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21/11/2012 at 1:27 pm #8567
Who chairs an AGM when both the strata manager & EC chair are present & what are the relevant rules and/or regulations?
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21/11/2012 at 3:00 pm #17212
The NSW strata Act says the Chair must always chair the meeting if they are present. However, the Strata manager is also, technically, a back-up chairman and has the capacity to act as the chair in the Chairman’s absence or if they have recused themselves either because of a possible conflict of interest or a simply as not being particularly good at managing a roomful of people. In these circumstances, it’s customary for the chair to propose that the Strata Manager take over and for that to be voted on as a formality. However, if push comes to shove, the chairman or chairwoman has the legal right to chair the meeting.
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.
21/11/2012 at 3:26 pm #17213Many thanks JimmyT. Now I have another question. Our AGM is due on the 24th & the agenda includes my motion to remove the strata managers. The minutes of the past two AGMs are signed by the strata manager junior as the chairman, although there is no mention of the passing of the baton to him by the EC chairman in the aforementioned minutes. I had a phone call from the junior (after sending my agenda item by registered mail & e-mail) to get together & negotiate, which I refused. I am now told by one of the owners that the papa bear himself is going to attend this year & will chair the AGM, which sounds very irregular to me, since he can shut me up altogether if he limits the discussion to 60 seconds or something similar. What say you JimmyT & the other knowledgeable Forum regulars? By the way, this is my first ever AGM.
22/11/2012 at 10:46 am #17219No – the strata manager cannot just decide to chair the meeting, it is up to the owners. As a starting point the Chair of the owners corporation chairs the meeting, if they feel that they can’t or don’t want to for whatever reason then they can ask someone else to do it (it can be another owner), and the owners then have to agree.
This is a reflection of a more general issue with some strata managers – it is not their scheme, the scheme belongs to the owners. The strata manager is employed by the owners to do certain things, and the owners set the boundaries. This needs to be made clear – in some cases there is a conflict of interest, such as when the owners corporation may wish to change the strata manager, and in such a case why would you have the party who has an interest in the outcome presiding over the discussion?
Similarly, it is not acceptable for a strata manager to cherry pick agenda items for the AGM, which does occur. If an owner puts up a valid agenda item, then the strata manager must put it on the agenda.
Who is the current Chair of your scheme? If you haven’t already spoken to them, are they aware you are putting up this agenda item?
In relation to the junior strata manager signing the minutes of the last two meetings, it is irregular, the actual Chair should have signed them, but as long as the owners resolved the minutes were true and correct it is not a major issue. Note the owners can resolve that the manager sign the minutes.
22/11/2012 at 12:52 pm #17223During five years in the chair of my scheme, I did chair meetings but was always aware of the difficulty in that I was also in the position of speaking to most matters before the Executive and, in many cases, leading the discussion. It was hard to do.
My successor has elected to delegate the formal chairing of the meeting to the Managing Agent (who does the job with efficiency born of training and experience) but he still leads the discussion on most items and takes an active and constructive part in our deliberations. I think there could be scope in the Act or Regulations to formalise such an arrangement – always on a mutually agreed basis.
22/11/2012 at 1:06 pm #17225Many thanks to you too scotlandx. Your reply confirms my ideas. While I’m new to strata affairs, I have been a fan of this forum for sometime through SMH & of course I have been doing some reading since we bought this house last year. My impression of our strata managing company is that it acts as though it employs us & I have personally found them very offhand during phone conversations. My readings of both the relevant act & this forum lead me to believe the SM carries out the clerical duties reasonably well, but is uninformative, uninterested & frequently unresponsive. It also seems to foster disharmony, which is probably intended to keep the owners uninvolved, allowing it to control the complex without any pesky interruptions by the owners (read “supplicants”).
Meanwhile, the AGM notices & yearly accounts etc have been issued appropriately, although in half A4 size booklet form, with the resultant print in a rather small size (in a complex with a large proportion of retirees). For those who might be interested, I will post again after the AGM. Wish me luck.
22/11/2012 at 5:47 pm #17228AnonymousThis quote from Daphne sums up what I think but haven’t been able to express. It’s the complete ball game:
“””My readings of both the relevant act & this forum lead me to believe the SM carries out the clerical duties reasonably well, but is uninformative, uninterested & frequently unresponsive. It also seems to foster disharmony, which is probably intended to keep the owners uninvolved, allowing it to control the complex without any pesky interruptions by the owners (read “supplicants”).”””23/11/2012 at 10:27 am #17231Thank you Blue Swimmer. I was afraid of being paranoid.
23/11/2012 at 6:22 pm #17232Daphne – regarding your Motion to remove the Strata Manager, remember that any Owners who submit proxies must specifically indicate their instruction (to their appointee) with regard to that Motion. Furthermore, most Strata Management Agreements stipulate that an Owners Corporation (O/C) must provide its Strata Manager with three (3) months written notice of its decision to terminate that Agreement.
The only exception to that period of notice is in circumstances where the Strata Manager has been negligent, but even then the O/C has to give them a period of time to rectify that (usually 28 days) before then deciding (or not) to put a Motion to terminate the Agreement before a General Meeting.
So if the Secretary of the Executive Committee hasn’t informed the Strata Manager of any allegations of negligence or non compliance with the terms of the Agreement prior to your Motion being discussed, and that Strata Manager wants to play hardball, then you may find termination a difficult task.
