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$100,000S OF MISAPPROPRIATED, OWNERS CORPORATION Funds
Anyone with similar experience or advice please respond?
It seems we must take our paper work to Fair Trading and what we have read here and in Jimmy’s great columns leave us with little confidence.
The following is the tip of the Ice berg.
We have found our Former EC Chair, Secretary and Treasurer any have been-
- Approving increased Fees that were never submitted to the AGM of an EGM and there EC minutes have no records of any approvals to these increases in Annual Fees.
- Approved many over and extra payments on contracts, (no records)
- Unjustifiable if not frankly fraudulent payments (no information on invoice) and made out to an employee duplicate and triplicate services/ items. E.g. Invoices totalling $ $700.000 p.a. WEED POISON and most far worse have been approved, at this stage it has to amount somewhere in the vicinity of $100,000s.
- For years the deposits for the Security entry devices have been recorded as income by the Strata Manager
- Contravened the strata legislation not getting 2nd quotes for Work over $60,000.
The strata Manager is denying any liability and blaming the former Chair and Secretary who they say approved the payment of all invoices, not the strata manager or anyone at this office The committee had complete unquestioned authority. (wasn’t something like that said at Nuremberg).
Any advice welcomed.
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There is a difference between fraud and incompetence and I tend to favour the old adage that you should never ascribe to malice anything that can just as easily be explained by stupidity.
If you are alleging fraud, then you need to establish who benefitted and by what nefarious means this was achieved. Then it is a police matter.
If you are alleging incompetence by the office-bearers of your Owners Corp, bear in mind the law allows a lot of leeway for EC members who acted in good faith but broke strata law. Their come-uppance comes when they are voted out of office.
If you are saying the strata manager cost the owners corp money because of their deliberate acts or professional incompetence, they are covered by professional indemnity insurance and may be worth demanding compensation and, filing that, pursuing them through Fair Trading.
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.
Hi Flanet,
Sounds like a right dilemma to me, but my experience with Fair Trading was very positive… Although the inspectors lack the power to make important sanctions, you may be left with the Tribunal who in my opinion are a cancer to NSW Strata Schemes (just my opinion of course).
I’d be inclined to start with lodging a complaint with the Strata Section (make sure it’s not the building section) of Fair Trading and get the ball rolling. You Strata Managers should be investigated by the inspectors and your concerns viewed by a Government Dept. at least.
If you have little luck, consider lodging a formal complaint with the NSW Fair Trading minister under the Property, Stock and Business Agents Act and then maybe seek to sue your Strata Managers once all owners are aware of where their money is being spent.
Also, go to a NSW Court of Law and avoid the Tribunal… it’s not worth your time and effort and it is likely your strata manager will just hire an unscrupulous lawyer to lie outright and they will get away with it… as the unfortunately do most of the time! You might even find out that the former EC members were well aware of these indiscretions, and could sue them directly if that’s the case… They’re no longer covered by ‘your’ office bearers insurance if they have sold up.
I feel sorry for you really, but this is strata in NSW for all of us. If you want justice, don’t bother as it doesn’t exist in Australia… This was the advice of a well respected Strata Lawer to me… he added that the most you can hope for is monetary damages!!
Best of luck,
Thom
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