Flat Chat Strata Forum Strata Committees Current Page

  • Creator
    Topic
  • #60936
    scammer
    Flatchatter

    Hi all

    One of our SC members has done a lot of work for our strata that is above what is normally expected, mainly forfilling the role of a building manager in the last 12 months and has requested to be paid for these extra services.

    We do not want the SC member to become an employee of the OC nor can we pay the SC member as contractor as they do not have any insurances /ABN etc., nor do we want to  have any tax complications with the ATO.

    There have been suggestions of “honourium” or waiving part or all of the SC member strata levy fees as a possible solution.

    Are there any rules/ regulations in paying a SC member in these circumstances ?   [ie limits etc.,]

    Does the payment, honourium, waiving strata levy fees etc., need to be approved by the owners at AGM or EGM or can the SC decide ?

    Are there any other ways can we reimburse the committee member for these extra services ?

    thanks in advance

    • This topic was modified 3 months, 3 weeks ago by .
Viewing 14 replies - 1 through 14 (of 14 total)
  • Author
    Replies
  • #60940
    Sir Humphrey
    Strataguru

    I think payment of committee members can get a bit fraught. I could promote bad behaviour as some residents stop treating them as selfless volunteers and start treating them in the same poor manner that they treat the employees of other businesses and/or start making snide suggestions that they are only doing it for the money.

    I would recommend instead that someone else, probably another committee member, be lined up to give a nice speech at the AGM describing the exceptional additional work this particular member has done. That person might then propose a motion that the Owners Corporation records it appreciation and authorises the purchase of a gift of a case of the person’s favourite wine or a voucher for a local restaurant or similar.

    #60945
    Jimmy-T
    Keymaster

    Agree with Sir H.

    On the other hand, I know of some schemes where people (usually lawyers) have locked themselves into office-bearer roles then expect professional-level fees, retrospectively, for the work they do.

    Strata law in NSW says committee members can only be paid for the committee work done in the previous year but they make it clear that they expect this remuneration every year. Personally, I would call their bluff.  You want power AND money? I don’t think so.

    But to answer the question, in NSW there is no limit on the amount, just on how it is paid.  In Queensland I believe there is a limit on how many times committee members can claim travel expenses for attending committee meetings.  Not sure about Victoria.

    #60948
    TrulEConcerned
    Flatchatter

    Sir Humphy and Jimmy gave good advice.

    Regardless of what you do, here is what you must not do: do not allow what to me smells like a dodgy practice of allowing strata fees to be offset by payments/honororia to committee members.

    I write from experience.

    One strata I am involved with, for many years allowed a committee member to offset his levies with work claimed to be done (but not always verified by others that it was done) and this caused many problems:

    • How many hours did he really work? Nobody kept count;
    • What should have been a reasonable hourly fee? Nobody offered a figure;
    • Often, in small stratas, the budgeted amount of levies receivable significantly exceeded what was actually received (given the practice of “offsets”); and
    • Once you allow this practice to seed in your OC, even if over time you grow unhappy with it, it’s like an errant weed: very hard to extinguish.
    #60953
    scotlandx
    Strataguru

    I agree it is a bad idea. There have been instances in our scheme where very specific pieces of work have been done by Committee members and they have been paid for them, but these have been more in the nature of professional services and the members have invoiced for the services.

    In relation to set-off of levies. An owner must pay the levies, any money they might be owed for whatever reason can’t be used to set off the amount owed. By way of example, the strata scheme might owe an owner some money for works that are the responsibility of the OC – the owner should be paid that amount separately rather than setting it off against any levies owed. Similarly, an owner can’t withhold an amount of their levy because the OC owes them money for something.

    When you set the levies each year it is by reference to a budget, so set-off against levies would skew the budget.

    The levies are independent of any other matter between the owner and the OC – if an owner withholds part of their levies they will be unfinancial.

    • This reply was modified 4 months ago by .
    #61001
    Jimmy-T
    Keymaster

    I would pay committee members a set fee based on the size of their block, provided they had completed a basic course in strata law and management, and participated in refresher courses as required.

    I’ve known an astonishing number of committee members who haven’t even read their own by-laws or the publications like Strata Living (NSW) made available by state authorities, let alone strata laws and regulations.

    Or to put this another way, pay them if it improves the service they provide to the strata scheme, but not otherwise.

    #61004
    Ziggy
    Flatchatter

    No, no, no, no, no, no, no! Strata Committee members should not be paid. In my opinion and from bitter experience most SC members do bugger all. They never respond to emails, they lie, they gang up against certain members of the SC, they don’t contribute to matters, they know little about strata law, or the role of the Strata Manager, they’re always too busy working to bother etc etc.

    So no, is my answer.

    #61030
    Mr Wong
    Flatchatter

    Pay this block’s Strata Committee Members? Not in a pink fit!

    Volunteers work longer and harder because they are doing something they care about.

