Strata Rolls and Conflict of Interest questions

This is a long and complex set of questions, so I have broken them down and answered them separately.

Columbo wrote:

Conflict Of Interest and Voting How does the prevention of participating in a vote where committee members have a financial interest work? What is this meant to help manage? Does this have implications/relevance when a developer continues to own multiple units in a building and also has multiple seats (but a minority) on a strata committee?

This is meant to prevent owners who have a financial or business interest in the scheme from swaying votes to favour their business.  For instance, owners who are running short-term lets might fall foul of this or if they are renting their property to business that the other owner want to restrict and have the power to do so.

It’s a very loosely worded law (see below) which is yet to be tested at the Tribunal and has a few grey areas. But in a nutshell, judging by section 18 of Part 3 of schedule 2 of the Act (below) any committee member who makes money from a matter being discussed, or is an employee of a company that similarly makes money,  must declare their interest (Max fine $1100 for failure to do so) and should leave the meeting while it is being discussed.

NB, this only applies to strata committee meetings.  They could still rock up at a general meeting and throw around such voting power as they may have.

Also, if the conflicted party has multiple members on the committee and they vacate, depending on the numbers, that could leave the committee inquorate, meaning any decisions made would be potentially subject to challenge.

For that reason, if no other, the number of representatives of the developer elected to the committee should be restricted, if possible.

Columbo wrote:

So the argument from our strata manager over a lengthy period of time about privacy seems to be total baloney!

I believe the vast majority of strata schemes are not covered by the Privacy Act.  However, the strata Act says that contact details must be provided on the strata roll.  The strata roll is part of the documentation owned by the Owners Corp and therefore it must be made available to the strata committee and, indeed, any owner who arranges to go the strata manager’s office and see and copy it.

I wouldn’t concern yourself unduly with why your strata manager is being obstructive in this regard.  They are either doing their job properly, as per the law, or they aren’t. And if the latter is demonstrably and provably the case, make a complaint to Fair Trading  (which you can do as an individual owner) then get rid of them.

Columbo wrote:

if there is a discussion about STRA at a committee meeting anyone who is operating a STRA rental should exit the meeting entirely during that discussion,

I would think so … seems like the definition of a conflict of interest, although I can see situations that might benefit from a STRA operator being there to answer questions. However, even then they can’t vote.

Columbo wrote:

does the Manager have to ensure that the authority granted as Secretary is performed to the letter of the law?

The standard strata manager agreement excuses them from any responsibility for errors or just bad decisions that they make where they should have known better, so it’s hard to know how you would enforce that except by raising a complaint at Fair Trading and seeking their enforced removal/replacement at NCAT.  Removal and replacement by a compulsory manager seems like the only sanction – apart from getting rid of them at the first opportunity when their contract runs out.

Columbo wrote:

I write a letter to the SC asking the Secretary to clarify whether he has assumed all the responsibilities associated with the role, or whether the manager still has legal responsibilities as a result of the delegated authority in the management agreement.

I think it’s a good tactic but you have to be quite specific becasue the duties and reponsiblities of the starta manager and strata secretary overlap.  E.g. “In this scheme where a strata secretary has been elected and is in situ, who has prime responsibly for [whatever you think isn’t being done]  in the first instance, under normal circumstances.”

I would add that condition because there are emergency situations where, under a normal back-up delegation of powers, the strata manager can to step in where the office-bearers are not able to function or are absent for whatever reason.

For instance, if the secretary (for example) turned out to be unfinancial or just not around, the strata manager could call any meetings required to clarify the situation. In you scheme the strata manager thought they would be running the show with their decisions rubber-stamped by the committee and that is far from standard practice.

Columbo wrote:

I have also had to really wind him up about declarations of conflict at the beginning of the meeting.

All he has to do is to put it at the top of every agenda, asking if there for any conflicts of interest relating to items on the agenda and reminding members that are substantial statutory fines for failure to do. Something like:

Members to declare conflicts of interest relating to items on the agenda. FYI: Failure to do so can result in substantial monetary fines. (NSW Strata Schemes Management ACT, Schedule 2, Part 3, Section 18)

Most people reading the agenda will assume the strata manager put it there.

Columbo wrote:

Surely there must be a solution for this other than having a blanket delegated authority?

The simplest solution would be for the committee to temporarily elect a new chair until such times as the incumbent has raided the biscuit tin.  Any strata committee member can have multiple office-bearer roles.