- This topic has 6 replies, 6 voices, and was last updated 9 months, 3 weeks ago by .
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As a strata manager, I have always respected that a building manager should never hold a position on a strata committee.
However, one of our Owners Corporations at a General Meeting unanimously resolved to appoint one of the committee members as the cleaner, gardener and building manager.
There is a basic contract in place but the committee member is not a professional building manager more just a handy retired chap who wants to earn an income and put his heart into looking after the complex.
We warned the owners about the conflict of the owner acting as a committee member and building manager but they refused our advice. They then appointed him treasurer as well.
He now approves his own monthly invoices and is paid some $50,000 per year.
A new owner has questioned this and advised that this is a breach.
The Act under Section 32 states that a building manager may not serve on the committee.
Can anyone advise the legality of this arrangement. The owners refuse to turn this into an honorarium due to the scope involved and the fact that he needs regular monthly income.
Thanks
Nat
- This topic was modified 10 months ago by .
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I am not in NSW and not a lawyer but it would seem on the face of it that you have answered your own question. If the Act says a building manager cannot be a committee member and if the general meeting appointed this person to be a building manager and then conducted an election for committee members, then it would seem to me that this person was not eligible to be elected as a committee member so their election was invalid.
I think the EC could be advised that the person can continue to be building manager but cannot continue to be a committee member. The committee will need to appoint another one of its members to be treasurer.
$50,000 payment per annum seems a lot of money to pay someone to garden, clean and perform miscellaneous duties. Admittedly, we haven’t seen the position description and scope of duties, or the size of the block. A retired chap who needs a regular monthly income isn’t really the problem of the OC is it??
Part of the question here seems to be that the strata manager is giving the owners the correct advice and they are choosing to ignore it. Also, since the appointment was made with unanimous support, it doesn’t sound like any owner is likely to challenge the appointment at NCAT. As we say so often here, there are no Stratakops and the strata manager may not wish to upset the applecart any further.
I think the best thing they can do is to send a letter to the committee to get it on record that committee member can’t also be the building manager and what the possible downsides of allowing this to continue may be.
Given that the threshold for rescinding committee decisions when they were made inappropriately is almost impossible to achieve, it’s hard to see what the potential downsides might be if everybody is happy with the arrangement. However, if a new owner moved in and decided they wanted the scheme to be run according to strata law, that would be a different thing altogether.
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.
- This reply was modified 9 months, 3 weeks ago by .
I have seen the same issue before. According to a leading lawyer he can be on the committee as the act was meant for external building managers. The issue is if he is not a registered company, he would be considered as an employee of the strata plan. In the sense of superannuation and PAYG is concerned and is a PCBU and additionally needs to comply with the WH&S and that to terminate the relationship it is subject to the same employment law relationship you would need to deal with in your business.
Whilst in essence I agree that it can be problematic that an owner or committee member is appointed as a building manager, the act does not prevent such an event.
If all the owners are happy with such an arrangement, and the appointment has been carried out in accordance with the act, then so be it.
Readers will recognise that should the building manager fail in his duties, its almost impossible to rescind their contract ( could require a trip to NCAT) and since the owner is a member of the community , bad feelings can be established .
As for the fee paid. It would need to be a large site and require the building manager to be available at least all business hours for $50000
But again if the owners are happy to pay this, then there is nothing in the act preventing it – provided the contract was entered into in acordance with the act.
Whilst in essence I agree that it can be problematic that an owner or committee member is appointed as a building manager, the act does not prevent such an event.
The key issue seems to be whether or not they are owners in the scheme. This from the Act:
32 Persons who are not eligible to be appointed or elected to strata committee(1) The following persons are not eligible for appointment or election to a strata committee or to act as members of a strata committee unless they are also the owners of lots in the strata scheme—
(a) the building manager for the strata scheme,
So, it seems an owner can be both on the committee and be a building manager but a tenant couldn’t.Also, when it comes to the “awkward” moment when the building manager’s contract is up for renewal (or otherwise) under the amendments that came in this week the BM/member can’t be present during the discussion or vote as they have a clear pecuniary interest.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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