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I am secretary/treasurer of the strata committee in a small block of 8 units with 5 resident owners. The other committee member, the chair, and I bought into the block last year, purchasing from the previous committee members who had left the finances in a terrible state. We were aware of that but the block so suits our needs and preferences we bought anyway. We have set about trying to get things back to a sustainable position.
We are looking to self-management as part of that solution. Our AGM is next month just before our contract with a PICA group strata manager expires. We have notified the strata managers of our intention to include a motion to move to self-management and provided the details for that. It was our hoped that we could transfer a month after the meeting, delaying that long because a levy becomes due in the meantime and the levy notices will be sent out before the meeting. We would be ready to go on the contract expiry date.
The strata managers have come back to us to say that, what with the Christmas break coming up, they could not possibly be ready until 3 months after the meeting.
Is this reasonable?
I have prepared a treasurer’s report for the financial year which reviews expenditure over almost 3 years and uses that to estimate the budget and levies which need a serious increase to start to make good the terrible state we have started from. It sets out the reasoning in some detail. I had hoped to have that report acknowledged by the owners in a motion at the meeting but, while they will include the report in the meeting papers, they do not want to have such a motion. The report includes the administrative fund budget, with the capital works fund budget coming from the 10-year capital works plan we developed ourselves to replace the last plan from 2018. The new plan is being put forward for adoption by the owners in a separate motion. But the budget they want to include is the one their systems will generate which almost certainly will be woefully inadequate. I think they will accept the proposed levies based on the the treasurer’s report budget but they will be inconsistent with the budget they will put forward.
I had also suggested that there be two contingent motions regarding the extension of contract, one in the case of self-management being adopted and one for full retention of them as strata managers, both clearly specifying the term of the extension, one of which would lapse depending on the outcome of the self-management motion. They have come back and said they only want a single motion reappointing them for their standard term of 3 years, which we can amend to the 3 months they need to prepare for transfer.
Are they not obliged to accept the strata committee’s requests for the conduct of meetings?
What options do we have other than just rolling over and acceding to their intransigence?
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What exactly were they hoping to do that would take them three months? The Pica group prides itself on having the latest whizz-bang technology for keeping its records up to date and accessible at the press of a button. It’s not intransigence – just a lack of motivation to look after a customer they have already lost.
What’s the worst that could happen if you stick by your dates? The sky will not fall in. Remember, they work for you and not the other way round.
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.
This is a clear case of the strata manager pulling the wool over the owners’ eyes and calling the shots.
CONTRACT TERMINATION: Have a look at your contract to determine the exact date it terminates and whether there are conditions imposed on earlier termination.
SECRETARY: As secretary, you can call your own meeting of the owners at any time. You don’t even have to let the strata manager know. Refer to Strata Schemes Management Act 2015 . Schedule 1 Meeting procedures of owners corporation. NSW Legislation web site.
AGENDA ITEMS: If you read the meeting procedures part of the Strata Schemes Management Act 2015, you would find all the rules for adding items to the agenda. My understanding is that owners can add items to the agenda. Strata manager cannot tell the Secretary how to draft their motions.
BUDGET: As owners, you can vote to reject any strata manager proposed agenda item. I’ve done that. I struck out items we did not need and reduced the levies accordingly. I did it during the meeting. Strata managers don’t like me because I am not their rubber stamp. What you should be doing is having a discussion about the budget, proposing your alternative and then voting. It would be preferable to let the other owners see your proposed budget beforehand. You can do that by either including it in the agenda papers or handing it to every owner personally.
Always remember that the Owners Corporation is ultimately responsible and in charge of everything. The strata manager answers to you. This point was made clear to us by an NCAT member. An owner applied for “compulsory appointment of strata manager” for a period of three months. The NCAT member mused over the idea of giving the appointment to our existing strata manager! His reasoning was that the owners corporation was ultimately responsible for the strata plan. If the plaintiff was seeking to usurp the owners corporation, then the member preferred to appoint the existing strata manager with the powers of the strata committee. In the end, the application was dismissed.
Forgive me for being cynical, but are they trying to hide something?
One of my favourite aphorisms: “Never ascribe to malice anything that can just as easily be explained by incompetence.”
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.
Excellent. Seven days is much better than three months!
ALTERNATIVE METHOD FOR PAYMENT OF LEVIES: When we became self managed, we passed a motion to open a bank account with Commonwealth Bank. We also had a motion to indicate who was the secretary, chairman and treasurer. Commonwealth Bank has a process in place to open bank accounts for self managed strata. Our Comm Bank staffer was reading from a list of instructions on his computer. Other banks did not know where to start.
We had to show the bank the minutes of the meeting where the motions were passed. They asked us to get every owner in attendance to sign the minutes. The bank asked to see our memorandum of articles. I said we did not have any. They asked about “rules”. I showed them our registered by-laws. The bank account was named after the strata plan.
We were lucky to have a bank manager, who was serving on the strata committee of a self managed strata. He told us we would save a lot of money by going self managed.
We were lucky to have a bank manager, who was serving on the strata committee of a self managed strata. He told us we would save a lot of money by going self managed.
This is a very broad statement when you balance the investment of personal time to manage the property (because not having an SM doesn’t mean you get to stop doing all that is needed) vs the fact that not all companies are out there trying to make a tonne off your scheme.
The company I work for has fees that run between $1 to $2 per day per lot and we’re very upfront with notifying when requests could result in a schedule b charge and give the committee an opportunity to side step it or accept it.
When everyone gets along, it’s great. The first person that doesn’t like how things are going or the first by-law that starts getting broken it will be then you have to wonder if $1-$2 per day per lot is worth the headache.
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