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  • #8344
    confused1
    Flatchatter

      I’ve been in my unit for 2.5 years now, prior to that it was agreed by the EC that the fences be replaced. To cut a long story short, the saga of “the fence” has seen the cost blow out to about 24k….

      Earlier this year, all owners (15) were asked to vote on whether we were to accept an interest free loan (from one of the EC members) to be repaid in 4 instalments over a year or forego the loan and pay a one off special levy.

      There were insufficient responses (probably due to lack of information) to come to any decisions.

      Somehow, the fences have now been completed and they were funded through a loan.

      The owners are generally not informed of EC meetings, sometimes a notice will appear on the front door but usually only on the day of the meeting and most people aren’t home from work in time to see it. If we are lucky enough to  receive copies of minutes it’s generally about 6 months after the fact.

      The EC was a cast of 6 when voted in, but for various reasons have now whittled down to 3. The EC (3 ppl) are planning an EGM 2 weeks prior to the AGM to decide how the ‘loan’ will be repaid. If the special levies aren’t voted in, the lendor will demand we take out a loan to repay her (remember we never approved of borrowing in the first place). Apparently now that there are only 3 members a quorum of 2 is acceptable?

      I’m not sure of the balance of the sinking fund, but they are also planning on more fencing (to replace a wall they knocked down during fence construction – again, who approved?).

      My questions are:

      1. What capacity does the EC (50% of those originally elected) have to enter into such financial agreements?
      2. If an item was approved years ago and blows out in cost, what are the limits the EC can approve without approval from the OC?
      3. If a committee loses 50% of its members, do the remaining 50% still hold the same level of authorisation?
      4. Is it possible for the OC to put a hold on the decision making rights of the EC until a new one can be elected? Keep in mind, the AGM is scheduled 2 weeks after the ECM (convenient huh?)

      In my opinion, it wasn’t necessary to replace all of the fencing (and add new fencing) at the same time. It could have easily been done in stages. (Parts of it werent’ really needed at all)

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    • #16348
      Jimmy-T
      Keymaster

        @confused1 said:

        My questions are:

        What capacity does the EC (50% of those originally elected) have to enter into such financial agreements?

        The Act says “When a vacancy occurs in the office of a member of an executive committee … the owners corporation must appoint a person eligible for election as a member to fill the vacancy. Any person so appointed holds office, subject to this clause, for the balance of his or her predecessor’s term of office.  However, in the meantime as long there is a quorum based on the intended size of the EC, decisions are valid.  But that would mean that all three of those elected would have to be there in person (becasue the EC has to vote to accept proxies and they can’t vote if fewer than half of them are there, because a quorum is 50 percent of the number of members determined at the last AGM.)

        If an item was approved years ago and blows out in cost, what are the limits the EC can approve without approval from the OC?

        In a large scheme (over 100 lots) it may not be any more than 10 percent over budget unless that has been removed by a general meeting. I don’t think theres the same restriction on smaller schemes.

        If a committee loses 50% of its members, do the remaining 50% still hold the same level of authorisation?

        See the first answer – they do if they are all actually at the meeting to make the quorum – but they should appoint eligible replacements as soon as possible.

        Is it possible for the OC to put a hold on the decision making rights of the EC until a new one can be elected? Keep in mind, the AGM is scheduled 2 weeks after the ECM (convenient huh?)

        The Owners Corporation’s decisions are superior to the EC’s.  But you’d be hard pressed to get another general meeting in before the next EC meeting.  However, they’d be pushed to get anything done before the AGM  pulls them into line, wouldn’t they?

        And it’s hard to undo decisions that were legitimately made by the EC acting in good faith (even if they turn out to be bad decisions).

        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.
        #16349
        kiwipaul
        Flatchatter

          QUESTION

           

          Can an OC decision (at the AGM say) be later reversed by an EC decision at a later date

          OR

          Would it require a OC vote to reverse the original OC decision. This sounds the most logical ans but hey it’s strata so how knowsCoolCoolCool

          #16350
          Jimmy-T
          Keymaster

            @kiwipaul said:

            Can an OC decision (at the AGM say) be later reversed by an EC decision at a later date  OR  Would it require a OC vote to reverse the original OC decision. This sounds the most logical ans but hey it’s strata so who knowsCoolCoolCool

            It depends. The Owners Corp is the superior body to the EC but decisions of the EC are taken as decisions of the Owners Corp for the sake of just getting things done. For instance the Owners Corp might decide not to undertake certain work because it was too expensive but the EC might agree to it later when the price was right.

            The Act is quite clear on the demarcation … up to a point (see below).  The EC can’t countermand decisions that MUST be made by the Owners Corp in a general meeting – like by-laws and special resolutions.  And the EC can’t make decisions that Owners Corp has specifically told it not to make – any such decisions would probably be declared invalid if challenged at the CTTT. Finally, if the Owners Corp and the EC disagree, the Owners Corp wins.

            What that means is, if the EC makes a decision that it hasn’t been forbidden from making but which goes against the will of the majority, the signatures of 25 percent of the owners can call an AGM where the decision can be reversed and, in all likelihood, the EC would be sacked (you’d think).

            Any EC can defy the wishes of the majority of owners – many do –  but only until that is challenged or they face their day of reckoning at a general meeting

             

            21   Executive committee’s decisions to be decisions of owners corporation

            (1)  A decision of an executive committee is taken to be the decision of the owners corporation, subject to subsection (4).

            (2)  However, the following decisions may not be made by the executive committee:

            (a)  a decision that is required by or under any Act to be made by the owners corporation by unanimous resolution or special resolution or in general meeting,

            (b)  a decision on any matter or type of matter that the owners corporation has determined in general meeting is to be decided only by the owners corporation in general meeting.

            (3)  An owners corporation may in general meeting continue to exercise all or any of the functions conferred on it by this Act or the by-laws even though an executive committee holds office.

            (4)  Despite any other provision of this Act, in the event of a disagreement between the owners corporation and the executive committee, the decision of the owners corporation prevails.

            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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