Monthly Archives: May 2016

Am I going to gaol for being on a strata committee?

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White-Collar-Crime1

A schedule I’ve just prepared comparing the responsibilities of committee members under new strata law with the current laws makes the point quite visually. The duties list before was small and now it’s big. These are not ‘things to be done’ type duties, rather, ‘you will be sued if you don’t’ type duties.

The soon to be imposed duties on elected committee members are hardly controversial and indeed are quite old fashioned; they’re just new to strata. There’s an obligation to act in good faith, to disclose conflicts of interest, to declare pecuniary interests, and to exercise due care and diligence when making decisions.

These are not things that should scare us. There’s immunity for doing the right thing and the new laws probably do no more than restate the common law that applies now anyway. By these standards, strata committee members are rarely sued, and no one can recall the last time one was sent to gaol.

In committing these things to the statute books there is however something about which we should be very afraid, and its not the loss of wealth or liberty. Accusations of committee members breaching their newly enacted statutory duties will become the new normal every time there’s a fight within.

Fights over dogs and cats will be elevated to questions about the exercise of good or bad faith. Alliances between different users of property will be attacked with allegations of non declared pecuniary interests, and every time someone wants to stop anything of significance because they don’t want to fund the additional levies there will be protests about process and the absence of due, care and diligence.

The result if we are not careful is that an already hard and thankless job might just become impossible. Such is the conundrum of this new form of living – if we are to be self governing as our legislators would have it then there must be standards but so far at least it seems no one wants to invest the time or money needed to reach these lofty heights.

Let’s see if these reforms change our ways.

New strata laws and tenants: A genuine attempt at inclusion?

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New strata laws for NSW to begin later this year make a token gesture towards including tenants in meeting about the management of common property. Like most forms of tokenism, they are bound to upset everyone concerned.

The starting point is this, owners must advise the owners corporation when they tenant a property. This is required because by-laws bind tenants and owners need to know who is using common property. The information is also needed for fire safety inspections purposes. There’s nothing token about any of this.

Where problems will arise is the extent to which the new laws seek to involve tenants in the affairs of the owners corporation. Where tenant notices have been given for more than 50% of lots a whole new procedure will kick in –

  • A tenants meeting must occur before the AGM
  • A tenant representative is to be elected to participate at the AGM and in subsequent committee meetings
  • The AGM agenda must be give to tenants or placed on a notice board if one is kept
  • The committee must make a determination about what information will be made available to tenants at the AGM and at committee meetings

This will come at a significant cost to owners corporations. It will also create more work and scope for error by strata mangers in meeting additional deadlines, and to what end?

Far from being inclusive, these new laws, with the ability to keep almost any useful information secret, will reinforce perceptions by tenants that they are second class when it comes to occupying strata property.

This reform will work for no one. It will alienate tenants. It will cost owners money and strata managers time. And it will hit small schemes harder than the large. It’s more likely that a half of a six pack is tenanted with notices properly given than 50% of a 100 plus lot building.

Tenants deserve respect, information, and a say,but these laws will not deliver that.

New strata voting regulations – Continuity and change, electrifying change

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You have continuity and you have change; a campaigning slogan used in Veep, a satirical US comedy about an American running for president that stands for nothing, accurately describes the new strata voting regulations released for public consultation last week.

Continuity comes in two forms:

  • The regulations maintain the right of a person to require paper and post as their method of participating in meetings. This will annoy the progressives that want to keep management fees down by using electronic communication methods.
  • The traditional methods of voting in person and by proxy (albeit with restrictions on proxy farming) stay as well, not surprisingly.

Change on strata voting practices comes in so many forms it will, if allowed to go unchecked, turn strata management on its head:

  • Voters will be able to participate in meetings by telephone, by video conferring and other electronic means.
  • Pre-meeting ballots will allow people to vote electronically and by voting websites and postal ballots are back after having been abolished in NSW over 30 years ago.
  • To these many choices add the option of secret ballots with two voting envelopes to protect the identity of the voter and you have a whole raft of new complexities and expensive procedures that no one will want to pay for.

The government has provided for voting choices but imposed none of them. It will be up to owners corporations to choose what methods they wish to use.

This will be the first test of reasonableness for strata entities under these new laws. At what price will owners corporations facilitate participation? Will strata managers do what they normally do and meekly accept that they must do more for no additional fee?

Continuity with change indeed.

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