Would you pay trained committee members?

There’s been a lot of chat in the strata-sphere recently about whether untrained volunteers should be expected, as they are, to manage the finances of multi-unit apartment complexes with million-dollar-plus annual budgets.

However, calls for committee members and especially office-bearers to be trained so they can better manage this load has led to observations that it’s hard enough to get good people to volunteer their time without expecting them to take evening classes or online courses.

That has led to suggestions that maybe they should be paid to compensate them for their efforts, which in turn has met the response that people would stand for elections for the wrong reason – to make money rather than make a contribution.

I don’t know what kind of money compensates for being shouted at or pestered via email by people who haven’t read the by-laws or meeting minutes but still insist they have superior knowledge and limitless “rights”. 

On the other hand, should you be comfortable with the value of your home being subject to decisions made by people who have power and influence merely by dint of having put their hands up at an AGM when no one else would?

And, if not, how much would you be prepared to pay them to be trained for the work they do?

Strata law in most states allows committee members to be compensated retrospectively for the work they have done in the previous year.

However, few take advantage of this, probably because the meeting that would decide whether or not to pay them is the same one where they have to stand for re-election.

At the other end of the scale, some committee chairs (often lawyers) charge their strata schemes a consultancy fee for advice given, purportedly aside from their work on the committee.

And while the pre-agreed payment and the committee work must remain separate under strata law, we have heard of one case where the chair threatened to resign if their cosy and highly lucrative deal was terminated.

By the way, the resident owners who proposed this saw it as a win-win, but the rusted-on committee members quailed at the thought of change.

That said, given that strata owners will join committees to make sure that things they want are approved, or things they don’t want refused, or just to keep levies as low as possible, petty self-interest is a more likely motivation for owners to join a committee than petty cash. 

For most large schemes, legal and financial advisory duties fall to the strata managers who, with any luck, have the knowledge, skills, professional backup and experience to do the job diligently.

But what if they don’t? What if your block is in the grey area between a manageable, 30-unit block and a substantial 100-apartment building. It’s generally accepted that most disputes in strata arise because one or both parties don’t understand their rights or responsibilities.

In Victoria, the appointment of a strata manager is compulsory for buildings of over 100 lots although, by all accounts, the quality of managers there can be hugely variable.

No such compulsion exists in NSW but larger schemes are highly likely to have a strata manager who, with any luck, is a member of the Strata Community Association and benefits from its continuing professional development schemes.

But problems can arise if the strata manager isn’t as au fait as they should be and there’s no one on the committee who feels confident in challenging what might be erroneous advice.

One example to come up on the Flat Chat forum recently had a strata manager insisting that there had to be a general meeting of the entire owners corporation to approve the installation of timber flooring – not true.

And then in another erroneous ruling, said they couldn’t issue a Notice To Comply, and neither could the committee, again without the approval of a general meeting.

Fortunately a savvy owner on the committee was sure neither of these things were true and checked with us.  But what if they’d had no inkling that the advice was wrong?

So, would you pay a little more in your levies to have trained office-bearers on your committee? If so, what level of competence would they need to demonstrate before they received payment?

Alternatively, would you rather pay more money to your strata manager and have them statutorily empowered to do all the heavy lifting of protecting your home or investment?

Or would you prefer to leave things as they are, cross your fingers and hope for the best.

A version of this column first appeared in the Australian Financial Review.