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  • #8204
    Brandy
    Flatchatter

      At our recent AGM the Strata Manager (SM), acting as chairperson, expressed the opinion that our recent by-laws amendment costing over $500 to register (including lodgement fee $99.50 plus solicitor’s fee) is “not worth the paper it’s writtn on.” The inference being that any by-law is not worth the paper it’s written on.

      All owners were quite alarmed by this.

      What is the position of by-laws if they are not able to be defended?

      Was SM correct in such a statement?

    Viewing 7 replies - 1 through 7 (of 7 total)
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    • #15726
      Jimmy-T
      Keymaster

        If the strata manager means the by-law wasn’t properly formulated, then that’s an issue you have to take up with the lawyer who wrote it. If the by-law contravenes another law and is therefore invalid, then that should be taken up with the lawyer who wrote it too. But if the SM is just being cynical about by-laws in general and difficulties in enforcing them, he or she needs to step up and offer more constructive help than a blanket disparagement.

        The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
        #15730
        Cosmo
        Flatchatter

          Our OC has an issue as to whether a bylaw we are proposing would be invalid because it could be seen as contraveing the Strata Schemes Managment Act. We are a small OC and feel that with the added responisbilities and potential legal liabilities on Executive Committee members we would like to compel all members of the OC to also be members of the EC.

           

          Occassionally owners not on the EC will state that a certain item of maintenance needs to be done. Sometimes the OC does not have the funds but the owners not on the EC willl not endorse a special levy to get the maintenance done. It was then pointed out that if the maintenance is not done and someone sued  because of this lack of maintenance, it would be the EC members and not the OC members who would be sued.

           

          The SSMA 1996 just says that (at s16) “An owners corporation must appoint an executive committee of the owners corporation in accordance with this Division”.

           

          If we were to pass a bylaw to the effect that ‘all members of the OC are also members of the EC’ would that be a valid bylaw? Or can anyone see a problem with this?

          #15733
          Jimmy-T
          Keymaster

            You can’t force people to join the EC but in any case I think you may be approaching this the wrong way round. 

            The Owners Corporation is a superior body to the EC.  Every owner is a member of the OC whether they want to be or not.  Al;so, they are responsible, without limitation, for decisions that are made by the OC, whether or not they participated in that decision. 

            EC members, however, may be insured against any unfortunate decisions made in good faith.

            So, for instance, if the majority of owners refuse to pay special levies for maintenance, they will still have to pay when the repairs are essential, or if an individual owners sues to have repairs done or, worst case, someone is injured or their property is damaged as a result of lack of proper maintenance of common property.

            I’d be on the EC just to protect myself when things go pear-shaped, as they inevitably will.

            The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
            #15737
            Sir Humphrey
            Strataguru

              My understanding is that if you can’t form an EC (say nobody accepts nomination) the entire OC becomes the EC and a general meeting is required to make any decision. I imagine that might not be completely ridiculous in a sufficiently small OC. 

              #15748
              Cosmo
              Flatchatter

                I think Jimmy T’s reply went to heart of the issue when he said “Every owner is a member of the OC whether they want to be or not. Also, they are responsible, without limitation, for decisions that are made by the OC, whether or not they participated in that decision. The dept of fair trading web site at https://www.fairtrading.nsw.gov.au/Tenants_and_home_owners/Strata_schemes/The_owners_corporation/Executive_committee_of_the_owners_corporation.html says under ‘Effect of decisions’ – “Any decision made by the executive committee is treated as a decision of the owners corporation …. No individual executive committee member can make a decision for the owners corporation. In the event of a dispute between the owners corporation and its executive committee, the decision of the owners corporation prevails.” The relevant provisions appears to be sections 16 to 21 of the Strata Schemes Management Act 1996.

                I was under the mistaken understanding that it is the EC members and not the OC members who could be sued if maintenance was not carried out.

                There is, in practice, always a debate about whether maintenance is essential and urgent.  Some members saying it is and some saying it is not. As long as our EC can say if we get sued ALL Owners Corporation members get sued together I feel we are on much safer ground and non EC member of the OC will take issues more seriously.

                While PeterC said “if you can’t form an EC” and Jimmy said “You can’t force people to join the EC” I still think having a bylaw (for a OC of less than 9) compelling all OC members to be EC members is an interesting concept and not prohibited by, or contrary to, any legislation. The advantage of having such a bylaw is that it avoids disputes, discussions and discretions re the composition and liabilities of EC members as opposed to OC members.

                #15756
                scotlandx
                Strataguru

                  I don’t believe you can compel owners to be members of the EC for a number of reasons, one being that the first step under the legislation is to be nominated, either the owner nominating themselves or someone else nominating them.  In the latter case, the person being nominated can simply refuse the nomination.

                  Setting that aside, providing that everyone is a member of the EC could come back to bite you.  For example if you have a scheme of 6 owners and only two people are willing to be on the EC, and the 4 other owners are somehow considered to be part of the EC, then the size of the EC would be 6.  If the EC wanted to make a decision, you would need a quorum of 3 or more for any decisions to be made by the EC.  If the 4 other owners refused to co-operate, you would not get that quorum.

                  #15759
                  Jimmy-T
                  Keymaster

                    I’d just like to add to what Scotlandx has said, if you end up having to make all your decisions by General Meeting, at least there is provision under the Act to reconvene the meeting if it isn’t quorate.
                    Realistically, communication is the answer and if people choose not to read agendas, minutes or any briefing notes you send out, that’s their problem if decisions are made that they don’t like.

                    The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
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