Office bearers insurance

I agree with Peter, that seems odd and merits further inquiry.

Some insurance policies have exclusions on EC insurance, such as for defamation, because internal politics can become quite nasty and very few people understand the limitations of free speech and fair comment, under the law.

Other insurance policies will reduce premiums by having an excess so that the first few hundred of any claim is covered by the owners corp.

Admittedly the new laws in NSW excuse liability of individual EC members who have acted in good faith.

But if you have, say, a secretary who allows changes to common property on a nod and a wink, and the EC is aware that proper procedure is not being followed, you could be up for tens of thousands of dollars in damages if things go wrong.

Similarly, if the EC has been told by a qualified person that there is a problem, but they decide to do nothing about it and hope nothing happens, then they are not acting in good faith and could be liable if disaster happens.

It’s a minefield – your EC really needs to look at your insurance policy and ask themselves if it’s worth potentially losing thousands of dollars just to save a few bucks. Personally, I wouldn’t serve on an EC that didn’t have proper insurance.

@Susanp said:
The first thing the SM said to the owners at the AGM that I attended, was that we could be on the EC but that we would do absolutely nothing? The other owners appeared to be accepting of this. 

Is your Strata Manager a statutory appointment (probably due to mismanagement of the scheme by a previous EC)? It certainly sounds like it.

If that’s the case, then they do have absolute power and all you and your fellow owners can do is act responsibly, have your committee meeting in a purely advisory capacity and hope that you can take back control of your building when the statutory appointment runs out and you have proved yourselves to be good strata citizens.

Don’t resign – that’s how these people get to stay in control. If this strata manager is not a statutory appointment, then he is a dinosaur who really shouldn’t be operating in this day and age. 

Send a letter to the strata manager asking on what grounds the EC can’t make any decisions.

If he is a statutory appointment, that’s one thing but if he is saying, for instance, that the Owners Corp has delegated all function to him, as many do, the EC can at any time supersede the Strata Manager.  

If he is not a statutory appointment, then he has seriously misled owners and that is a sackable offence.

That’s the law. He has to do what you tell him, not the other way round.

Ask the strata manager if he is a member of SCA and if not, why not.

Ask him on what grounds you are not being given access to the strata roll as this is a clear contravention of section 108 of the strata Act (below).

Ask the manager if he has heard of the principle of “prevention is better than cure” in regard to your tree issue.

Ask the strata manager for a copy of the management agreement under which he was appointed.  

You may be in a block where the EC’s only concern is to keep levies low. However, you collectively have a legal obligation to maintain and repair common property that your strata manager shouldn’t be helping your owners to shirk.

He probably does this becasue it keeps him onside with the owners.  However, we are right in the middle of a major review of strata law and there is no place for old school thinking, especially when your EC isn’t covered by insurance.

Division 4 Inspection of records and issue of certificates

108   Inspection of records of owners corporation

(1) Who may inspect records?
An owner, mortgagee or covenant chargee of a lot, or a person authorised by the owner, mortgagee or covenant chargee, may request the owners corporation to allow an inspection to be carried out under this section.

(2) Form of request
The request must be in writing and be accompanied by the fee prescribed by the regulations.

(3) Items to be made available for inspection
The owners corporation must make the following items available for inspection by the person who makes the request or the person’s agent:

(a)  the strata roll,

(b)  any records or documents required to be kept under Division 2,

(c)  the plans, specifications, certificates, diagrams and other documents required to be delivered to the owners corporation at its first annual general meeting by the original owner or lessor,

(d)  if in its custody or under its control, the certificate of title comprising the common property or, in the case of a leasehold strata scheme, the certificate of title for the lease of the common property,

(e)  the last financial statements prepared,

(f)  every current policy of insurance taken out by the owners corporation and the receipt for the premium last paid for each such policy,

(g)  any other record or document in the custody or under the control of the owners corporation,

(h)  if the duties of the owners corporation under this subsection have been delegated to a strata managing agent, such other records (including records of the strata managing agent) relating to the strata scheme as may be prescribed by the regulations,

(i)  if a caretaker agreement is in force or has been entered into but has not yet commenced, a copy of the caretaker agreement.

 

Maximum penalty: 2 penalty units.

 

(4) Inspection to take place at agreed place and time
The inspection is to take place at such time and place as may be agreed on and, failing agreement, at the parcel at a time and on a date fixed by the owners corporation under subsection (5).

(5) Time and place of inspection if agreement not reached
If an applicant and the owners corporation fail to reach an agreement within 3 days after the owners corporation receives the application, the owners corporation must immediately send by post to the applicant a notice fixing a specified time (between 9 am and 8 pm) on a specified date (not later than 10 days after the owners corporation receives the application).

(6) Copies of documents may be taken
A person entitled to inspect a document under this section may take extracts from, or make a copy of, the document but must not, without the consent of the owners corporation, remove the document from the custody of the owners corporation.

A statutory appointment is where the strata manager has been appointed by an adjudicator in response to an application under the Act.  You see that where a strata scheme has been badly mismanaged and the manager is appointed to make all the decisions for the scheme.  The effect is that the owners have no part in the decisions made for that scheme.

Now if the strata manager has been the manager for 20 years I would venture  there isn’t a snowball’s chance in hell that he has been appointed by an adjudicator.  Those types of appointments simply can’t last that long.

It may be that the terms of the manager’s appointment delegate all the functions of the owners to him, but that is very unwise.  As Jimmy suggests I think you should start by asking for a copy of that agreement.

Also – in relation to your question about the general meeting, the fact that only the members of the EC were in attendance doesn’t matter, it was a general meeting, not an EC meeting so they were there in their capacity as owners at a  general meeting.  The decision was a decision of the owners, not the EC.  Note that if you were all voting at the GM on the carpet matter that indicates that the strata manager is not a statutory appointment, because otherwise he would be making that decision.

It sounds to me like you need to get rid of this person as soon as possible.