Education Regimes – Who Needs This?
Strata and Community titles are the largest growing type of development across Australia. All States & Territories are experiencing growth in most sectors of the market (residential, industrial, commercial, retail and mixed use). In addition, most States and Territories are also reviewing legislation to keep up with the ever changing shift into strata.
Some time ago I had the privilege to share the stage with Bernard Salt, the world renowned author and demographer, at the Strata Community Association National conference. In that presentation, Bernard shared his insights into the increasing challenges of the growing strata market and the management of strata schemes generally.
One theme that came throughout the presentation was education of strata managers, executive committees and owners on how schemes and associations function. This is something that has always sat at the back of my mind and with more and more responsibilities being laid on strata schemes and those that manage them, in this article I tackle what an executive committee should be thinking about but above all else everyone needs to increase their knowledge and skill development no matter whether you live, work, invest or manage a strata or body corporate building.
The Committee
The Committee (Strata Committee or Executive Committee) is a small representative group of owners or owners’ nominees elected at a general meeting. Its basic function is to administer the day to day running of the strata scheme with, on some occasions, the assistance of managers and/ or caretakers. Before determining the responsibilities, you first must consider how to get onto the Committee, its role, the roles of its members, the limitations and then what things the Committee has to contend with.
Before even getting onto a Committee, you should have some basic grounding in strata schemes and their management. Owners need to know:
• What people own in a scheme – in each state the ownership (or title) varies from cubic airspace (internal walls, floors and ceilings etc) or centre line rules (ie the centre of a wall is shared ownership) or external walls boundaries. If you are an owner across various borders, you need to be mindful of the differences.
• How to get elected properly. Each piece of legislation has a process of election. If you do it right, there is little difficulty defending an election.
• Understand what your role is on the Committee. As a member of the Committee your primary role is to act in the best interests of all owners; not your own interests (a fiduciary relationship). The Committee also has various positions, Chairperson, Secretary and Treasurer. These are honorary positions; not a position of power or overlord.
In most instances their roles are defined and should be followed.
• Follow the proper procedures and limits when making decisions. All legislation has procedures to follow when holding meetings. approving works, maintenance, court action etc. These must be followed as decisions can be challenged and, in some instances, action taken against the scheme (or owners) for improper decisions.
A Committee does not have an unlimited power to make decisions. Decisions on some issues need to be referred to a general meeting for all owners to vote on.
ISSUES FOR COMMITTEES Repairs and maintenance
The Committee must be mindful that its obligations are to be strictly adhered too. In carrying out any repairs, the Committee should consider:
• Using licensed, qualified and insured persons;
• Entering into proper contractual relationships;
• Having major works projects supervised;
• Reviewing WH&S requirements; and
• Considering the funding of the works.
Building defects
Flowing from repairs and maintenance is building defects. The Committee should notify any and all defective construction work to the builder and insurer (so that the rights under the relevant legislation are kept in tact). If the work relates to remedial works, there will be a dispute resolution process in the contract and if not, the relevant legislation will provide a process (especially in residential schemes).
Understanding ownership
One of the most difficult issues for a Committee to deal with are ownership issues (lots and common property). Clear determinations are required so that repairs and maintenance and works by owners can be defined and responsibilities clearly set out. There is a proliferation of would be “renovators” out there so it is extremely important for the Committee to manage renovations, repairs and works properly and one of the major issues that arises is working out what someone can do and where they can do it. In some cases, the strata community will be responsible for parts of the building that are within a lot, such maintaining loadbearing walls in a structurally sound condition.
So unless you know “who owns what” and who is responsible for what part of the building, the decision making process may be flawed.
By-law enforcement
A major task/challenge for Committees is by-law enforcement. Understanding the by-laws applicable to the scheme and how to enforce them is critical.
• Notice to comply
• Mediation/adjudication
• Penalties
• Other options (ie Council involvement)
Owners works in lots
As an adjunct to the problems with determining lot and common property, when owners wish to undertake works there will be further challenges. In these instances:
• Consider the work and its impact on common property;
• What type of consent is required (special resolutions, ordinary resolutions, resolutions without dissent);
• What conditions are relevant;
• What warranties and indemnities are appropriate;
• What costs are involved (and who pays for it); and
• What experts are required.