    Paying our current Strata Committee would not help. It is a closed shop, contriving to keep membership within a select group of new first-time owners and to the exclusion of owners who look to the long-term life of the property as opposed to a quick and profitable resale price. This would not be such a problem except none of these revolving committee members make the effort to attend relevant courses recommended by Strata Community Association NSW (or the like) so are ineffective. They don’t pursue warranty claims for work poorly done or not done to the brief; have continually put off the commencement of pricey balcony balustrade compliance work recommended by Council in 2014 and readily agreed to by the then OC; have the OC pay for repairs to private modifications to common property because (to allow them the benefit of the doubt) they know no better; installed fans rather than pursue the pricier recommendations of an engineers’ report to prevent a serious damp problem at the source; and have allowed common property to deteriorate to the point the property in general has grown shabby on their watch (albeit with fresh dry new carpet).

    Paying committee members only when they complete a job would not work either, because it may encourage a practice which currently sees jobs cherry-picked to pretty-up an area ahead of pricey (and so perpetually delayed) maintenance work to combat damp that common-sense (and expert advice) would dictate be done ahead of temporary ‘cosmetic’ cover-ups. Paint over and sell up seems to be the motto.

    Perhaps paying the Strata Committee could work in a block well-managed, but in a dysfunctional block with sky-high levies, it feels counter-intuitive.

    #61047
    optusJo
    Flatchatter

    I am in Victoria.

    We are in a block of 8 flats and until recently there was only 1 owner on site.  Then COVID came along and the flats were harder to rent out as they were looking “unkept” and “unloved”.  It is only when owners were starting to look at getting more renters or selling that “the look” became an issue.  Owners had relied on real estate agents and real estate agents generally only commented on the flat itself not the common areas.

    We spent a lot of time and effort to clean up the front garden and documenting where maintenance needed to be done and getting quotes.

    Yes we did it because we cared and yes we saved money by doing this and yes owners were happy because they went on to get renters and sell their apartments.

    Our Strata Manager’s contract (from the SCA) sets out the fee of $220 per hour from arranging to come to the site, to getting quotes.   They are not on-site and certainly do not check that work done on the property has been done to a standard.

    4 out of 8 owners did a lot of work last year – I will certainly not be “working” again.  My time is also valuable.

     

    #61048
    brianm788
    Flatchatter

    Well, thanks very much grateful owners. I’m one of five committee members in a 50 year old block of 24 units in Sydney which has a pool, and lift. We have had the same committee for 10 years and we have all HAD IT. None of us want to be doing this, it is very onerous but there are no other owners willing to take over, many are quite elderly, the ones who rent their units out aren’t interested and the rest are “too busy”. We are actually working our guts out all year  for a very small expenses allowance per annum  of $250 which would be about 2.5 hours work p.a. if we were paid . We are all retired professionals so the other owners are, I feel, getting a bargain. Not a week goes by that one or more of us don’t put in several hours supervising trades, fire inspections, big jobs like leaking roofs, blocked sewers, painting the building, attending to by-laws, researching E.V. charging etc, there is always something needing attention. Do owners realise that every time something goes wrong, a committee member has to meet the person who comes to fix it, show them what the problem is, find a set of keys for them so they can use the toilet etc and make sure the job is done satisfactorily and keys retrieved. All for $250 a year, it is actually an insult. I find the above comments all rather disappointing. I suppose owners in well run strata schemes have nothing to complain about so don’t bother commenting. We all have a lifetime degree in common sense which didn’t come easily and is invaluable in running a strata block. I don’t think we need a degree in strata management, the degrees we all have are more than enough qualification. Readers may perhaps gather that we are all p….d off……

    #61045
    pisces
    Flatchatter

    Undertaking a Building Managers role is no small task, especially with the expectation that they are on call 24/7. Average salaries for a BM are up wards of $84K, so if what he is asking for is less, you and the other owners might be getting a great bargain and potentially saving costs by nipping problems in the bud. By way of an example, our strata block was paying an electricians call out fee every time it rained and the garage lights went out. Until I realised it was just a matter of flipping the appropriate switch in the meter room. There’s plenty of opportunities to save money if you have good reliable people on site.

    Payment for services either as an employee or a contractor probably should be negotiated up front, so everyone knows what to expect. If the person keeps a log of their duties, takes pics and keeps a record of hours spent fulfilling tasks then they are accountable. Having someone verify these might be a good idea, but does anyone check on the tasks of other contractors?

    Getting an ABN is easy and should be no impediment.

    Employing the person is also do-able. Our strata manager recently made enquires with I-care (formerly Work cover) re:Workers Compensation Insurance and was advised that Owners Corporations are considered ‘exempt employers’ if the amount of remuneration is less than  $7,500. If your building manager qualifies they are able to make a claim if injured with the payment of a $175 admin fee. See more details here

    https://www.icare.nsw.gov.au/employers/who-needs-workers-insurance/who-needs-a-policy

    With regards to assurances, presumably your building has public liability insurance which could be extended to cover this amazing human who is doing all this great work. The coverage is only to stop him/her being from being sued by a third party in the event of damage or injury.

    Our  building insurance which is the biggest yearly expense also covers volunteers, committee members, and complete randoms who don’t even have any business being at the building, so why not extend the insurance policy you already pay for rather than making him get his own public liability policy? He may still want to take out additional personal accident insurance but that should be his choice.

