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We are down-sizers and new to strata laws. Our unit is in Sydney. Before we purchased, the OC passed a motion giving the strata committee (SC) authority to make decisions instead of the OC making them at AGMs and EGMs.
Several other owners have told us that the SC have been exceeding the authority and, in fact, abusing it. We’ve read the resolution and it doesn’t list what kinds of decisions the SC can make. The SC has been changing common property which we and many other owners disapprove of.
Firstly, does the authority need to be renewed at each AGM? Or does it last until formally revoked some time in the future by another resolution?
Secondly, can the authority be revoked at an EGM or AGM?
If SC members resign or are not voted back in, does the authority extend to the new SC?
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Unless there is some quirk in NSW law, I expect it is like in the ACT. Here, if the Act specifies that a particular decision requires a resolution of the owners corporation (OC), that can only be done at a general meeting of owners. For many decisions, an ordinary resolution is sufficient (simple majority of the meeting). Some particular types of more serious decisions require higher resolution standards such as a special resolution (a majority in favour and fewer than 25% opposed in NSW) or an unopposed resolution or a unanimous resolution.
The powers of the EC are limited to functions of the OC that don’t specifically need a general meeting resolution. Even then, if the OC has made a decision, the EC is bound to follow the OC’s direction. Eg. the OC might resolve that the EC should follow a set of guidelines when acting in some area within its powers. An OC does not have the power to delegate a decision to the EC if the Act says the decision must be a general meeting resolution. In the ACT, the EC’s functions are described as follows. I expect NSW has something similar.
(1) The executive committee of an owners corporation exercises the functions of the corporation.
(2) Without limiting subsection (1), the executive committee’s functions include the following:
(a) developing matters in relation to—
(i) the common property; and
(ii) the strategic affairs of the owners corporation;
(b) submitting matters developed under paragraph (a) to the owners corporation for consideration;
(c) monitoring the owners corporation’s financial performance;
(d) approving the annual financial statements and budget for presentation to the owners corporation at the corporation’s annual general meeting;
(e) supervising the treasurer, secretary, manager (if any) and communications officer (if any);
(f) carrying out the decisions of the owners corporation made at general meetings.
(3) The executive committee must exercise its functions—
(a) as the corporation directs by resolution at a general meeting; or
(b) in the absence of a resolution—as the committee considers appropriate.
<i>Note </i>The resolution required under s (3) (a) is an ordinary resolution, unless the Act provides that the resolution should be a special, unopposed or unanimous resolution—see sch 3, s 3.14 (Decision-making at general meetings).
Sir Humphrey is right. In terms of NSW law and generally, the issue is that there are certain powers that are reserved to the owners, they can’t be “given” to the Committee. That is – for numerous matters the only proper exercise of power is by the owners voting at a general meeting, either by ordinary or special resolution, the latter requiring 75%.
This includes matters such as changes to common property.
So in this case it is not a matter of revoking whatever power was purported to be given to the Committee, because you can’t give that power to the Committee. If the Committee is making decisions such as changing common property without the approval of the owners voting at a general meeting, then they are acting ultra vires (outside their power).
I suggest you contact the strata manager at first instance and ask them on what grounds they believe that the Committee is acting within their powers and in accordance with the Act. It is likely that the manager is also clueless, in which case you will have to escalate the issue. The thing is, if you put the Committee on notice that they are acting outside their power/authority, and they continue to do so, they can be liable for those acts.
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