the request was made and by whom it was made.
Point 16. imposing a minimum number of committee members (e.g. three).
Good idea, agree. Two for a small scheme, and then as suggested prorating this up for the number of lot owners.
• limiting the period of time any individual can continually hold the same office (i.e. Chairperson, Secretary or Treasurer)
This provisions should not automatically apply to small (less than 29) schemes.
17. Do you have any other suggestions for improving transparency within strata and community schemes?
Draft minutes to be circulated within 21 days. If no requests for amendment/alteration these automatically become final. Final minutes with (with any unactioned requests for amendment/alteration noted) within 28 days.
38. Should more flexibility be given to schemes to determine levies other than on the basis of unit entitlements?
Yes but safeguards must apply. This must require a 100% yes vote in which all lot owners must vote (a lot owner could vote informal) but they must all vote (just for clarity including those affected).
41. Should the law require periodic levy notices to be issued?
Yes. However as is presently the case an owner must be liable even if no notice is issued as it would be a travesty is some avoided liability just because someone forgot to send out a notice.
54. Should sinking funds remain compulsory? Should schemes be able to carry forward budget surpluses instead?
Sinking funds should be compulsory as it is a good guide. Whether you have ‘carry forward’ or another it is all a planning tool.
55. Should the law dictate contributions to sinking funds? If so, how?
If the law is to dictate it must be by reference to the 10 years sinking fund plans. Levys and loans must be adequate to ensure that forecast expenditures over the next 5 years can be met. A scheme could still borrow too much and ‘go under’ but I don’t see viable alternatives.
56. Have the 10 year sinking fund plan reforms been successful?
As far as our small scheme is concerned an overwhelming yes!
64. How do the laws around accounting records need to be modernised (if at all)?
For small schemes the current ones are sufficient, increasing or changing requirements could detract and over complicate.