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  • #8610
    Anonymous

      In a 38-lot complex on the Central Coast.

      Interest in our EC imploded at our last AGM which resulted in only 2 nominated members this year.

      Nine months later, and the EC hasn’t advertised a single meeting agenda on our noticeboard, nor have they posted any minutes of such meetings. If they are having meetings, they are being held in secret and the minutes are not being made available. Some of us are alarmed about the decision-making process and lack of transparency.

      From observation this must be one of our biggest-ever spending years. There are jobs going on everywhere, including inside the secretary’s unit.

      I’ve been researching about the EC’s requirement to have meetings. I’ve read on some strata-related website “FAQ” summaries that EC’s must have meetings to make any decisions. However, I cannot pin-point anything specific in the Act to that effect.

      Are EC meetings required to make (significant) decisions, if so – where does it say this in the Act ?

      Can someone please help. Thanks.

    Viewing 6 replies - 1 through 6 (of 6 total)
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    • #17446
      Jimmy-T
      Keymaster

        There is no legal compulsion to hold EC meetings.  However, if there are decisions to be made that haven’t previously been approved by the Owners Corp, the EC must meet, must provide an agenda at least 72 hours before a meeting and minutes with 14 (?) days after it.

        The EC’s decisions are taken as the Owner’s Corp’s decisions but they have to hold a properly constituted meeting to make those decisions official. However, the EC can’t agree to spend monies that were decided not to be spent at the AGM, or to spend more than 10 percent over the budgetted figures that were agreed without a general meeting for approval.

        However, the AGM can lift these restrictions on the EC for the upcoming year.  The key factor is that the EC must convene a meeting to agree on new unplanned expenditure, so that owners can be kept aware of what is going on.

        Rules for the running of ECs are contained in the Strata Act (Division 3) and in Schedule 3 (which is at the end of the Act)

        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.
        #17447
        Whale
        Flatchatter

          Having read each of your three (3) posts concerning your Plan’s Executive Committee et al, my advice is to make your fellow Owners aware of what’s going on, and to then go for broke by attempting to secure sufficient support from enough of those to force the Secretary to convene an Extra-Ordinary General Meeting (EGM) to then trash-out all the issues.

          To do that you’ll need what amounts to a petition setting-out the Motions that you want discussed at an EGM, such as tabling any EC Minutes, filling vacant E/C positions / appointing a new E/C, tabling quotations and amounts expended etc etc., and you’ll then need to have that signed by a minimum 25% of the Owners in your Plan, with that percentage calculated as the total units of entitlement applicable to the signatory’s Units / the aggregate units of entitlement for your Plan.

          The detail is shown at Sch 2 Clause 31(3) of the NSW Strata Schemes Management Act (1996).

          #17448
          kiwipaul
          Flatchatter

            Totally agree with Whale and Jimmy’s posting.

            As no agenda was provided to all the owners prior to any meeting, and no minutes of said meeting was again provide to all owners within the 7 days of the meeting, none of the decisions made were valid (these are required to enable owners to see what the EC are doing on their behalf and to keep the EC honest)

            At the very least you should inform your SM NOT to accept any instructions from these 2 cowboys until the OC has decided what to do about recovering any illegal spending authorized by these 2.

            Because the SM would not have been in the loop to receive EC agenda or minutes they most likely paid the bills on instructions from the 2 EC members not realizing that the procedures hadn’t been followed.

            Maybe speak to the SM about recovering said money from the 2 members who illegally authorized it. I believe ANY owner would be entitled to do this if EC spends money without owners knowledge.

            If they had sent out Agenda and minutes to all owners then the action of the 2 would have been legal. Do you have a SM or do you self manage.

            #17465
            Anonymous

              @JimmyT said:
              There is no legal compulsion to hold EC meetings.  However, if there are decisions to be made that haven’t previously been approved by the Owners Corp, the EC must meet

              Thanks. That is logical, but I still can’t find anything in the Act that says “the EC must meet”.