    I am currently wrangling with a similar issue. For many years I worked voluntarily in the common area gardens to keep the weeds at bay, until I moved out a year ago. On a recent inspection with other committee members, the neglected state of the gardens was discussed. I offered to undertake the task for a reasonable rate, much less than they would pay if they got someone else. I will mention at this stage that I am a skilled and qualified horticulturist, weed control specialist and garden designer, this is my profession. I care about the state of the building and grounds so I’m willing to take the two hour round trip once a month to help bring the garden beds back to a manageable standard. If I attend every month, my yearly fee will be a fraction of the $7,500 limit set by icare for the Strata Plan to be an ‘exempt employer’.

    In addition, my Landlords Insurance policy also includes public liability for up to $20 Million. This covers the whole site not just inside the unit, and when I rang the insurer to discuss my circumstances I was told that I would be covered since I have been delegated “responsible” for the gardens.

    Interesting enough as a committee member I am covered for all sorts of things including making bad decisions and fraud, but not for pulling weeds apparently!? I figure between the Building Insurance and my Landlords policy this is more than enough and asking me to get my own public liability policy is over the top and unnecessary especially given the low level of risk associated with the task. Your building manger may be a different story if he is using powered tools or working at height. But really I hope common sense prevails.

    I whole heartedly agree with Jimmy that committee members should undertake relevant training, and this should be completed prior to voting oneself onto the committee… a dispicable practice that I have never witnessed on other management committees. In fact why not also make reporting compulsory? I asked for a summary at our last AGM, of what the committee had achieved during their tenure and got some very defensive reactions since the short answer would have been “nothing”.

    Why not improve accountability and throw in a few KPI’s to get the right people onto strata committees. People that are motivated and can make a difference instead of relying on amateurs who have no idea how to manage a multi million dollar asset, let alone understand the principles of democratic decision making. An allowance similar to a elected local government councillor, not enough to live on but enough to compensate for the endless hours of reading, research, meeting trades on site, emailing, comparing quotes etc, etc…

    What do you think?

     

    #61079
    Flame Tree (Qld)
    Flatchatter

    The trouble is 1) it’s illegal and you won’t last adjudication, 2) jealousy of some will create a hornet’s nest as to what payees are expected to do, no matter how much the good ones actually do, 3) the go-hard-then-go-home of volunteerism should stand so get the proper motives to work and when they have done their job move on, 4) you can imagine the arguments on what the form and rate should be between those who want a mint and those who’ll pay a pittance, and 5) would encourage some folks on the tet to hang around, which denies committee refreshment and newbies the chance to learn the ropes.

    As is, in Qld, any folks on the committee are not permitted to do any professional services and be paid for it, which can seem unfair and misses a chance of good value, conscientious work, but that’s where the law stands at present.

    #61084
    Jimmy-T
    Keymaster

    1) it’s illegal and you won’t last adjudication,

    I think the point of the discussion is, should we make it legal.  But your other points are well-made.  Find a way of rewarding those who work hard for the community, and discouraging those who are more interested in the reward (cash as well as influence)  and you’ve got it.

    Crack that one and move swiftly on to the Middle East, Ukraine and the US Congress.

    #61088
    Sir Humphrey
    Strataguru

    … Find a way of rewarding those who work hard for the community, and discouraging those who are more interested in the reward (cash as well as influence)  and you’ve got it…

    I think the sort of person who works hard for the community and does the right thing tends to feel rewarded when they feel appreciated and recognised. Hence my suggestion in response to the original question that someone be lined up to say some nice words at the AGM about how the particular committee member has put in an exceptional effort, over and above, much appreciated etc. and propose that the committee be authorised to purchase that person a gift such as a restaurant voucher or similar.  Although the voucher has a cash value, it does not have quite the same mercenary feeling as just handing over a wad of cash.

    If it were me, I think I would feel better about being offered a night out at a nice restaurant with my wife who has often taken up the slack at home on occasions when I got distracted by Owners Corporation matters. If I were just given a lump of money, even if twice as much as the restaurant voucher, I don’t think I would feel appreciated in quite the same way. A debate about just how much money might even negate what was intended as an appreciative gesture no matter what amount was offered in the end.

    #61184
    Flame Tree (Qld)
    Flatchatter

    Humphrey, the problem with that is it’s not considered an acceptable use of owner’s funds by the Qld commissioner and would likely fall over on challenge even if included in the budget. So any reward offered need come from an additional whip-around. Which makes sense I guess as those who want to can, and those who don’t, won’t thank their volunteers in this way.

    Personally, I’m aware of 3 different approaches: one where the manager on behalf of the committee does such a good job the owners send them away for a lavish dinner or weekend away, one where we never need engage with the committee or manager as they do such a great job and probably wouldn’t take a reward more than a pleasant thank you, and lastly, where the committee thank themselves as no one else will!

Viewing 14 replies - 1 through 14 (of 14 total)
  • You must be logged in to reply to this topic.

Flat Chat Strata Forum Strata Committees Current Page