Executive Authority to make decisions

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  • 30/06/2011 at 4:25 pm #7478
    Gilgal1
    Flatchatter

      Hi – I'd like to clarify something about the power of an Executive Committee to make decisions to accept quotes for essential maintenance.

      Is there a limit to the amount of spending we can authorise?

      A quick look at the NSW Fair Trading website tells me that we may be limited to decisions up to $12,500. Is this correct? We'd like to approve a quote that is just under $15,000 – for work our previous strata manager failed to organise about 3 years ago.

      Also, can we make decisions by voting in writing – but by email. I was under the impression we may do this, but have just been told today that we can't. If not, then why not?

      Any advice you can give me would be greatly appreciated.

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    • 30/06/2011 at 5:25 pm #13105
      Jimmy-T
      Keymaster

        There's a principle around strata executive committee meetings that any owner can attend and electronic meetings wouldn't allow that to happen. Also, there are regulations about agendas and minutes.

        However, in practice, a lot of ECs will have mini eMeetings to allow them to get on with the day-to-day stuff and save the big stuff for formal, open meetings. 

        As a rule of thumb, if an issue needs to be discussed, if someone is possibly going to object, especially take a strong contrary point of view, or challenge the decisions after the matter, then have a meeting.  But if the issue has already been discussed and agreed and you just quickly want to, say, send out a letter following up a decision made at a previous meeting, then just do it electronically.

        This approach may not be strictly legal – but it works for a lot of committees.

        The question of spending is quite complicated and depends , among other things, on the size of your building (Blocks of over 100 units have slightly different rules.)

        Apart from bona fide emergency work, basically all proposed spending should have been budgeted for at an AGM or an EGM.  If you are planning to spend more than 10 percent on top of what was budgeted for a specific item, you need to have another general meeting.  If it's payment for legal advice above a fairly low threshold, it has to be agreed at a general meeting. 

        The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
        30/06/2011 at 5:39 pm #13106
        Gilgal1
        Flatchatter
        Chat-starter

          Thanks Jimmy.

          Our EC does try to be consultative and to ensure that unit owners are kept informed about what's happening. 

          I take your points about the right way to deal with controversial issues and bona fide emergencies. We would hold a general meeting if and when it's necessary.

          We try to hold regular EC meetings, but do use emails for some decisions – especially if they're needed promptly. We also send minutes to all unit owners which include a list of all decisions made since the previous EC meeting.

          As for whether electronic meetings are strictly legal, it seems to me that if they're not then it might be time for the Act to catch up with modern life. However I do understand that this is one very small part of what has to be fixed with NSW strata legislation.

          Regarding our current problem, I've asked our strata manager to review the quote to confirm that everything it covers is actually owners' corporation responsibility – maybe that will bring the amount down to something an EC in a 24-unit complex can decide. Otherwise it's off to an EGM!

          30/06/2011 at 6:18 pm #13107
          Jimmy-T
          Keymaster

            One thing looking into is the original decision that you say your previous Strata Manager didn’t follow through.  If you’re in luck, It may have an approval to spend an appropriate amount attached.

            The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
            01/07/2011 at 7:52 am #13115
            Gilgal1
            Flatchatter
            Chat-starter

              Ha ha! Sadly, though your last comment is a good suggestion, there's no such luck. Failure to adequately record the decision to fix the problem unit in question – ie no decision recorded in AGM minutes, despite former EC members remembering authorising repairs – is one of the key reasons we sacked the old strata managers.

              There was so much neglect of essential maintenance, and planning for an ageing complex, that we're now probably going to have to impose a special levy at our next AGM. This will not be popular, since most owners (including me) are not flush with funds… so it could cause some hardship. But that's a topic for another discussion later.

              Thanks for your help and advice 🙂

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