WH&S, lift registration, Annual Fire Safety statements
In the life of the scheme different requirements will be placed on the owners corporation to deal with fire certification/registration, annual fire safety statements, WH&S audits (or included in work schedules), or Council orders.
In all of these instances, the owners corporation (and its Committee) must carry out the task in compliance with the appropriate laws and at the proper times.
Overall
Being on the Committee is a thankless task, one shrouded in mystery (some say misery) and one that carries with it responsibility for actions taken. Being on the Committee requires commitment to gaining knowledge, using skills in negotiation, project management and accounting. You will be called upon at all hours to do things that you did not think were part of the “job”.
This is why many governments, strata organisations and strata managers create and deliver training for Committees (including ourselves at various public seminars). Committee members must keep current and with all of this to consider, in my view Committee members should undertake a recognised course to be on a Committee to help them undertake the tasks required to be a good Committee member. Lets’ just see if anyone takes up on the idea…
This article has been contributed by Colin Grace, Partner at Grace Lawyers.
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I heartily agree with education for committees. What would be a recognised Queensland course to be on a committee?
You are correct. Education and knowledge are a necessity to cope with the everchanging strata industry. But that education is needed at every level of the chain from the Politicians and the Legal Fraternity who prepare the legislation, to the Body Corporate Manager, to the Caretaker/Letting Agent, to the Committee and to the reception staff that represent the caretakers who are far less frequently onsite and far less proactive than they were when the system was introduced some 25 years ago. I can recall a building where the receptionist on duty and with zero knowledge of the by-laws and representing the “missing” caretaker told a “holiday tenant” that “pets were allowed in the building”. 2 Great Danes took up residence and the tenants “chocked open” 2 fire escape doors to allow “the puppies” to freely exit/enter the building. A committee member acted quickly when the incident was reported by an owner who was terrorized by the dogs. Now that one hit the fan! I don’t believe that legislators and lawyers believe that this type of incident can actually happen.
The committee (who cannot claim any financial advantage) certainly should have deep knowledge of 4 things: the Legislation, and the Caretaker, Letting and Body Corporate Manager Agreements so they can fully understand their own responsibilities. Many Body Corporate Managers handle the administration and can be well directed by a good secretary re administration and by a good treasurer re financial issues without the committee member doing much of the actual physical work. Qualifications for the Body Corporate Manager should be legislated and certainly the Caretaker/ Manager should not be able to complete the purchase of Management Rights without detailed knowledge of the legislation, agreements and with very clear language skills and the levels of both managerial expertise and communication that are required. Generally, the Caretaker Agreement requires the agent to alert the committee of problems that need to be addressed. This role in providing onsite “supervision and monitoring” should also assist the committee to make good decisions if it is done diligently.
In the article from the Commissioner which also appeared on this issue of smart strata, I feel the commissioner ignored the role of the Letting Agent in communicating by-laws to holiday tenants and in taking personal responsibility for seeing their tenants adhered to by-laws as per most Letting Agreements. After all, the Accommodation Module is for “predominately rental accommodation” and personal experience generally indicates that the most disruptive behaviour frequently comes from holiday makers and their multiple “invited guests.”
It is very different to speak from a legal office than it is to be at “the coal face”. Too much of the legislation is written by the legal fraternity who are “politically correct” but not “industry savvy”.
Committee members, by legislation, now have no requirement to EVER be onsite. On a practical level, how can a committee member on the other side of the world, attending all meetings remotely by video link be “acting with due diligence”. The entire committee can now be remote from the building, attend meeting by video link and there is NOTHING on the election forms to indicate that this is the situation. The political and legal fraternities may say “this does not happen” but many of us know on a practical level it can, and it does.
Often the most astute and knowledgeable owners are denigrated by a controlling caretaker and his/her buddies so getting elected is not the situation as the legal fraternity represent it. I can produce multiple witnesses who have been told, “Just come on the committee. I will look after you. You don’t have to do anything but turn up to a few meetings or (currently flick on your computer 4 times a year). I can get you elected by the rental pool”. This is common in many buildings.
Yes! Education is certainly needed!
Very well said Sandra I just hope the right people are taking notice.
Too many committee members have been educated by Caretaking/Letting agents in the past to ensure the committee vote goes a certain way.