Voluntary Chairman wants to charge Body Corp for his time & effort

The issue was occasionally raised informally by individuals during my five years in the chair.  My view was that it would tend to create a master-servant type of relationship.  I wanted to keep it voluntary; I was actually on the EC to help protect my investment!  If asked about payment, I might have nominated a black cartridge for my printer as a goodwill gesture.  Ultimately the incoming EC spontaneously gave me a gift card after I stepped down, and I appreciate that. 

One or two individuals acted as if the master-servant relationship existed, and one still does, but I suppose you get them in every building.

What part of the Act states that the role of Executive Committee Members has to be voluntary?

Answer… none, and that’s precisely why it provides a mechanism for Owners Corporations to consider, authorise, and permit such payments, which are particularly but not exclusively relevant where Plans are self-managed and Members are often doing the work that a Strata Manager would at a charge-rate of $160/hour.

Andos, at the end of the day, whether or not your Owners Corporation decides to pay it’s Chairman doesn’t depend upon how common or otherwise that practice is, but rather upon how much if any value those voting at the General Meeting place upon his “time and effort”.

Congratulations Andos – I’ve posted to this Forum almost 1400 times you’re the very first person to give me the bum’s rush, but as apparently you’re both a physic and a statistician that gives you some privileges I guess.

Unlike you, I can’t judge other peoples’ attitudes without meeting and speaking with them personally, but I’ll have at a guess that you don’t want to pay your E/C Chairman; right – genius aren’t I?

Don’t worry though, just boost your confidence by asking others what they think, or about what their Owners Corporations do, until such time as sufficient numbers of those agree with your point of view, even if they’re in the minority overall.

At least in that way, when the subject of paying the the Chairman comes up for discussion at your Plan’s next General Meeting you’ll be able to confidently respond by saying “NO, and what’s more a whole lot of people on FlatChat agree with me!”.

Anyhow, I’ll hand you over to the rest of my fellow FlatChatters (just make sure that you all refrain from giving Andos objective advice, and instead just say that E/C Members take on their roles on a voluntary basis and that they shouldn’t be paid; ever).

Whale has already answered this more than satisfactorily.  Posters note:  There are only three Staratgurus on this website out of more than 1800 active members.  They achieved that role by dint of reliable advice provided over a number of years, so they all deserve some respect.

But to reiterate the facts, I have heard of  chairpersons who get paid illegally, and it’s usually because they bully their EC members into agreeing to it, nobody challenges it and there are no StrataKops who will come charging into their EC meetings to stop it.  I have also heard of chairpersons who get paid because everybody appreciates the hours they put in and the hard work they do and they are terrified that they will just stop doing it if their time and effort aren’t adequately compensated. 

But the law is quite clear on this, as linked to previously: 

25   Can members of the executive committee be paid?

An owners corporation may pay to a person who is the chairperson, secretary, treasurer or a member of the executive committee such amount as the owners corporation determines at an annual general meeting in recognition of services performed by the person for the owners corporation in the period since the last annual general meeting.

In other words, if it’s done at all, it has to be done retrospectively and it has to be agreed by a majority of the owners at an AGM.  This is different, by the way, from reimbursing the chair for reasonable expenses (phones, photocopying etc) but, again, that should be done retrospectively although it probably can be OK’d by the EC.

In my humble opinion, if the running of a building is so demanding that the chairman feels they should be paid illegally in advance, then may be time to think about getting a strata manager.  At least he or she will know what they’re doing and carry professional indemnity insurance in case it turns out they don’t.

As Whale pointed out earlier, anyone who expects to get paid must carry the right insurances, at the very least.  And i would add that any chairman who demands payment in advance hasn’t bothered to learn the basics of strata law and should be disqualified on that count alone.

And to answer the original question, as other have observed, it doesn’t matter if this is common practice or not – you can’t agree to pay any committee member for their work as a committee member until the AGM at the end of the year for which they expect to be paid.

The logic behind this is simple – if they have annoyed too many owners, they’ll get nothing and if they have their hand out at the beginning of their term, they don’t know the first thing about strata and they need to think about why they are volunteering in the first place.