              An EC probably needs scope to make casual small decisions without a meeting – example, have an electrician attend to fix a broken light fitting. However, we’re concerned about some bigger (unbudgeted) decisions being made by this committee having not been publicised at an EC meeting.

              There are some of us out to nail these people, but we want to get our facts right first.

              #17470
              Jimmy-T
              Keymaster

                The Act doesn’t need to say the EC must meet because no meeting means it’s not an EC decision – if there’s not a meeting, it’s not the EC. The Chair has no executive powers. 

                There are variations of that, for instance the Owners Corp can (and often does) devolve certain decisions to the Strata Manager. Or it can allow someone like a building manager to act on its behalf, or even individual owners, especiallywith regard to a certain project.

                But in the vast majority of situations where there is no building manager and the strata manager doesn’t handle day-to-day decisions, the Executive Committee has to do so – but how does it make a decision without some kind of a meeting?

                One answer is that (as happens in my building) the Chair starts acting like a CEO or General Manager, making arbitrary decisions that he or she knows will be supported by the Executive Committee.

                If an EC isn’t prepared to reel their office-bearers in, there is little that can be done preemptively to stop them. But if they make decisions that haven’t been approved by an EC meeting, then they can be in trouble if the Owners Corp turns round and says, “Hey, we didn’t give you prior approval to do this and you haven’t held an EC meeting so you are not acting as representatives of the Owners Corporation.”

                Another grey area is where ECs do a ring-around or hold a meeting by email which strictly speaking isn’t a meeting but you can be sure they will ratify the decision at at later, properly notified meeting. There’s nothing wrong with this and it does help with the smooth running of a strata scheme if decisions can be made when they need to be made.

                In any case, an ordinary owner isn’t going to be able to change the decisions of the EC whether or not it’s properly notified. You don’t even have the right to speak at an EC meeting unless a majority of EC members want to hear what you have to say.

                However if, say, a dominant member of the EC starts making arbitrary decisions that the EC won’t approve retrospectively – signing contracts with tradespeople that turn out to be over-priced or incompetent, for instance – then they could be in serious trouble because they have no authority to do that. Without proper EC authority, they are personally liable for contracts that they sign.

                At the risk of repeating myself, the Act devolves Owners Corporation decision-making to the Executive Committee – not to the Chair, the secretary or anyone else. That implies a meeting, even if it is by email or phone.

                One note of caution:  Don’t expect to get a CTTT order against your current EC members unless you can show that an owner or owners have suffered some sort of harm as a result of correct procedures not being observed.

                The CTTT is specifically given powers to reject applications for orders where the only fault is that the protocols weren’t followed and many adjudicators will work on the basis of ‘no harm, no foul’.

                This is what the Act says:

                185 Dismissal of application on certain grounds

                  If the ground for an application for an order under this Part is:

                (a)  the absence of a quorum at a meeting, or

                (b)  a defect, irregularity or deficiency of notice or time,

                      the Tribunal may, by order, dismiss the application if the Tribunal believes that no substantial injustice has resulted.

                So don’t expect the CTTT to fight your battles on matters of procedure or principle.  You have to show that there has been “injustice” and it might be easier to just run a campaign at a General Meeting to clear these people out or, at the very least, get the Owners at a General Meeting, to agree not to validate decisions made  without proper procedures having been observed.

                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.
                #17475
                FlatChatFan
                Flatchatter

                  @webwrx said:
                  In a 38-lot complex on the Central Coast.

                  Interest in our EC imploded at our last AGM which resulted in only 2 nominated members this year.

                  Webrex,

                  Why did interest in your EC ‘implode’?

                  Jimmy said ‘we need to get our facts right’. I agree it looks like everyone wants to ‘nail’ the two EC members.

                  If only two O.C. members put their hands up to be on the E.C., how many of the other 36 owners are going to step up and agree to be E.C. members if you get rid of the two workers? 

                  It looks like things are at least getting done, even if it is starting in their own lots.

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