You still have a few days before your AGM, so perhaps take your Strata Manager up on their offer to talk – even if you don’t accept whatever it is they say, and try to obtain a copy of the Agreement; forewarned etc.
ps. 1930hrs Oops…just realised that your General Meeting’s tomorrow; us retirees do loose track of the date. Sorry, and again….good luck!
23/11/2012 at 7:04 pm #17233Very informative dear StrataGuru & I thank you. However, my agenda item merely mentions discussion to remove them for unresponsiveness, the rest to be discussed at the AGM, which is tomorrow at 8.30 am. In any case, our AGMs are apparently badly attended, with the SM turning up at the meeting with a number of proxies. Unfortunately, he will not be able to use those proxies on the subject unless they state their position clearly. A very good example of their behaviour is an $11,000, single line quote to install something in the complex from a construction company. “What sort of quote is that?” you might ask in my place. Or, you might even ask “who are these people when they’re at home; this is not a quote, this is an invoice for proposed non-essential, non-emergency work?”. Failing that, you might ask “why only one so called quote; where are at least two others to allow a comparison for the proposed expenditure of such a sum?”. Please let me know what you think. I’ll be around until late tonight.
28/11/2012 at 6:23 pm #17259Our AGM was so well attended, apparently we broke our own records. However, they were apparently there to maintain the status quo & left me in no doubt of it. I did manage to get him (SM) to say his percentage of our insurance & that it is included in the premium we pay. The minutes arrived yesterday with no mention of the above, except for his usual admission that he takes a commission from our insurer. I mean to challenge him on that point & insist on reissued minutes with the proper amendment. I have not yet seen his contract (my written request in early October went unanswered), although the comments & the atmosphere at the AGM seemed to indicate he has what amounts to a power of attorney from the OC.
Any comments and/or advice anyone? By the way dear StrataGuru, everyday is Sunday to me & my beloved too.
28/11/2012 at 10:15 pm #17260Strata managers receiving commissions on insurance is pretty much standard and is dealt with in the contract. Is there something about this that bothers you specifically?
Have you asked the secretary of the EC for the contract?29/11/2012 at 11:46 am #17266I know about the SM commissions on strata insurance being standard business practice. The extent of it however, seems to be -at least with him- something of a secret. I see no reason why we, the OC, shouldn’t know how much we’re paying him. His ordinary fee & related expenses are in the published accounts. We pay the insurance & he takes a cut of it. That is also what we pay him in the form of fees. Non? As for acquiring a copy of his contract from the EC secretary, the AGM minutes list only the office bearers, not their positions. 2011 & 2010 minutes are the same. He appears to have all positions & I noted his unchallenged chairmanship at the AGM with great interest. His secretiveness is what really concerns me. No business that is above board should be giving its clients the run around in this way. Non?
29/11/2012 at 4:00 pm #17270How it works is a bit complicated, but generally, the insurance broker pays a commission to the strata manager. I believe this is capped at 20%, if that is wrong someone feel free to correct me. Apparently this commission is funded out of the fee that would be payable to the insurance broker, so in that sense the OC is not paying the commission (although obviously it is built into the price of the premium). Within the ambit of fees that the OC is paying the strata manager, this wouldn’t need to be disclosed in the accounts.
If a strata manager is to receive a commission this must be disclosed in the strata management agreement.
This is assuming you are using an insurance broker, this applies in most cases, apparently they get better deals. An OC can arrange insurance directly but this doesn’t mean it will get a discount reflecting non-payment of a commission.
Strata managers argue that if they didn’t receive this commission then their strata management fees would be higher, and that is likely, generally strata management fees are not that substantial by themselves.
I am not an apologist for either strata managers or insurance companies, but personally the commission doesn’t really bother me.
It is reasonable for you to ask how much the commission is, i.e. the percentage, at least so you know that it is under the cap.
You seem to have a much broader problem, in that your strata manager has far too much control of the OC generally. From what you have said, the OC has delegated office bearer responsibility to the strata manager, is that right? At the AGM did you volunteer to be on the EC and be secretary or Chair?
The AGM minutes should note who was elected to be Chair, Secretary and Treasurer and owners have a right to know who these people are.
30/11/2012 at 12:06 pm #17277Thank you once again scotlandx. As I said previously, the AGM minutes only show the EC members. According to the EC member who told me they didn’t have the SM’s contract (I don’t think he’s ever seen it), they found having specific positions too difficult in the past & decided not to have them. At the meeting, I proposed 8 members, 7 people nominated & all were elected unopposed. My husband & I did not nominate because we intend to reside overseas for part of each year (no more winters for us). However, we will not be going anywhere until we have solved the SM problem. Also, it occurred to me this morning that there may not even be a written contract or agreement. Is it possible?
30/11/2012 at 1:13 pm #17279It is highly unlikely that there is no management agreement, because the strata manager would be breaching the law. Section 27 of the Act provides that the manager must be appointed by an instrument in writing authorised by a resolution at a general meeting of the OC.
Also if there were no agreement, then the strata manager couldn’t be paid.
An EC has to have a Chair, a Secretary and a Treasurer. Under section 29 of the Act, those functions can be delegated to the strata manager, but even if they are, the Chair, Secretary and Treasurer (the EC members) can also exercise those functions.
If the functions have been delegated to the strata manager, this must be set out in the management agreement, section 29(1).
No offence, but your co-owners sound a bit silly.
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